If ruling stands, millions could lose health care coverage

Article 1, Section 8, grants Congress a number of enumerated powers to enact laws, including the power to "lay and collect taxes" and to regulate commerce among the various states. In order to be constitutional, any law passed by Congress must be based on an enumerated power.

In 2010, Congress passed the federal Affordable Care Act (Obamacare) to provide "near-universal" health coverage and to "lower health insurance premiums" through the "creation of effective health care markets." Among other requirements, the law mandated Americans obtain health insurance. This requirement to "maintain minimum essential" health care insurance coverage became known as the individual mandate. Congress was concerned that without the mandate many individuals might simply wait to purchase health insurance until they needed care. To prevent this type of strategic behavior, Congress imposed a "shared-responsibility payment" or tax penalty for not complying with the mandate.

The ACA proved to be legally and politically controversial. States, businesses and individuals challenged the constitutionality of the law on the theory that it was beyond Congress' enumerated powers. In 2012, the constitutional challenge reached the U.S. Supreme Court in National Federation of Independent Business v. Sebelis, 567 U.S. 519 (2012) (NFIB). In a splintered 5-4 decision, the court found that the individual insurance mandate and shared-responsibility tax payment were constitutional based on Congress' power to tax. The court generally agreed, however, that the law could not be justified on Congress' power under the commerce clause.

In 2017, the Republican controlled Congress passed the Tax Cuts and Jobs Act through budget reconciliation process, which limits congressional action to fiscal matters. In an indirect attack on the ACA, Congress reduced the shared responsibility tax payment penalty to zero. As a result, the tax penalty for not having insurance was effectively gone. The new tax law did not repeal any part of Obamacare, nor could it through the budget reconciliation process. It did, however, plunge a legal dagger through the heart of the law. Without the tax penalty, there was no consequence to ignoring the requirement to have insurance. What is more important, removing the tax penalty, which was the constitutional foundation of the law, invited another legal challenge to the ACA.

In Texas et al. v. United States et al. (4:18-cv-00167), republican officials from 20 states sued to invalidate the individual mandate. They argued that without the tax penalty to produce revenue, which is the essential feature of any tax, the mandate was unconstitutional and that the entire law should be struck down. District Judge Reed O'Connor, for the northern district of Texas, agreed. In late 2018, he held that "The Supreme Court's reasoning in NFIB -- buttressed by other binding precedent and plain text-thus compels the conclusion that the Individual Mandate may no longer be upheld under the Tax Power. And because the Individual Mandate continues to mandate the purchase of health insurance, it remains unsustainable under the Interstate Commerce Clause -- as the Supreme Court has already held." Congress had unequivocally stated that the mandate was "essential" to the continued viability of the ACA, and that it would never have enacted the law without the individual mandate. Thus, without its essential feature, the law would have to be dismantled, and it was beyond the power of the court to save the ACA.

The Trump administration has announced that the federal government will continue to enforce the ACA pending an appeal. On Jan. 3, a notice of appeal was filed with the 5th U.S. Circuit Court of Appeals. As the case moves forward, one challenge is certain to be severability. When a court holds a portion of a statute unconstitutional or unenforceable, it has to decide what to do with the rest of the law. Judge O'Connor found that the individual mandate and other parts of the law were not severable and could not stand alone.

The use of the budget resolution process, as opposed to amending or repealing the ACA, might suggest Congress' intent to leave the law in place after the tax penalty was eliminated. But even if the mandate or the rest of the law can be successfully severed, it is not clear that an enumerated power supports the continuation of the ACA given the Supreme Court's rejection of the commerce clause reasoning in NFIB v. Sebelis. Thus, the ACA may be headed back to the Supreme Court for another look at the constitutionality of what may be left of Obamacare.

Since the ACA became embedded as part of the health care system, Americans without health insurance dropped from 16.8 percent to 10.2 percent. If district court's ruling stands on appeal, the American health care system will be thrown into turmoil. Millions of lives will be affected. Some 15 million Americans will lose coverage, including young adults covered by their parent's health insurance and those with pre-existing conditions. The 2018 midterm election demonstrates that most voters are concerned about health care costs and coverage. Those politicians opposed to ACA are apt to face challenging questions as they seek reelection, and may ultimately reap a sour political harvest for their opposition by the voters in 2020.