A federal judge ruled Obamacare unconstitutional on the last day before the end of open-enrollment in what Volokh Conspiracy calls a “clever redstate lawsuit” (but more on this post in a minute).
From The Hill:
A federal judge in Texas on Friday struck down the Affordable Care Act, throwing a new round of uncertainty into the fate of the law just one day before the deadline to sign up for coverage for next year.
The judge ruled that the law’s individual mandate is unconstitutional, and that because the mandate cannot be separated from the rest of the law, the rest of the law is also invalid.
The severability issue — meaning that if the mandate was found unconstitutional or unenforceable, the law itself was also unconstitutional because the mandate was an essential part of the law — is the core of the case. Essentially, if the mandate was unenforceable (and it was rolled back to $0 and rendered effectively repealed with the GOP-led tax reform legislation of 2017), the entire law gets tossed. Obamacare lacked a severability clause but such clauses are generally implied. From The Daily Caller back in 2010:
There is one way to nullify all of these provisions, however, since Obamacare lacks a severability clause. A severability clause states that if any part of the statute is found invalid, then the remainder continues in full force and effect. Severability provisions are so common as to be almost boilerplate. (If you look around your home at any sort of contract, you’re likely to find such a clause toward the end of the document.)
Even without a severability clause, a court applies a presumption of implied severability. Under severability doctrine, a court will surgically excise an unconstitutional provision from a law if possible. However, if the court finds the invalid provision to be an essential part of the legislation, then the court can strike down the entire statute. If the statute cannot work in the manner Congress intended without the provision, then a court can hold Congress would rather have no statute at all. The presumption the Congress intended severability is weakened in the absence of a severability clause, as is the case with Obamacare.
Thus, if a court finds the individual mandate unconstitutional, and that the mandate goes to the core of the legislative deal, then the entire 2,700-page law could be struck down with a single court decision.
That’s what’s clever about the lawsuit, which was apparently decided by a federal judge in Texas this evening.
The Trump administration has done a lot of heavy lifting to introduce many new free-market choices for those who were appalled by the ever-rising premiums and the exorbitant costs of Obamacare exchange plans — short-term health plans are now extremely cheap and can be carried for up to three years with renewal, and association health plans are actually being sold across state lines (a conservative’s dream) among other reforms — with an eye toward an end-run around Obamacare.
And there’s little doubt there will be new health care legislation drafted by Republicans now that Obamacare has been seriously wounded. But back to Volokh: this is far from over. In fact, his post from way back in June lays out the legal reasons why it’s likely to be challenged (and may even end up on SCOTUS’ door again):
Considering whether remaining parts of the law would be “fully operative” without the offending provisions only makes the Justice Department’s position even weaker. The individual mandate, as it stands now, is completely unenforced and unenforceable. As a consequence, the ACA’s insurance market reforms will largely operate the same whether or not it remains on the books. As Chief Justice Roberts explained in NFIB, the “only consequence” of failing to obtain qualifying health insurance is paying a tax – a tax which is now set at zero. “Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS,” Roberts wrote. Further, as the CBO noted in 2017, the practical consequence of eliminating the tax penalty is substantially the same as erasing the mandate altogether. In either case, individuals face no consequence from failing to comply with the mandate. So the ACA will operate the same way whether or not courts declare the minimum coverage opinion to be unconstitutional, and there is no basis for invalidating the insurance market reforms.
The Justice Department tries to get around this problem by pointing to the Congressional findings enacted as part of the ACA in 2010. This is a cute move, as it enables Justice Department attorneys to claim they are simply adopting the legal position of the prior administration, but it doesn’t work either.
Findings are just that – findings. They are not binding operative provisions of federal law. They may be evidence of legislative purpose or intent, but they do not have independent legal force. They are not law.
He’s right. And so expect this ruling to be challenged. But always remember, as the discussion of how millions will lose health insurance (they won’t), and how pre-existing conditions coverage will disappear (not likely), Obamacare, at its heart, was a trick to break the insurance market and get the country to single payer whether we wanted it or not. Because, as Ezra Klein says in the video below, at some point, you have to “win”.