//  3/5/18  //  Commentary

I was gone last week when twenty states filed yet another lawsuit challenging the constitutionality of the Affordable Care Act. But no matter. This case isn’t going anywhere—or at least it shouldn’t go anywhere.

In their complaint, the states point out (rightly) that the Supreme Court upheld the ACA in NFIB v. Sebelius only because the individual mandate was a tax and (rightly) that Congress has now repealed the penalty for going without insurance. As the states see it, the freestanding requirement to get insurance, which is still on the books, is therefore unconstitutional. Because it’s unconstitutional, the courts must invalidate the entire ACA—lock, stock, and barrel.

If that sounds crazy, that’s because it is. Even if a penalty-free mandate is unconstitutional—and reasonable minds can differ on that score—the ACA’s elimination isn’t the proper remedy. Ilya Somin—no fan of the law—ably explains why at the Volokh Conspiracy.

[T]he Court has held that if the unconstitutional part of a law is so important to the rest that the statute as a whole cannot work as intended, then the latter falls along with the former. Otherwise, the residual law is no longer what Congress had intended to set up. …

But there is a big difference between a court choosing to sever a part of a law, and Congress doing so itself. And in this case, Congress has already effectively neutered the individual mandate, while leaving the rest of the ACA in place. It was Congress that removed the monetary penalty imposed on violators of the individual mandate, thus rendering it ineffective. And it was also Congress which chose to leave the rest of the law in place, nonetheless (largely because President Trump and the GOP leadership repeatedly failed to round up enough votes in the Senate to repeal any more of Obamacare). Unlike in NFIB, a court could not conclude that Congress’ design for the ACA would be fatally undermined without an effective individual mandate. … In this case, Congress itself has concluded that a mandate-less ACA is acceptable (or at least a lesser evil than the available alternatives).

The states also argue that a mandate-less ACA is unconstitutional because it lacks a rational basis. That’s nuts too. Repealing the mandate may be bad policy, but it’s not arbitrary in any constitutional sense, for at least three different reasons.

First, several states prior to the ACA adopted community rating and guaranteed issue—but did not adopt a mandate. New York and Massachusetts spring to mind: the latter eventually adopted a mandate, but the former never did. As policy, these state schemes suffered from predictable problems associated with adverse selection. But they weren’t irrational in any constitutional sense. Neither is the ACA.

Second, and more importantly, the ACA uses both carrots (premium tax credits and cost-sharing protections) and sticks (the mandate) to push healthy people into the individual market. Even without the stick, however, the carrots are enough to get lots of healthy people to buy coverage. If you make $30,000 a year, for example, you can buy health insurance on the exchange for about $250 a month. Lots of healthy people will take that deal, which is why the exchanges will be resilient even without the mandate. The CBO confirms as much: it estimates that federal spending on subsidies will fall from $887 billion over ten years to $702 billion, a decline of just 20%. That $702 billion will subsidize coverage for millions of people in the individual market.

Third, and more subtly, the elimination of the federal mandate doesn’t imply the elimination of state mandates. And many states—nine at the last reckoning, but likely more—are now considering the adoption of replacement mandates. Whether or not they follow through, it’s hardly irrational to vest in the states the authority to weigh the tradeoffs associated with a mandate. Indeed, Republicans claimed in the debates over repeal and replace that they were committed to federalism. Repealing the mandate partly follows through on that commitment.

* * *

The weakness of the states’ case raises questions about why the lawsuit was brought at all. Ilya Somin thinks the states want to vindicate what he calls “an important constitutional principle”: that “the federal government cannot use its tax power to impose mandates unless that mandate includes a monetary fine that raises some revenue for the government.” In what world, though, is that principle an important one? Is there some risk that Congress might otherwise adopt a raft of hortatory, penalty-free mandates? Even if it did, why should anyone care?

What the case does, instead, is force the Trump administration to decide whether it will defend the ACA from constitutional attack. The Justice Department has an entrenched, longstanding, and bipartisan commitment to defending congressional statutes if reasonable arguments can be made in their defense. It’s a bedrock convention of our constitutional structure, one that prevents the executive branch from using litigation strategy to undo Congress’s handiwork.

The Trump administration, however, doesn’t always seem to care for quaint legal conventions. It also loathes the ACA. Plus, Republicans can point to the Obama administration’s refusal to defend the Defense of Marriage Act as precedent. Don’t get me wrong, the two cases can be distinguished: refusing to defend a law that countenanced overt discrimination against a disfavored group is different from refusing to defend one that regulates health insurance. But that’s the thing about precedent. It can be stretched.

The real-world consequences of refusing to defend would be hard to predict. They might be minimal. The courts can and probably will appoint lawyers to defend the ACA, as Somin points out. (For the record, I’m happy to volunteer for that job—it’s the sort of thing I used to do when I worked for the Justice Department.) So the final outcome of the litigation shouldn’t change.

But declining to defend the ACA could have implications for whether the Trump administration chooses to enforce it. That’s a question that has become urgent with Idaho’s decision to flout the law. Unless HHS intervenes, other states will likely follow its lead. It’d be much harder for HHS to step in if the Justice Department takes the position that the whole law is unconstitutional.

At the end of the day, though, the biggest risk isn’t to the ACA. The future of health reform will turn on future elections, not this lawsuit. The biggest risk, instead, is that the litigation will further erode the norm that the executive branch must respect, enforce, and defend duly enacted statutes.

Already, I fear that the tumult over health reform over the last eight years has undermined some of our basic assumptions about the rule of law. Maybe the states that have bought this vexatious lawsuit don’t care about that. Maybe they’re willing to pay any price to hurt the ACA. But I, for one, am worried.

@nicholas_bagley


The case that could end the Texas lawsuit.

6/15/18  //  Commentary

A brief from the American Medical Association flags a Fifth Circuit case that seems to dispose of the constitutional argument in the latest challenge to the Affordable Care Act.

Nick Bagley

University of Michigan Law School

Strange Bedfellows in the Texas Lawsuit Over the Affordable Care Act

6/14/18  //  Commentary

A bipartisan group of law professors, including the two of us, has filed a brief challenging the claim that the Affordable Care Act should be invalidated.

Abbe Gluck

Yale Law School

Nick Bagley

University of Michigan Law School

A Big Loss for Insurers at the Federal Circuit

6/14/18  //  Commentary

The opinion is a $12 billion setback for insurers seeking money they're owed under the Affordable Care Act. But the costs of being cavalier about our debts extend far beyond this arcane fight.

Nick Bagley

University of Michigan Law School