At the latest court hearing on the Affordable Care Act, a panel of three federal appeals court judges seemed poised – to the surprise of many legal experts – to uphold a lower-court ruling that the sprawling health care law is unconstitutional.
Last week, the U.S. Court of Appeals for the Fifth Circuit heard oral arguments in the case of Texas v. Azar, a suit brought by 18 state attorneys general (and endorsed by the White House) that argues the health care law was invalidated when Republicans rolled back the financial penalty for Americans who don’t buy insurance when they passed the $1.5 trillion tax overhaul last year. The Supreme Court initially upheld the ACA because of the individual mandate – which required Americans to purchase health insurance or pay a fine – under Congress’ taxing authority.
But the responses from two of the three judges, both Republicans, suggested they were skeptical of the plaintiffs' defense and inclined to side with a 2018 ruling by U.S. District Judge Reed O’Connor in Fort Worth, Texas that struck down not only the individual mandate as unconstitutional, but the entire law, throwing the future of the Obama administration’s biggest legislative achievement into uncertainty.
“Texas v. the United States is really the most ridiculous and inane constitutional case brought against the Affordable Care Act,” said Elizabeth Sepper, a law professor at the University of Texas. “But, it has most of all been successful.”
During the arguments, Judges Jennifer Walker Elrod, who was appointed by former President George W. Bush in 2007, and Kurt Engelhardt, who was appointed by President Trump in 2018, questioned Democrats’ argument that Republicans did not intend to invalidate the entirety of the law by reducing the individual mandate’s financial penalty to $0.
Engelhardt questioned why, if Congress intended to keep the health law intact, the Republican-controlled Senate hadn’t sent a lawyer to lay out that case. Repealing the ACA has been a longstanding goal of Trump and Republicans, but they failed to do so in 2017 when the Senate narrowly missed the necessary number of votes.
“Why would the Senate not also be here to say, ‘Oh, this is what we meant when we wrote this?’” he asked at the time. “They’re sort of the 800-pound gorilla that’s not in the room.”
However, that logic flouts the legal precedent of severability, according to Jill Horwitz, a law professor at the UCLA School of Law. Essentially, the long-standing legal practice is to look at what Congress intended to do when it invalidates, or excises, a part of an act. In this case, Congress zeroed out the financial penalty for the individual mandate portion of the act -- but it did not invalidate the entirety of the law by doing so, because no other part was attached to the individual mandate.
Yet in his ruling last year, O’Connor, a Republican, wrote that the individual mandate could not be severed from any other part of the ACA, whether it’s coverage for kids up to age 26, efforts to protect against elder abuse or requirements surrounding employer-based insurance.
Two of the judges seemed to entertain the notion last week that Congress’ intent was to eliminate the entirety of the ACA. (While that may have been the hope of some Republican members, the law explicitly eliminates only the federal tax penalty for violating the individual mandate. The requirement itself remained in effect). Legal experts across the political spectrum appeared to agree that the case was a stretch: Taking out the mandate has no bearing on the remainder of the law.
“Instead, at the circuit, you had judges, in particular [Judge] Elrod, suggesting that Congress hid an elephant in a mousehole,” Sepper said.
What happens next, however, ultimately depends on how the 5th Circuit rules. Although two judges seemed to align closer with O’Connor, the third judge, Carolyn Dineen King, who was appointed by former President Jimmy Carter, remained silent. It’s possible the court will agree with O’Connor that the individual mandate is unconstitutional, but force him to provide a better analysis of what specific parts of the law are inextricably entwined with the individual mandate -- and those that can stand alone.
“If they agree with O’Connor,” Sepper said, “it’s inevitable that the Affordable Care Act will be back at the Supreme Court in the coming year.”
The possibility of a Supreme Court hearing on the ACA could be years away, however -- “there are ways that courts can be very, very slow in making decisions” -- particularly with Trump and Republicans eager to avoid a ruling on the issue before the 2020 presidential election.
If the make-up of the Supreme Court remains the same before Texas v. Azar lands in front of it, the justices, most likely, would reverse O’Connor, or any ruling of the 5th Circuit agreeing with the Fort Worth judge because of the implications beyond the ACA.
“It’s a really dangerous precedent that suggests that a tiny change to a major statute, even a minor unconstitutional provision, could bring down an entire statutory reform that’s been on the books for many years now,” Sepper said. “And I don’t think that the Supreme Court would be willing to go that far.”
The ultimate outcome of the lawsuit will affect millions of Americans, and the repeal of the nine-year-old law could leave up to 32 million people without health insurance by 2026, according to a Congressional Budget Office report from 2017 about the effects of repealing the ACA.
“If the Fifth Circuit upholds the lower court’s decision, insured patients are going to have some nasty surprises,” Horwitz said.
That includes: families losing the ability to cover their children up to age 26 on their insurance plan and Medicare patients could see themselves with lifetime limits and annual limits on their health insurance. Privately insured patients could undergo the same problem. Women could face higher premiums based on gender.
“And on and on,” Horwitz said.