Constitution Daily

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Sweeping new Trump challenge to Obamacare

June 8, 2018 by Lyle Denniston

 

For the first time, the Trump Administration moved on Thursday to challenge the constitutionality of the key section of the Affordable Care Act (“Obamacare”) that required most Americans to buy health insurance or pay a financial penalty as part of their taxes.  The so-called individual insurance mandate is beyond Congress’s power, the new filing argued, now that Congress has eliminated the financial penalty.

Ironically, the existence of that financial penalty in the law was what had saved the individual insurance mandate from being struck down by the Supreme Court six years ago.  Without that form of tax, the new Administration document noted, the ACA mandate to buy insurance would be unconstitutional as beyond Congress’s power to regulate interstate commercial activity.   That was what five Justices of the Supreme Court said when a different combination of five Justices voted to uphold the mandate as a form of tax.

In a filing in a federal trial court in Fort Worth, Texas, government lawyers urged the judge not to act immediately to bar enforcement of the mandate, saying it won’t actually be unconstitutional until the tax penalty is set to expire on January 1 of next year.  In the meantime, it suggested, the judge should simply issue a declaration that the mandate cannot survive constitutionally if it no longer involves a tax that raises federal revenue.   The judge may be able to decide the constitutional challenge before the new year opens, the document suggested.

Besides urging nullification of the insurance-buying mandate itself, the new government position argued that two of the most popular features of the ACA must fall along with it: the requirement that insurance companies cannot deny health insurance to individuals because of existing or pre-existing medical conditions, and the requirement that they cannot charge higher insurance premiums based on existing or pre-existing conditions.   Those two were so closely tied to the insurance-buying mandate that they would not work in the health insurance market without the guaranteed pool of insured people that the mandate was designed to create, Administration lawyers contended.

The filing was made in reaction to a lawsuit filed by Texas, 18 other states and the governor of Maine, but the Administration stopped short of supporting all that those challengers are asking.  Their lawsuit has contended that the entire ACA program cannot function as an economic matter without the assurances of adequate numbers of people buying insurance.  So, they have called on the trial court to strike down every part of the ACA, a massive law of more than 900 pages that Congress passed in 2010.

Aside from the individual insurance mandate and the two insurance guarantees tied to it, the government filing argued, all of the rest of the ACA can continue to function.  That would include such popular items as the guarantee that young people can stay on their family’s health insurance plans until age 26, subsidies to help poorer people to afford health insurance, the existing state-level health insurance marketplaces (“exchanges”), the expansion of the Medicaid health insurance program for poor people, and a mandate that larger employers provided minimum levels of health insurance coverage for their workers.

The federal courts have no power to strike down those other provisions, since they can be severed from the parts of the ACA that will fall when the tax penalty ends at the opening of next year, the government argued.

The states’ challenge to the overall ACA has been pending since February in the Fort Worth court of U.S. District Judge Reed C. O’Connor.  He recently ruled that 16 other states and the District of Columbia could join in the case formally to defend the ACA against the challenge.  Until the Trump Administration (which is the target of the lawsuit) filed its views on Thursday, the case had been building without either side knowing what the government position would be.

In parting company with the challenging states on their demand that all of the ACA be nullified, the Administration document said it was hypothetical speculation whether the entire program would collapse without the individual mandate and the related insurance coverage requirements.  Although the challengers had suggested that “a chain reaction of failed policymaking” would occur once the mandate was invalidated, the government lawyers said that the challengers could not show that striking down the mandate and the closely-tied coverage clauses “means that the ACA necessarily ceases to implement any coherent federal policy.”

Congress last year struck down only the tax penalty enforcing the individual-insurance mandate, and left the rest of the law intact.   Many of those provision can continue to work to help achieve the overall goal of the ACA, to assure that more Americans have health insurance, the filing asserted.

The overall ACA and the state-run marketplaces where subsidized health insurance is sold have continued to operate in the six years since the Supreme Court had upheld the individual-insurance mandate, but have often had difficulty holding down insurance premiums and have had a steady erosion of the number of insurance companies willing to continue to sell policies on those exchanges, even with subsidies that help them offset the cost of keeping premiums down.

Legendary journalist Lyle Denniston has written for us as a contributor since June 2011 and has covered the Supreme Court since 1958. His work also appears on lyldenlawnews.com.

 

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