OP-ED: GOP’s nightmare scenario playing out in its Obamacare lawsuit

Jon Healey
Los Angeles Times
Cary Clark, dressed as the Grim Reaper, protests during a rally at Burnett Park in Fort Worth, Texas, Wednesday, Sept. 5, 2018. (Max Faulkner/Fort Worth Star-Telegram/TNS)

The 2020 election is shaping up to be yet another referendum on health care, thanks to a long-shot lawsuit against the Affordable Care Act that has somehow stayed alive in the courts.

A three-judge panel of the U.S. 5th Circuit Court of Appeals in New Orleans took up the case of Texas vs. Azar on Tuesday, with two of the three jurists suggesting strongly that a now-neutered provision of the law — the mandate that adult Americans obtain insurance coverage — was unconstitutional. So much for the hope that a more senior appeals panel would summarily reject the bizarre lower-court ruling that threw out the entire ACA.

The possible outcomes here tend to be bad for consumers — and worse for Republicans, given that the lawsuit was brought by a group of top Republican officials from 20 states. The panel could declare every section of the Affordable Care Act unconstitutional, immediately jeopardizing the health coverage of the roughly 20 million Americans who obtained it through the ACA (most thanks to the expansion of Medicaid). Or it could just kill the insurance reforms that are intertwined with the individual mandate, threatening the ability of some 50 million Americans with preexisting conditions to obtain coverage down the road.

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Either one of those outcomes would force GOP candidates to defend the attack on a law that grew more popular the closer congressional Republicans came to repealing it. A partial repeal that killed the protections for preexisting conditions would be the worst of all for Republicans, given the public’s overwhelming support for those provisions. And when supporters of the law appealed to the Supreme Court, this particularly noxious aspect of Republican health policy would stay in front of voters well into 2020.

But keep your fingers crossed, Mitch McConnell! The appeals court could rule that the states have no standing to sue because they suffered no injury from Congress’ decision to repeal the tax penalty for those who do not obtain insurance. It’s quite a stretch to suggest that it’s injurious just to be ordered to do something even if there’s no consequence for not complying.

Of course, that’s just what one of the 5th Circuit jurists did suggest. So that’s not a likely outcome.

But here’s another possibility: The court could strike down the individual mandate as unconstitutional, but leave the rest of the law in place. The argument that the mandate’s tax penalty was a linchpin for the entire act is risible — it has nothing to do with the Medicaid expansion, the premium subsidies for lower-income Americans, the creation of state insurance-buying marketplaces, or many other important provisions of the law. And because the insurance market didn’t go into a death spiral after the penalty was repealed in late 2017, it’s not even clear that the mandate is now inseparable from the other insurance reforms, such as the requirements that insurers cover all applicants and not charge more to cover people with preexisting conditions.

Admittedly, the individual mandate was originally seen as key to preventing the state exchanges that the ACA created from attracting a disproportionately sick base of customers. But as noted by Jonathan Adler, a law professor at Case Western Reserve University, that mandate is gone now. What remains is unenforceable and more symbolic than substantive. “The mandate at this point should be completely severable” from the rest of the law, Adler wrote in an email, “because it is not the mandate that Congress enacted in 2010.”

Yet that seems like an unlikely result too, given how much the panel members struggled with the whole issue of severability. This despite the fact that the Supreme Court did precision surgery on the act in 2012, eliminating the requirement that states expand their Medicaid programs to more low-income adults but retaining the option that they do so.

It’s past time for me to insert the familiar caveat that it’s risky to judge where judges may be going on a case by the questions they ask from the bench. So it’s still a possibility that the panel will throw the case out because the plaintiffs lack standing to sue, which they clearly do. And that would be the most sensible outcome. But I’m not holding my breath.