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States File New Documents in Obamacare Challenge

August 17, 2018

The state challenge to Obamacare moves forward with supplemental documents filed and opening arguments set for sometime in September to decide if the law can be suspended while the legal challenge is being decided.

Twenty states challenging the constitutionality of the Affordable Care Act (ACA) filed a reply brief and a supplemental appendix in support of their case in the U.S. District Court for the Northern District Court of Texas in July.

The states’ attorneys general filed a joint lawsuit in February challenging the constitutionality of the ACA, also known as Obamacare. The plaintiffs argued Congress’ elimination of the individual mandate in 2017 means the ACA is no longer constitutional because the U.S. Supreme Court’s decision upholding the law was based on the existence of the penalty for noncompliance, which the Court ruled was a tax.

Critical Role of Individual Mandate

Since its inception in 2010, Obamacare has faced a variety of lawsuits. In the most important case to date, National Federation of Independent Business v. Sebelius, the U.S. Supreme Court ruled in a 5-4 decision in 2012 the law passed constitutional muster because the individual mandate was a tax, and Congress has the power to tax under the Commerce Clause.

In 2017, President Donald Trump signed the Tax Cuts and Jobs Act, which eliminated the individual mandate penalty. Twenty states then filed a case challenging the ACA, arguing the law relies on the mandate for its constitutionality.

“Once the heart of the ACA—the individual mandate—is declared unconstitutional, the remainder of the ACA must also fall, … without any accompanying exercise of Congress’s taxing power, which the Supreme Court already held that Congress has no authority to enact,” the lawsuit states. “Not only is the individual mandate now unlawful, but this core provision is not severable from the rest of the ACA—as four Justices of the Supreme Court already concluded. In fact, Congress stated in the legislative text that the ACA does not function without the individual mandate.”

DOJ Declines to Defend

The U.S. Department of Justice (DOJ) declined to defend the ACA in the U.S. District Court for the Northern District of Texas in June. Instead, the DOJ filed a brief indicating it would not defend the ACA against the challenge, though it stopped short of endorsing the states’ argument the end of the penalty makes all of ACA unworkable.

“Although Plaintiffs speculate as to a chain reaction of failed policymaking that could occur once the individual mandate is struck down, they cannot show that striking down the individual mandate, guaranteed-issue, and community-rating requirements means that the ACA necessarily ‘ceases to implement any coherent federal policy,’” the brief states.

The states are asking for an injunction to block enforcement of the ACA beyond January 2019. The DOJ is requesting a declaratory judgment, which is essentially a court’s opinion without enforcement.

Expectations are that any ruling will be immediately appealed, with the case likely to go to the U.S. Supreme Court for a final decision.

Suit ‘On Very Strong Ground’

Randy Barnett, a professor at the Georgetown University Law Center, says the lawsuit could succeed.

“On this claim, the states’ Attorneys General [who brought the suit] are on very strong ground,” Barnett said. “NFIB v. Sebelius was a bigger victory than we realized when it was decided, as it left the insurance mandate susceptible to being killed off in this way via [the congressional process of] reconciliation.”

Mandate ‘Was Never Constitutional’

Justin Haskins, a research fellow at The Heartland Institute, which publishes Health Care News, says the lawsuit puts the entire ACA in jeopardy.

“The Affordable Care Act's individual mandate was never constitutional, and Justice John Roberts' creative attempt to save the mandate was an egregious abuse of judicial power,” Haskins said. “But now that the individual mandate penalty has been eliminated, there's absolutely no justification, even based on the Supreme Court's faulty past decisions, to continue to uphold the ACA. The Supreme Court has on numerous occasions recognized that it does not have the power to create new legislation. That power belongs to Congress alone. Thus, the court has determined in previous cases that when a provision of a law is found to be unconstitutional, the entire law must be struck down if it is determined Congress would not have passed the law in the first place absent that provision.”

Haskins says the ACA relies on the individual mandate and is unconstitutional without it.

“In this case, the individual mandate was repeatedly called 'essential' to the law's operation, so it's perfectly reasonable to assume that the Democrat-led Congress of 2010 would never have passed the ACA without the individual mandate or another similar penalty,” Haskins said. “That means the ACA, or at least large portions of it, should now be struck down, and in its place, Congress should create new legislation that doesn't violate Americans' constitutional rights.”

Hoist With Own Petard

Dr. Deane Waldman, director of the Center for Healthcare Policy at the Texas Public Policy Foundation, says ACA’s travails are the fault of those who wrote it and voted for it.

“Those who oppose the lawsuit and wish to uphold the ACA find themselves in a legal conundrum of their own making,” Waldman said. “They are on record as saying the ACA law is dependent on having the individual mandate—name-changed to ‘penalty tax’ per the Supreme Court in 2012. Since that tax no longer exists, then by their own logic, the law can no longer exist and must be struck down as illegal and unconstitutional.”

INTERNET INFO:

Texas v Azar, U.S District Court, Northern District of Texas, Ft. Worth Division, February 26, 2018: https://www.texasattorneygeneral.gov/files/epress/Texas_Wisconsin_et_al_v._U.S._et_al_-_ACA_Complaint_(02-26-18).pdf

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Chris Talgo is editor for The Heartland Institute

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