Late Friday night, a district court in Texas declared the entire Affordable Care Act unconstitutional — lock, stock and barrel. That includes not only the individual mandate and the protections for people with pre-existing conditions, but also the entire Medicaid expansion as well as a host of other ACA rules without any connection at all to health insurance.
The logic of the ruling is as difficult to follow as it is to defend, and it sets the stage for yet another round of high-stakes constitutional litigation over the future of health care in the United States.
To understand the court’s decision, you have to see the mandate as consisting of two discrete parts. There’s an instruction to buy insurance, and there’s a penalty associated with failing to do so.
As part of their 2017 tax reform package, congressional Republicans amended the ACA to eliminate the tax penalty. Because they couldn’t summon a filibuster-proof majority necessary to make substantive amendments, they zeroed the penalty out without also eliminating the naked instruction to buy insurance. And they trumpeted to anyone who would listen that they repealed the individual mandate — which, for all practical purposes, is precisely what they did.
But that’s not how U.S. District Judge Reed O’Connor saw it. In his view, the penalty-free mandate still amounted to a coercive exercise of government power. That meant that two individuals who’d been conscripted by red states as plaintiffs had standing to sue.
To put it bluntly, that makes zero sense. The judge asserted — without any support — that the penalty-free mandate “requires (the plaintiffs) to purchase and maintain certain health-insurance coverage.” But that’s not right. An unenforceable instruction to purchase insurance is not coercive in the slightest.
But O’Connor didn’t pause over standing. Instead, he turned to the merits and held that the penalty-free mandate is unconstitutional. Why? Back in 2012, a conservative majority on the court ruled that Congress lacked the power to adopt the individual mandate — the obligation to purchase insurance or pay a tax penalty — under its authority to regulate interstate commerce. But a different majority, consisting of the liberal justices plus Chief Justice John G. Roberts Jr., held that the individual mandate could be sustained as an exercise of Congress’s taxing power.
Repeal of the mandate penalty, however, means the government is no longer using its taxing power. For O’Connor, then, the penalty-free mandate that remains on the books must be unconstitutional, even though it’s not enforceable. (The court doesn’t even address precedent from the U.S. Court of Appeals for the 5th Circuit that “an unused power to tax” doesn’t make an exercise of the taxing power unconstitutional.)
At this point, you should ask: Who cares if a zero-dollar mandate is constitutional or not? Why does it matter in the slightest? And what on earth does it have to do with the rest of ACA?
You might have thought that the right remedy would be to invalidate the penalty-free mandate. Doing so would align with Congress’ evident view that an ACA without an individual mandate was preferable to an ACA with it. That’s what I argued in an amicus brief with a bipartisan group of law professors.
Instead, the court held that the entire ACA was “inseverable” from the purportedly unconstitutional mandate. To reach that conclusion, the judge leaned heavily on Congress’ findings from 2010, where it said that the individual mandate was “essential” to the law.
But the mandate that the 2010 Congress said was essential had a penalty attached to it. The finding is irrelevant to a mandate that lacks any such penalty.
In any event, it doesn’t matter what Congress meant to do in 2010. It matters what Congress meant to do in 2017, when a different Congress made a different call about whether the mandate was essential. We know what Congress wanted to do in 2017: repeal the mandate and leave the rest of the act intact. Its judgment could not have been plainer. (I know. I was there! So were you. It wasn’t that long ago.)
That’s not how O’Connor sees it. In perhaps the most remarkable passage in a remarkable opinion, he wrote that the 2017 Congress “intended to preserve the Individual Mandate because the 2017 Congress, like the 2010 Congress, knew that provision is essential to the ACA.”
Your jaw should be on the floor. On no account did Congress in 2017 “intend to preserve” the individual mandate. It meant to get rid of the loathed mandate — and it did, by eliminating the penalty that gave it force and effect.
In his contempt for the ACA, O’Connor blinded himself to all this. Instead, he decided that what Congress “really” wanted was to invalidate the entire ACA.
What happens next? California has already said it will appeal, and the decision won’t take effect while that appeal is pending. The constitutionality of the most important piece of social legislation since the advent of Medicare and Medicaid won’t be resolved by a single judge in Fort Worth. Nor is the 5th Circuit or the Supreme Court likely to have much patience for this partisan lawsuit.
So nothing changes for the time being. And nothing should change. The legal arguments in previous rounds of litigation over the ACA may have been weak, but they were not frivolous.
This case is different; it’s an exercise of raw judicial activism. Don’t for a moment mistake it for the rule of law.
Nicholas Bagley is a professor of law at the University of Michigan Law School.