All sides agree that Obamacare is safe – for now

All sides in the Texas courtroom battle over the constitutionality of the Affordable Care Act (“Obamacare”) now agree that the judge’s decision striking it down should not go into effect until all court appeals are decided, including any ruling by the Supreme Court. New filings on Friday afternoon in the Fort Worth federal court set the stage for the appeal process to begin – if, as expected, the judge agrees to allow it.

A group of 16 states and the government of Washington, D.C. that support the entire law will be pursuing the appeal of the decision a week ago by U.S. District Judge Reed C. O’Connor. Presumably, that appeal will start in the U.S. Court of Appeals for the Fifth Circuit, but the case is expected eventually to go to the Supreme Court.

If the judge accepts at least some of the suggestions made by participants in the case for what should happen next, there apparently will be no threat of undoing the massive federal health care law for months, at least well into 2019 and perhaps beyond. While the appeal process unfolds, all parts of the law and all federal and state rules implementing the law could remain in force, and that is what all sides now say they want the judge to arrange.

The Trump Administration, in one of the new court papers, urged Judge O’Connor to “reassure the public that the court did not intend for its December 14 order to cause substantial disruption to the health care markets by requiring [federal agencies] immediately to comply” with the decision.

The decision, that filing added, was in a form that was not a final decision, and settled only one of a handful of constitutional challenges mounted by the state of Texas and 18 other states that have long argued that the entire ACA was beyond Congress’s power and should be nullified completely.

To make sure that the ruling does not take effect, the federal government joined in the supporting states’ plea that Judge O’Connor authorize a prompt appeal and, in the meantime, put what remains of the lawsuit in his court on hold until after all appeals are decided,

The 19 challenging states, while taking a somewhat different position on some aspects of what should happen next, did join in urging that the appeal be authorized and that the remaining parts of the case be put on hold. Among issues not yet decided by Judge O’Connor is a plea by the challenging states that he impose a nationwide court order against enforcing any part of the law. The challenging states promised the judge that, if his ruling does not go into effect, they would not seek to have his decision against the law carried out so long as the appeal process continues.

If a postponement is granted by the judge, all issues not yet decided by him – including what ultimate remedy he might fashion to implement his decision -- will remain unresolved for the time being.

It is possible, though at the moment does not seem very likely, that Congress could step in and pass a new law or laws to salvage the ACA despite Judge O’Connor’s ruling. Democrats newly in the majority in the U.S. House of Representatives are vowing to attempt such new legislation, hoping that the gains they made in the November elections – when they made the future of health care a major issue – will help persuade Republican lawmakers to join in the salvaging effort.

If Congress could pass a law that fixed the flaws that Judge O’Connor found to exist in the ACA as it now stands, that would make it unnecessary for the court battle to continue. It has not been possible, however, to get an agreement in Congress on significant new healthcare legislation, so the prospect of a fix for ACA may be less than promising.

Judge O’Connor’s decision had two main parts: first, he ruled that the key provision in the law – the mandate that nearly all Americans must obtain health insurance or pay a financial penalty, was beyond Congress’s power, and, second, he declared the entire law unconstitutional after finding that none of it would have been passed by Congress without the individual insurance mandate.

Although the Supreme Court had ruled six years ago that the individual mandate was constitutional because the financial penalty was a kind of tax, the judge ruled that the Court’s decision on that point was undercut last year when Congress chose to set the tax penalty at zero, thus eliminating any compulsion to obtain insurance.

The 16 states and Washington, D.C., in defending the ACA’s constitutionality, argued that Congress had not repealed the individual mandate itself, so many Americans will continue to sign up for health insurance even if there is no penalty for not doing so. That will be one of the main points they will be making in their appeal of last week’s decision.

Judge O’Connor has called for the final brief in the case to be filed next week, on December 26, by the states and D.C. in support of the ACA, but Friday’s filings by the federal government and by the 19 states opposed to the law indicate wide agreement already exists on the two key points of avoiding prompt enforcement of the judge’s ruling for the time being and putting the case in the judge’s court on hold in the meantime.

After the judge’s decision was made public last week, health care insurers and health care providers expressed deep anxiety about what would happen next, even though the federal government, including the White House, argued that the decision would not take effect until any appeal was decided. The states and D.C. that support the law were not willing to rely on those statements, so they asked the judge to take the steps that the federal government and the challenging states now largely support. The 19 states will continue to vigorously challenge the law in the appeals process, with much though not total support from the Trump Administration.

The Administration shares the view that the individual mandate is invalid, but it does not support the challengers’ argument – and the judge’s decision – that all parts of the law were invalid.

Lyle Denniston has been writing about the Supreme Court since 1958.  His work has appeared here since mid-2011.