The Affordable Care Act faced its third life-or-death encounter at the U.S. Supreme Court on Tuesday, and skeptical questioning from the justices suggested it may survive this one too.
Since the court upheld the law still popularly known as Obamacare in 2012 and 2015, the panel has gained three new conservative justices appointed by President Donald Trump, giving heart to the law’s challengers. But justices' questions, including some from Justice Amy Coney Barrett, who joined the court just over a week ago, indicated the challengers' arguments face an uphill battle.
The outcome of the case could determine the fate of the country’s entire health-care system because the ACA’s provisions govern aspects of virtually all of it. But the case would most immediately affect the more than 20 million people who rely on the law for insurance coverage. Nearly 332,000 people in Pennsylvania and more than 246,000 in New Jersey are covered by policies purchased on the ACA’s exchanges, according to the Kaiser Family Foundation. An estimated 800,000 Pennsylvanians and more than 580,000 in the Garden State are eligible for coverage through Medicaid because of how the ACA expanded that program for lower-income Americans.
Other ACA provisions reach into almost every corner of the health-care system, guaranteeing coverage for preexisting conditions and for young adults under their parents' insurance, reforming Medicare payments to hospitals, requiring calorie labeling in restaurants, and permitting the sale of generic copies of biotechnology drugs.
The case was brought by 20 state attorneys general and governors, all Republicans and led by Texas, and two individuals who argued that the ACA’s mandate to maintain health insurance was rendered unconstitutional when Congress eliminated the penalty for noncompliance in the 2017 tax law. They claim that without the penalty, the mandate is no longer a tax, which was the basis for the court’s 2012 ruling upholding its constitutionality. Since the mandate was central to the law when it was passed in 2010, if it is repealed, everything else must go.
The Trump administration broke with custom by siding with the challengers and refusing to defend the law. In its place, 21 Democratic attorneys general led by California, and the House of Representatives, under its Democratic leadership, presented the law’s defense. New Jersey has joined in the case, while Pennsylvania has expressed support.
A federal judge in Texas sided with the challengers, declaring the entire law invalid, but he delayed the ruling’s effect to allow time for appeal. A divided appeals court agreed that the mandate is unconstitutional but left open the question of how much else in the law should go with it. The law’s supporters then asked the Supreme Court to step in.
The justices reserved their more challenging questions for the attorneys for the plaintiffs opposing the act, Texas Solicitor General Kyle Hawkins and acting U.S. Solicitor General Jeffrey Wall. Chief Justice John G. Roberts Jr. asked Hawkins why, if Congress wanted to invalidate the entire law, it did not even try to repeal all of it when it considered replacement proposals before eliminating the penalty in the summer of 2017. He added that invalidating the law on behalf of Congress “isn’t the court’s job.”
Justice Brett Kavanaugh noted that Congress is usually clear if it does not want a law to be severable, meaning that removing one part would invalidate the whole law. But the ACA is not clear on that point. Justice Barrett observed that it would be strange for Congress to amend a law in a way that would cause all of it to be struck down over a single clause.
The challengers contend that the mandate cannot be severed because it was central to Congress' plan when it passed the ACA in 2010. Without it, the law’s drafters thought, healthy people might stay out of the insurance market, forcing insurers to cover only the sickest. Former U.S. Solicitor General Donald Verrilli, representing the House of Representatives, argued that the need for it has passed. “I don’t think there’s any doubt that the 2010 Congress thought that stick was important. But it’s turned out that the carrots work without the stick.”
Several justices questioned whether the challengers have suffered enough of an injury from the now toothless mandate to have standing to bring their claim. Justice Elena Kagan worried about an “exploding standing doctrine” in which plaintiffs could claim injury from one provision in a large statute and then assert that the law cannot be severed, so that all of it must be struck down. “This theory would be new to me and would be new to many people,” she noted.
Justice Clarence Thomas asked what the threat to the challengers was if the mandate now has no enforcement mechanism. Hawkins countered that some people would still honor it, even without a penalty, and that the mandate injures states by imposing reporting requirements.
The three liberal justices were universally skeptical of the challengers' arguments. Many of their questions focused on whether the mandate had been reduced from an actual command to a mere suggestion when it was stripped of its penalty. Justice Stephen G. Breyer pointed to numerous statutes that encourage actions like buying war bonds and planting trees without penalizing noncompliance. “Are all of these statutes subject to challenge?” he asked.
Justice Kagan asked Hawkins how a mandate could become unconstitutional because Congress had made it less, rather than more, coercive. Justice Sonia Sotomayor wondered whether the mandate would become unconstitutional if Congress simply suspended enforcement of the tax for a few years.
The attorneys defending the law, Verrilli and California Solicitor General Michael Mongan, seemed to have an easier time. While the conservative justices asked more challenging questions of them than their liberal colleagues, the conservatives reserved their more probing questions for the plaintiffs.
The tone of questioning from both liberal and conservative justices suggested that all or most of the ACA is likely to survive, either because the justices find that the challengers lack standing or that the mandate is severable from the rest of the law. A ruling is anticipated sometime next spring.
Yale Law School professor Abbe Gluck predicted in an interview Tuesday that the court would find the mandate to be severable and that “the rest of the ACA is likely to survive, regardless of what happens to the mandate.”
Timothy Jost, emeritus professor of law at Washington and Lee University, observed after the hearing that “given the tenor of the questions, there is a good chance the court will throw the case out because the plaintiffs don’t have standing.” Even if the justices do not, “there will be a hard time finding five justices to throw out the entire law,” he said.
Loss of the mandate on its own has had few practical consequences for the ACA or its insurance exchanges, since the penalty was repealed in 2017. Mark Pauly, professor of health economics at Wharton and one of the architects of the mandate concept, noted Tuesday that removing it “did not cause the individual market to collapse.” He added that it “was relatively paltry in terms of its ability to punish people for not having insurance” anyway.