What’s Next for ACA After the District Court Ruling in Texas v. US

On December 14, a federal judge in Texas ruled that the Affordable Care Act was unconstitutional. The ruling will most certainly be appealed—and for now, ACA remains the law of the land. Here’s what happens next, followed by details of the case below.

Immediate term: ACA is still the law (and even the Trump Administration says so)

When Judge Reed O’Connor in Texas issued his ruling in Texas v. United States—which most legal experts think is flawed—he did so only as a “declaratory judgement.” That means he did NOT immediately block the ACA from being enforced, instead leaving it as the law of the land. Unsurprisingly, Trump’s legal analysis of the case was incorrect:

Fortunately Seema Verma, the top official in charge of ongoing ACA implementation as the head of the Center for Medicare and Medicaid Services, clarified that even the Trump Administration acknowledges the ACA is still current law.

In practical terms: the Medicaid expansion, protections for people with pre-existing conditions, the health insurance marketplaces, the provision letting adult children stay on their parent’s health insurance until 26, the provision protecting consumers from excessive insurance company profit, and all of the other provisions of the Affordable Care Act are still intact.

Next step for the court case: the Fifth Circuit

California Attorney General Xavier Becerra has already announced that he and the other AGs defending the ACA will appeal Judge O’Connor’s ruling to the Fifth Circuit Court of Appeals. There are still a few procedural issues that have to be worked out in the District Court before Becerra can appeal, but this isn’t the end for this case.

Legal experts across the political spectrum agree that the reasoning underpinning O’Connor’s decision is weak. Even Jonathan Adler, a fierce ACA critic whose research inspired a previous lawsuit that reached the Supreme Court, thinks this decision will be overturned by the Fifth Circuit. There is no reasonable basis on which the courts should overturn the entire ACA because of the arguments made in this case (which we’ll explain in more detail below).

But because of decades of Republicans stacking the courts in their favor, Texas v. United States may not die at the Fifth Circuit. The Fifth Circuit is composed heavily of judges appointed by Republican presidents, including five Trump appointees. It’s not certain that these judges would rule in favor of Trump and the conservative states, but it’s an important reminder that filling court vacancies with ideologically-aligned judges has been a core component of the conservative playbook for a long time.

Either way, this could go to the Supreme Court. Whomever loses the argument at the Fifth Circuit could appeal the ruling to the Supreme Court, where four justices would need to agree to hear the case for it to be brought before them. (This is called “granting certiorari,” and it only requires four justices—not a majority.) It is unlikely that the Supreme Court would strike down the entire ACA because of this case, even with Gorsuch and Kavanaugh on the bench. The five justices who turned away the first challenge to the ACA are all still on the Court, and this case is considerably weaker on the merits.

The House may also intervene

Typically, when a state or states sue the federal government, the federal government is defended by the administration. But in this case, the Trump administration is siding with the states seeking to overturn the ACA. That’s why California and the other states have stepped in to defend it. But House Democrats may also get involved.

Immediately following the announcement of the ruling, presumptive Speaker of the House Nancy Pelosi vowed that the House of Representatives would formally intervene in the case to defend the ACA: “When House Democrats take the gavel, the House of Representatives will move swiftly to formally intervene in the appeals process…”

Democrats have been contemplating this move since the case originated. They’ve got a resolution ready for a vote that would authorize the House general counsel to join in the ACA’s defense. Intervention by the House doesn’t guarantee an outcome, but voting on such a resolution would make clear (again) that Republican campaign promises to ensure protections for people with pre-existing conditions were election season lies and not anything they ever intended to stand behind.

What you can do

As is true with most matters making their way through the judicial system, there’s just no good way to flex our constituent power in a way that directly influences this case. But there are three things we can do in the short, medium, and long run to protect health care for all Americans:

Short term: make sure House Democrats are using their control of the chamber—and the oversight and investigatory power that comes along with it—to hold the Trump administration accountable for their sabotage of our health care system. (You can read more about oversight authority in our new Indivisible Guide.) Democrats should be asking tough questions: why did the administration do next to nothing to promote Open Enrollment? Why did it cancel funding for navigators? What effect did their deliberate hostage-taking of cost-sharing reduction payments have on affordability and premiums? Why are they not doing more to reduce the cost of prescription drugs?

Medium term: build on the success of the ACA and lay the groundwork for a single-payer system. Democrats have legislation to expand the population of families who get financial assistance to afford premiums, deductibles, and co-pays. This would further increase the number of people with quality, affordable health care, and get us closer to universal coverage. But because that still wouldn’t go far enough to reshape our health care system in the structural ways necessary to guarantee that health care is a right, Democrats should lay the groundwork now for moving to a single-payer system. That means doing the work of holding hearings, hearing from experts, working through policy debates, building consensus, and drafting legislation so that it’s ready when Democrats have unified control of government. Our continued pressure can ensure they do this.

Long term: reverse the radical, conservative transformation of our judicial system. We must do everything we can starting now to block additional Trump appointees to district and circuit courts, and then take back power in the Senate and the White House to ensure that district and federal courts are occupied by qualified judges dedicated to safeguarding our rights and promoting justice -- not advancing partisan political goals for the officials that appointed them.

Further reading: Why this case started with the #GOPTaxScam, and what it could mean for our health care system

On June 7, 2018, Trump’s Department of Justice filed a brief in Texas v. United States supporting the plaintiff’s argument that critical provisions of the Affordable Care Act, including the provision that requires insurers to cover people with pre-existing conditions, are unconstitutional. It was yet another example of health care sabotage from the Trump administration.

Congressional Republicans failed to repeal the ACA last year, so now the Trump administration is trying to repeal the law using judicial tactics. In February 2018, Texas and 19 other states filed a lawsuit against the federal government arguing that, because the Tax Scam eliminated the penalty for people who don’t have insurance, major parts of the ACA are no longer workable and should be struck down. Their argument is essentially as follows:

  • The individual mandate (which imposes a penalty on people who don’t have health insurance through the tax code) was only ruled constitutional by the Supreme Court in 2012 because it was a tax.

  • When Republicans passed the Tax Scam in late 2017, the bill included a provision that reduced the penalty for not having health insurance to $0—meaning it “can no longer fairly be described as a tax,” according to Trump’s DOJ. Therefore, they say, the individual mandate is unconstitutional.

  • Because the mandate is central to many provisions of the ACA, including the requirement that insurance companies cover people with pre-existing conditions, if it is unconstitutional, the rest of the law must be unconstitutional as well.  (This is a legal concept known as “inseverability.”)

The case could still be thrown out because the plaintiffs lack standing to bring a suit, or it could be defeated on the merits because their legal argument is not compelling. However, now that the Trump administration has endorsed this position, the plaintiffs have the weight of the Department of Justice behind them—and Trump has made it clear he would rather sabotage our health care system than carry out his constitutional duty to “take care that the laws be faithfully executed.”

What is the Trump administration doing that’s unusual?

Typically, the Department of Justice will defend laws that are on the books if there is a serious argument to be made in their defense. The highest profile departure from this principle was when the Obama administration declined to defend the Defense of Marriage Act in court in 2011—but in that case, there was a fundamental question about the constitutionality of laws that discriminate against same-sex couples. This case is not one that raises fundamental Constitutional questions; it is a case about whether the individual mandate is severable from the rest of the ACA.

By taking the plaintiff’s side in this case, the Trump administration is openly flouting the law to achieve a political goal. While DOJ does not argue that the entire ACA should be invalidated—they argue that only the “guaranteed-issue and community-rating provisions” should be ruled unconstitutional now that the mandate is gone—it is still a serious departure from precedent for Trump and DoJ to declare that they won’t defend in court parts of a law to which they are politically opposed.

This decision is so unusual, and the reasoning behind it so poor, that three career lawyers at DOJ took themselves off the case rather than be part of the administration’s decision to adopt this position.

What are the implications for our health care system?

The administration’s position is an attack on people with pre-existing conditions. The provisions that the administration wants to invalidate—guaranteed issue (which requires insurers to sell health insurance to people with pre-existing conditions) and community rating (which requires insurers to charge people with pre-existing conditions and those without the same price for insurance)—form the foundation of the ACA’s protection for people with pre-existing conditions.

If Trump and DoJ have their way, 130 million Americans with pre-existing conditions will be exposed to massive price hikes as a result—and many could lose their ability to buy health care coverage at all. These Americans live in every state and Congressional district, and the conditions that would now expose them to the risk of losing their coverage include drug abuse, mental health disorders, and more.

But we can fight back. See the section called “What you can do” above and read the new Indivisible Guide that lays out how we can best use our power in the 116th Congress.

Read More