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What’s Next for ACA In the Courts

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On December 19, the Fifth Circuit Court of Appeals ruled that the individual mandate (the requirement that people buy insurance or pay a penalty) in the Affordable Care Act (ACA) is unconstitutional, and ordered Judge Reed O’Connor in Texas to decide if the rest of the law is unconstitutional as well. The important thing to know is that for now, nothing has changed and no one has lost their health insurance coverage—but this case is another example of how Trump, House and Senate Republicans, and Republican Attorneys General in the states are using the courts to wage a relentless campaign to attack our health care system.

This decision is part of the same health care repeal lawsuit (Texas v. United States) where Trump’s Department of Justice said in a legal filing that the Fifth Circuit Court should strike down the entire ACA. This case was initiated by Attorney General Ken Paxton of Texas, along with the conservative attorneys general of over a dozen other states, who filed a lawsuit in February 2018. The case is more than likely headed to the Supreme Court, probably after the election in November 2020. Here’s what else you need to know, and what will happen next.

Immediate term: ACA is still the law

Despite the federal government arguing that the entire ACA should be ruled unconstitutional (which is what Judge Reed O’Connor ruled in his decision for the District Court for the Northern District of Texas in this case in December 2018, and what he will likely rule again now that the case has been sent back to him), nothing about the ACA has  changed for now. The court decision in the Fifth Circuit was merely another step in the case’s eventual journey to the Supreme Court.

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: back to the district court

California Attorney General Xavier Becerra announced that he and the other Attorneys General defending the ACA will appeal the 5th Circuit Court’s ruling to the Supreme Court, but unless the Court agrees to hear the case before Judge O’Connor hands down his new decision (which is unlikely) it will go back to the lower court again. Because the federal government, which would ordinarily be the defendant in a case that challenges federal law, is siding with Texas and the other conservative states, AG Becerra (and others) had to step up to defend the ACA in its place. 

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 should have been 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 didn't die at the Fifth Circuit. The Fifth Circuit is composed heavily of judges appointed by Republican presidents, including five Trump appointees. It was never certain that these judges would rule in favor of Trump and the conservative states, but the fact that they did is an important reminder that filling court vacancies with ideologically-aligned judges has been a core component of the conservative playbook for a long time.

Republican judges on the 5th Circuit made the decision that most benefited Republicans politically. Texas v. US was handled by a three-judge appeals court in New Orleans, consisting of Carolyn Dineen King, appointed by President Jimmy Carter in 1979; Jennifer Walker Elrod, appointed by President George W. Bush in 2007; and Kurt Engelhardt, appointed by Trump in 2018. Unsurprisingly, the two Republicans decided to make the decision that was most likely to drag the case out past the 2020 election because they feared that overturning the ACA would hurt Trump politically.

This will likely go to the Supreme Court in the end. Once Judge O’Connor hears the case again and makes his decision, it will likely be appealed to the 5th Circuit and then 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 of Representatives also joined the case

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 have also gotten involved. 

Immediately following the announcement of the ruling in December, 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…” And in February 2019, the Fifth Circuit granted the House’s petition to join AG Becerra and the other states in defending the ACA’s constitutionality.

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 Indivisible Guide 2.0.) Democrats should be asking tough questions: what serious legal basis does the administration have for not defending any part of the ACA? 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. We’ve got explainers on the different proposals on the table for what comes next on health care, and on Rep. Pramila Jayapal’s Medicare for All Act. Democrats should lay the groundwork now for what comes next. 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 in 2020 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. Other non-federal offices also have the authority to intervene in federal lawsuits, so it is important to support those down-ballot races throughout this country, as many of these offices can be used to fight for health care. This is what California Attorney General Becerra and other state AGs are currently doing in their fight for the ACA. 

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

It was because of a decision Trump and the GOP made in the course of passing the GOP Tax Scam that this lawsuit was even possible. 

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 previously argued that online certain parts of the ACA should be invalidated (a decision so poorly thought-out that three career lawyers at DOJ took themselves off the case rather than be part of the decision to it), they have now gone even further to say that the entire ACA should be ruled invalid.

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.

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