GDP Blog

Déjà Vu All Over Again: The Recent Ruling On the Constitutionality of the ACA & What Comes Next

Posted by Seth Denson

Dec 18, 2018 1:20:13 PM

The past Friday, on the eve of the last day of the 2019 Open Enrollment season for the ACA’s Federal Marketplace, Americans have found themselves, yet again, at another legal crossroads concerning health care in the United States. According to a ruling issued by U.S. District Judge Reed O’Connor, due to the elimination of the penalty surrounding the Individual Mandate as a result of the Tax Cuts and Jobs Act of 2017, the Affordable Care Act is unconstitutional. While the fall out of this decision has yet to be determined and for the time being, both Health and Human Services along with the White House have stated no immediate changes will occur as a result of this ruling, appeals have already begun and as such, the ACA will once again end up in the Supreme Court.

HOW DID WE GET HERE
Completely repealing the Affordable Care Act was always going to be an uphill battle for Republicans as without a filibuster proof majority (technically 60 votes), even after winning the White House in 2016, the only way to dismantle what has become known as Obamacare, would be through a process known as Budgetary Reconciliation. In short, RECONCILIATION is a process that allows passage of certain legislation specific to budgetary issues on spending, revenues, and the federal debt limit. Under Reconciliation, new legislation can pass with a simple majority vote in both the House (218 votes) and Senate (51 votes). As a result in of party infighting and the inability to agree on ‘repeal and replace’, rather than another failed attempt to dismantle the ACA, in September 2017 the GOP dropped their ongoing efforts and instead turned to tax reform.

On December 20, 2017 both the House of Representatives and the U.S. Senate passed the Tax Cuts and Jobs Act. As a key component of the new tax bill, legislators were able to change penalty surrounding the Individual Mandate, reducing it to $0.00.

CONSTITUTIONALITY
Twice, arguments concerning the constitutionality of the Affordable Care Act have found themselves in the chambers of the Supreme Court. Twice the law has been upheld. However, with regards to the individual mandate, in 2012 Chief Justice John Roberts (the deciding swing vote) upheld its constitutionality by stating that the penalty imposed by the ACA for NOT purchasing qualified health insurance was a tax. Since, according to Section 8 of the Commerce Clause, Congress has the right to impose and collects taxes, Chief Justice Roberts and in essence the Supreme Court upheld the ACA’s constitutionality.

That’s where this most recent ruling out of Texas comes in to play. Following last year’s Tax Cuts and Jobs Act which reduced the penalty to $0.00, Texas, along with 19 other states filed suit. These states argued that since the individual mandate no longer applied, the original ruling by the Supreme Court no longer applied as well since the so-called ‘tax’ was repealed. Furthermore, they argued that because the penalty was eliminated, the only option for citizens to comply with the mandate was to purchase health insurance (in lieu of paying the tax) and since Health Insurance premium vary from state to state, this singular option to comply violated the Interstate Commerce Clause. U.S. District Court Judge O’Connor for the Northern District of Texas Fort Worth Division agreed and ruled in favor of the plaintiffs.

SEVERABILITY
A common provision included by Congress when drafting a law is severability. This language which is typically included in legislation allows a law to continue to stand even if one part of the law is deemed invalid or unconstitutional. In their haste to pass the ACA, Democrat law makers failed to include this language in the health care law. Since then opponents of the Affordable Care Act have tried to argue that if one part of the ACA is deemed unconstitutional, then the entire law must be thrown out. That argument was made in this most recent case out of Texas as well.

POLITICAL RAMIFICATIONS
The Texas v. United States ruling is not an injunction and does not block current operation of the ACA, so the existing law currently remains in effect along with all of its provisions. Appeals have already begun and no doubt this will end up back in front of the Supreme Court. Should the recent ruling out of Texas be upheld, the entire ACA and its hundreds of provisions affecting all areas of the health care system would be struck down.

While those that oppose the ACA may be okay with this possibility, the political ramifications could be significant. Roughly 17 million Americans relay on the ACA for access to coverage and even more have benefited from various provisions such as protections for people with preexisting conditions, 100% coverage for certain preventive services, and the ability for dependents to remain on their parents’ plan until age 26. In short, if this recent ruling is upheld, it could also mean Americans who buy plans on the public Marketplace would be at risk of losing their health coverage, as well as those who receive coverage as a result of Medicaid expansion that has been adopted in the majority of states.

Republicans have long stated that repeal without replacement is NOT an option, but now that we once again have split powers in Congress with the Democrats regaining control of the House of Representatives and Republicans maintaining control of the Senate, it’s not likely we see collaboration between legislators. If a replacement could not be legislated, Republicans in their opposition to the ACA could be held responsible if the law goes away without an alternative.

WHAT’S NEXT
As stated earlier, appeals have already begun. As for now, the ACA remains along with all of its requirements and protections. The individual mandate is STILL in place, but the “tax” for failing to have health insurance coverage has, for now, been reduced to $0.00. While the makeup of the Supreme Court is different than it was the last time cases involving the constitutionality of the ACA were heard, the likely deciding ‘swing vote’ will once again be Chief Justice John Roberts. As such, predicting the overall outcome of this recent ruling would be naïve, but no doubt a long legal battle likely lies ahead.

In the meantime, it is important to note once again that the law still does require everyone to have qualified health insurance – for now, there’s not no penalty for non-compliance. Requirements of insurers not to apply pre-existing conditions, guarantee coverage and allow dependents to remain on the plan to age 26 are still in place. In addition, Employers with more than 50 Full Time Equivalent employees still must provide qualified and affordable coverage to employees. In essence, for the time being, nothing has changed – it’s business as usual in America when it comes to healthcare and if the past is an indicator of the future, when it comes to a possible ruling on the ACA’s constitutionality by the Supreme Court, we may be in store for what the late great Yogi Berra would say, “déjà vu all over again.”

Topics: ACA, Supreme Court, SCOTUS, Obamacare

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