The Mandate-less ACA: Unconstitutional?

Feb 21, 2019 at 02:21 pm by steve

The foundations of our national healthcare law do not strike observers as particularly stable. The laws and regulations scaffolding the delivery of healthcare are constantly evolving at best, and a shifting morass at worst. Part of this is a function of healthcare itself: the provision of healthcare is an always-developing profession, with new technologies, procedures, drugs, and knowledge ever arriving on the scene.

Yet the ideological divide among policy-makers and the public regarding the appropriate way to orient the healthcare systems' fundamental goals continues to add uncertainty to the landscape. Over the past decade, this divide has been most clearly seen in the passage of, and subsequent challenges to, the Affordable Care Act (ACA).

Since its passage in 2010, contests over the ACA have taken place within legislative venues, at the Supreme Court, in newsrooms, and across the spectrum of public opinion. Given the results of the 2018 midterm elections, these struggles are unlikely to gain legislative resolution over the next two years. While the Trump administration's criticism of the ACA is well established, little movement can be expected from a divided Congress. However, there may be potential for more significant developments on the judicial front, triggered by a recent federal court decision in Texas that ruled the ACA unconstitutional. This decision could ultimately put the law's fate back in the hands of the Supreme Court.

On December 14, Texas U.S. District Judge Reed O'Connor, ruled against the ACA and in favor of a coalition of states, who had brought a challenge to the ACA with the backing of the Trump administration. Judge O'Connor held that due to Congress's repeal of the individual mandate in the 2017 tax bill, the ACA should be struck down in its entirety. The individual mandate had been a key component of the ACA and a key point of criticism for the ACA's opponents. While the decision itself had little immediate effect--the ruling did not include an injunction, the health care exchanges remained open, and the ACA is still in effect as far as the U.S. Department of Health and Human Services is concerned--the case's fate on appeal may prove more momentous. The first destination of such an appeal is the Fifth Circuit. The ultimate destination, perhaps a year or two in the future, rests with the Supreme Court.

While there is no guarantee that the Supreme Court would take up this case and decide another challenge to the ACA (following its decisions on other facets of the law in National Federation of Independent Business v. Sebelius in 2012 and King v. Burwell in 2015), this is a definite possibility. Predicting the eventual treatment by the justices depends largely on considering two types of changes since the earlier ACA decisions: changes in personnel and changes in the law.

Any change in personnel at the Supreme Court is worth attention, and there are two new justices on the Court since the last Roberts opinion on the ACA was issued: Justice Gorsuch has replaced the late Justice Scalia and Justice Kavanaugh replaced Justice Kennedy. While the latter change represents an apparent ideological shift in the Court--the swing vote Kennedy has been replaced by a justice who is expected to be fairly reliably conservative--this new conservative majority is unlikely to be a deciding factor when it comes to the ACA's fate. This is because Justice Kennedy sided with the conservative justices in Sebelius. Justice Roberts wrote the majority opinion upholding the law. With regard to the ACA, Justice Roberts has shown every sign of deferring to congressional intent, and all else being equal a drastic change is unlikely.

All else is not, however, necessarily equal. The ACA that would be scrutinized by the justices in 2019 or 2020 is not the same ACA that was saved by Roberts in 2012. Further, as Judge O'Connor opined, the present case involves the intent of two very different Congresses: those of 2010 and of 2017. The changes in the law, then, appear to be more significant than changes in personnel. The pivotal change, as noted above, is the repeal of the individual mandate through the 2017 tax bill. This got rid of the feature of the ACA that was deemed a tax by Justice Robert in his 2012 opinion, thereby allowing the ACA to weather constitutional challenge. Insofar as the ACA was valid in 2012 due to the taxing power properly exercised by Congress in the form of the individual mandate, the excision of this mandate would appear to pave the way for a challenge almost custom-tailored to Justice Roberts's pen. A 2012 majority rejected, after all, the Obama administration's argument that Congress had authority under the Commerce Clause to enact the ACA as it then stood. Therefore there is now ambiguity as to what constitutional power is left to support the ACA in its current form.

This argument may oversimplify Justice Roberts's position in 2012 on the mandate-taxing power and undervalue his tendency to let the American people, through their representatives in the legislative branch, decide the fate of the ACA.

However, it gives opponents of the ACA enough material to believe the law could be struck down, and it gives supporters of the law some anxiety. Depending on this case's fate at the next level of appeal, this issue could become a point of contention leading up to the 2020 election, although each side's position on the ACA and health insurance in general are well enough entrenched by now that the possibility of another Supreme Court decision might not tip any scales. Both sides are currently waiting, but in the interim there are no significant changes to be managed for providers, patients, and the public in general.

Chris Thompson is an associate in the health law practice in the Waller Birmingham office.

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