GOP’s Latest Lawsuit against Obamacare Raises Old Arguments, Faces New Challenges

ObamacareTwenty Republican-controlled states have filed a new federal challenge to Obamacare’s controversial individual mandate, which was the focal point of the unsuccessful 2012 lawsuit that narrowly upheld the ACA.  Recent developments by Republicans in Congress to remove a penalty for non-compliance of the individual mandate likely undercut the 2012 legal argument used to justify it, meaning the primary focus of the recent lawsuit could be to question whether or not the entire ACA must be invalidated because one key provision is unconstitutional.

New GOP Lawsuit Challenges Constitutionality of the Individual Mandate

In the 2012 NFIB v Sebelius Supreme Court ruling, the Justices narrowly upheld the constitutionality of the Affordable Care Act’s (ACA) individual mandate by classifying the requirement as a tax.  In an unsuspected ideological departure, Chief Justice John Roberts proved to be the key swing vote in a 5-4 decision, writing that despite other potential avenues of legal justification, the individual mandate was only constitutional if it was considered a tax as authorized by the Tax Clause of the Constitution.  According to Roberts’ majority opinion, because violations of the individual mandate were subject to a fine collected by the IRS, this made the clause a revenue producing requirement that fell under the umbrella of taxes.

Roberts’ opinion was criticized heavily by Republicans at the time who argued against any constitutional justification for the mandate, but now, nearly six years later, circumstances have aligned to present the GOP with opportunity to use Roberts’ distinction as a means to finally quash the mandate.  In 2017, the Republican controlled Congress passed a bill which dismissed the fine which had been imposed against people who disobeyed the health insurance mandate once considered central to the sustainability of the ACA.  Even though the mandate still exists, there is no longer a penalty, which opens the door for a constitutional challenge.  The 20 GOP states in the current lawsuit viewed this absence of a financial penalty as a clear indicator that the individual mandate is no longer generating revenue for the government, and, therefore, is no longer a tax.

Since the mandate is no longer a tax, and since the NFIB majority explicitly ruled against other Constitutional justifications, the argument follows that the individual health insurance requirement has lost its constitutional pillar.  This argument has a good chance of being convincing in federal court because without payment there is no taxation, and without the tax justification there is no legal support for the mandate.

Republican Lawsuit Argues the Obamacare must Fail without Mandate

According to the lead plaintiffs against the ACA, Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Shimel, without the individual mandate, considered by many on both sides to be a core provision of the law, President Obama’s landmark health insurance legislation must be dismantled entirely.  The thrust of the 2012 challenge to the ACA was that the individual mandate, considered even by the law’s framers as a foundational part of the law’s financial sustainability, was not “severable” from the rest of the legislation.  Therefore, the effort against the individual mandate argued simply, if the mandate is unconstitutional the entire law must also be since the mandate is crucial to its existence.

Now in 2018, the 20 GOP state plaintiffs are hoping for the same line of logic to apply given that they have a much stronger constitutional challenge against the controversial centerpiece of 2012’s lawsuit.  Although the circumstances regarding the mandate have changed since 2012, Republican challengers still argue that the mandate is both theoretically and practically crucial to the ACA.  The GOP plaintiffs seem to be adopting an argument that once a core provision means always a core provision, which makes the mandate a still central feature; and further, a still existing mandate, albeit one without any enforcement provisions, arguably still causes most people to buy insurance because most people like to follow the law even without the so-called stick of punishment.

While these arguments may sound theoretically reasonable, their practical effect is unlikely to undercut the entire health care system created by President Obama.  The reality of the mandate has changed, and likely so to have the legal arguments that it cannot be severed from the larger ACA.

Individual Mandate Challenge Unlikely to Dismantle Obamacare

What is true about the passage of time in life is also certain in legal structures: as time marches on, changes occur, and issues that were once important can lose relevancy in a shifting landscape.  Despite theoretical rhetoric, the reality of the individual mandate sits at a stark comparison to its glory days as a key component of the ACA, and the strongest argument against the GOP’s position that the mandate is necessary to Obamacare comes from the Republican Congress’s explicit action to separate it by reducing its value to $0.  According to the Congressional Budget Office, the ACA is financial stable without the mandate, which suggests that the new set of policymakers have effectively severed it from the rest of the law both in theory and in practice.

With the mandate being neutered by the GOP Congress, it does not appear that even a successful constitutional challenge to it will bring down Obamacare.  That path is likely closed, however, the coalition of Republican lawmakers are aided by the fact that the Trump administration is unlikely to mount a serious defense of the law.  The case is unlikely to succeed, but any challenge to the ACA is worth keeping an eye on.

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