The ACA and the courts

Last week, the ACA was in court again. The state of Texas is the lead plaintiff arguing that since the mandate tax has been reduced to zero, it is no longer a tax and therefore the entire ACA is unconstitutional and needs to be struck down. Yeah, this is bananapants but it sounded convincing to at least two of the appeals court judges.

DaveNYC asked a good question:

Dunno if anyone has requested this, but do you mind positing what happens if the ACA gets shot down? The courts questioning did not seem promising, so that scenario seems like one worth pondering.

So what happens?

This is dependent on the ruling of course but I am assuming that this case will eventually end up at the Supreme Court as there will be four votes for cert no matter the outcome in my opinion.

  • If the Appeals Court rules that the district court is completely wrong on all counts, then nothing changes and the ACA individual market continues as usual.
  • If the Appeals Court rules that the district court is right that the mandate is now unconstitutional but wrong in its severability analysis, the Appeals Court sends the case back to the district court for a new severability analysis. Right now the analysis says the mandate can’t be cut-off from the rest of the law so the rest of the law has to go.
    • Alternative analysis could be that the individual market regulations has to go which would then be appealed and during the appeal, everything would be stayed as the case reworked its way through the Appeals Court and then SCOTUS OR
    •  that only the individual mandate needs to be severed and everything else is A-OK.  At that point, I don’t think anyone defending the ACA would appeal.
  • If the Appeals Court rules that the district court is 100% right, the case is going to the Supreme Court during which time the ACA continues to operate normally.

Assuming the Appeals Court rules 2-1 that the District Court is 100% right, the intervening defenders of the ACA, mostly Blue State attorney generals, would file an appeal to the Supreme Court basically saying that this ruling is throwing out a century of severability doctrine.  The earliest the case would be argued would be the end of 2019 with a decision sometime in the Spring or early Summer of 2020.  This would be a massive election issue.  In King v Burwell, the “Moops” case, five justices who are still on the court plus one recent retiree (Kennedy) basically told the lower courts to actually use traditional doctrines when reading the ACA instead of the fevered dreams of movement conservatives.   The same five justices who held in NFIB  v Sebelius that the ACA was constitutional with an optional Medicaid Expansion are still on the court and I assume would appreciate not being trolled.

It comes down to whether or not Roberts wants to kill the ACA.  I don’t think he does (or at least does not want his fingerprints on it) as he has had two opportunities to do so already and has not (despite taking a whack at the Medicaid expansion) especially at the height of an election season where the ACA will be a major element of the campaign.

There is a non-zero chance that the ACA would be struck down and rendered non-operational but I don’t think the risk of coverage loss would begin until 12/31/20.



27 replies
  1. 1
    C Stars says:

    I have been wondering about this. Thanks for explaining it all to us. Your prediction is reassuring on some levels, although with this administration whatever option causes maximum pain and suffering should be expected.

  2. 2

    Thanks, David. I’ve been hoping you would address this.

  3. 3
    Another Scott says:

    I agree with your analysis.

    Does the prospect of a government shutdown have any impact on the PPACA? I assume not, but there is the Sequester boogie-man out there. RCP (from May):

    The threat of sequestration looms over the nation, but alarm bells are not yet ringing in Washington. Unless Congress and the White House take action, across-the-board cuts will hit the military and the rest of the federal government in January 2020. Negotiations have begun on a two-year spending deal to avert more than $300 billion of spending reductions imposed by the Budget Control Act, but no progress has been made. The president himself recently scorned the idea of a budget deal, tweeting that a spending deal is “not happening!”

    I assume the PPACA is outside any sequestration stuff (since, IIRC, sequestration only covers ‘discretionary’ spending and the PPACA does not fit in that category), but if the government were to shut down or if the giant cuts were to take effect, would that have a direct impact on the program (other than federal workers not being able to do their jobs, I mean)[?]



  4. 4
    Yarrow says:

    Thank you for this post, David. Appreciate your take on the issue. It makes me sick even reading about it so I’ve mostly avoided it.

    Question: Since this lawsuit originated in Texas, will the residents of Texas be impacted differently than everyone else since arguably they’re the ones with “standing”?

  5. 5
    RepubAnon says:

    On a side note- the Appeals Court seemed to think that the Blue States didn’t have standing to defend the ACA. However, they did not question whether the Red States had standing to oppose the ACA. Seems oddly asymmetrical.

  6. 6

    @RepubAnon: From what I’ve heard from lawyers, the Plaintiff standing position is also bananapants as the individual plaintiffs are alleging merely psychic injuries

  7. 7

    @Yarrow: Who knows… one of the proposed remedies would be to strike down the ACA only in the plaintiff states

  8. 8
    C Stars says:

    @Another Scott: This drives me nuts. The racism is awful of course but it’s also an obvious diversionary strategy. Focusing on it for days on end just plays into his hands. Why aren’t Dems out there pounding hard on the fact that we’re an extra trillion dollars in debt and the ceiling has been reached sooner than expected because of the GOP tax cut? That the GOP is working hard to take away our health insurance? Why? (shakes fist at the sky)

  9. 9
    rikyrah says:

    Thank you, Mayhew for this post.

  10. 10
    Yarrow says:

    @David Anderson: Oh, fantastic. Healthcare refugees moving to blue states will be a thing for sure.

  11. 11
    randy khan says:

    @C Stars:

    The racism is not a diversionary strategy so much as just built in to how this Administration operates. It isn’t really coordinated with the other awfulness, like the insanity of the Administration supporting the plaintiffs in this case (whose position would be really, really bad if applied in any other context). It can act as an actual diversion in that it grabs our attention (as it should – it’s terrible), but I sincerely doubt that they are nearly that strategic since it’s at the core of what people in the Administration believe.

  12. 12
    Mike in NC says:

    Apparently Fat Bastard has called an emergency cabinet meeting so those corrupt assholes can give his super fragile ego a needed boost.

  13. 13
    Duane says:

    So we’ve went from no one takes this ruling serious to it won’t happen for a year. The destructive nature of fascism never stops. This administration is an enemy of the people.

  14. 14
    C Stars says:

    @randy khan: I think it can be both: an innate part of how the administration (and DT) operates, and a successful diversionary tactic for them. But it our side makes it successful by fixating on it, and expecting some kind of meaningful rejection or repentance from the GOP (which is never. going. to. happen.) These sentiments are evil and must be forcefully and concisely addressed and condemned, but days and days and days of media outrage, echoing endlessly around the social media chamber, having long pained discussions about the exact nature of his racism, and everyone getting their shocked two cents in the bank (or op ed in the paper, as it were)… That all happens at the expense of our candidates and lawmakers getting airtime just being rational and moral counterpoints, and talking about important campaign issues. Why do we do this? Haven’t we all seen how this chaos plays in his favor in the media, time and time again?

    I wish that the Dems (or Dem pundits) were disciplined and on-message enough to simply take it as a given that this administration, actually the entire GOP, is shot through with racist violence and move forward from there to present our own rational policy ideas and policy criticism….that are not tainted by racism. AOC said something in the press conference to the effect of “He’s doing this to distract you from the healthcare issue,” but that’s the only example I’ve seen. We need more of this.

  15. 15
    C Stars says:

    Or maybe I’m wrong. Maybe the racism is the only issue we should be talking about right now. I don’t know….just feeling ranty this morning.

  16. 16
    Doug R says:

    There’s plenty of times a tax can be zero. Income tax, for one. Sales taxes with exemptions for clothes for kids.

  17. 17
    daveNYC says:

    I assume that killing the ACA wouldn’t trigger any clauses in insurance contracts that would allow for termination or increased dues?

    What about the requirement that 80% (or whatever) of revenue needs to be spent on actual service?

  18. 18
    Flange says:

    Also, there was some talk last week that the original plaintiffs may not still be covered by Obamacare. And, if so, this would render the suit moot, or non-justiciable. How would this be ascertained, and how brought before the court?

  19. 19
    TenguPhule says:

    @Doug R:

    There’s plenty of times a tax can be zero. Income tax, for one. Sales taxes with exemptions for clothes for kids.

    You’re trying to argue logic with the crazy batshit banana pants people.

  20. 20

    @Flange: Standing can be challenged at any point.

  21. 21
    WhatsMyNym says:

    @Doug R:

    There’s plenty of times a tax can be zero. Income tax, for one. Sales taxes with exemptions for clothes for kids.

    Taxes for Non-Profits (exemptions). I’ve signed a few Income Tax forms for our condo HOA and they all had a big zero on them. You still have to file.

  22. 22
    Yutsano says:

    @WhatsMyNym: I take zero total tax returns in my office all the time. The point is to check if anyone crosses a line into taxable territory. Most don’t but the record still needs to be there in case an audit is called.

  23. 23
    jonas says:

    Oooh, tough choice for the hacks on the SCOTUS: deal a death blow to their bete noir, “socialized medicine,” or hand Dems a major [winning] issue to run on next year? Republican candidates, particularly in the Senate, have to be shitting their pants over this. They have nothing to replace the ACA should it go away, and they know it.

  24. 24
    jonas says:

    @Doug R: The argument was that this was specifically a tax on *not* doing something (i.e. buying health insurance), which the court said you couldn’t do. An easy fix would have been to simply levy an across-the-board tax, but provide an automatic credit that would effectively zero it out for anyone who showed they carried insurance. But we had a Republican-controlled Congress by then, so any attempt to fix or adjust the ACA was out the window.

  25. 25
    chopper says:

    @David Anderson:

    so i guess everybody is standing against any law they don’t like. “i hate it so much it keeps me up at night!”. what horseshit.

  26. 26
    janesays says:

    @Yarrow: I don’t think it will play out that way, for the same reason I don’t think it will be struck down at all. Roberts doesn’t want his fingerprints on killing ACA for two reasons: 1) he doesn’t want it to be the thing he is most remembered for; 2) he’s pragmatic enough to recognize the absolutely catastrophic impact it would have on Republicans in the 2020 elections. If there’s one thing that would all but guarantee that Trump loses next year, it would be the ACA being killed judicially because of his party’s actions.

    If SCOTUS were to rule that it would strike down the ACA only in the states that are party to the lawsuit, it wouldn’t just be deep red states losing the ACA. The states are: Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wisconsin. Most of those states would never go blue no matter what you did to them, and one of them is already pretty safely in the Democrats’ pocket. But I count three states that are definitely purple enough that something like losing the ACA would almost certainly tip them decidedly into the Democrats favor next November – Arizona, Florida, and Wisconsin. I think it’s highly doubtful that Trump picks up any additional states in 2020 that he lost in 2016, though he did come within 2 points in both New Hampshire and Minnesota (he lost Nevada, Colorado, and Virginia all by larger margins). Assuming his ceiling is the map he had in 2016, losing Arizona, Florida, and Wisconsin would have him losing the electoral vote by a margin 282-256. And that’s assuming he holds onto Michigan, Pennsylvania, North Carolina, and Ohio.

    Anyway, long story short, Roberts doesn’t want to be the man who single-handedly hands the election to Democrats, and he knows killing the ACA would do exactly that, so I think he stays with the four liberals as he did in the previous two ACA cases that came before him. I suppose if it’s a foregone conclusion that the election is already lost for the Republicans, he could be less incentivized to hold the line (the thinking being, “fuck it, we’ve already lost the election anyway, let’s burn it all down on the way out”), but I don’t think any polling margin in the Democrats favor is going to be enough to convince most Americans that Trump’s defeat is inevitable after what happened in 2016 (when we all thought Trump’s defeat was inevitable).

  27. 27
    Michael Cain says:

    Assuming the Appeals Court rules 2-1 that the District Court is 100% right, the intervening defenders of the ACA, mostly Blue State attorney generals, would file an appeal to the Supreme Court…

    The Appeals Court will just pass it on without an en banc hearing?

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