California v. Texas: The ACA Litigation Saga Continues

California v. Texas: The ACA Litigation Saga Continues

On May 13, 2020, 39 amici curiae (friends of the court) briefs were filed in California v. Texas, the latest challenge to the constitutionality of the Affordable Care Act. These briefs were submitted by an impressive range of entities—medical associations; health care providers; insurance companies; small businesses; members of Congress; states; cities, counties, and towns; disease groups; public health experts; legal scholars; unions; and health advocates. All of these amici ask the Court to uphold the ACA. The National Health Law Program filed a brief, which I will summarize in a moment. First, some background.

President Obama signed the ACA into law on March 23, 2010. In addition to establishing a pathway to comprehensive health coverage, the ACA immediately became an “Attorney Compensation Act,” with four different lawsuits challenging the constitutionality of the ACA filed by sunset on March 23.

By the end of the year, more than two dozen cases were working their way through the courts. One of them, National Federation of Independent Business v. Sebelius, made it to the U.S. Supreme Court.

The Court heard six hours of oral argument in the case over three days—a modern day record for the Supreme Court. Over 140 briefs were submitted in the case—an all-time Supreme Court record at the time. The NFIB Court focused on the part of the ACA called the “individual mandate,” which requires individuals to have minimum health insurance or pay a tax penalty. The Court upheld the provision as a valid exercise of Congress’s taxing power. Unfortunately, health coverage for the poor did not fare as well. The Court decided that it would be unduly coercive to require states to implement the ACA’s mandatory Medicaid expansion to non-disabled, non-elderly adults. This made the states’ initial decision whether to expand Medicaid optional. You would think that the NFIB ruling would have put an end to the ACA litigation. But no.

In 2017, Congress decided to set the tax penalty for failing to have minimum coverage at zero but kept the remainder of the ACA intact. Two individuals and a group of red states went back to court, arguing that Congress’s action made the individual mandate unconstitutional and, as a result, the entire ACA had to fall. They filed their case with their preferred federal district court judge, Reed O’Connor, who has repeatedly demonstrated his opposition to Obamacare. True to form, Judge O’Connor struck down the ACA. After the Fifth Circuit Court of Appeals, an acknowledged conservative bench, also ruled for the plaintiffs, the Supreme Court agreed to hear the case, which brings us to NHeLP’s brief. The brief focuses on whether the ACA’s Medicaid provisions should remain in effect if the Court finds the individual mandate is now unconstitutional. In legal parlance, we are asking the Court to “sever” any unconstitutional portions of the ACA and recognize that the remaining portions are still enforceable, including the Medicaid provisions.

Hopefully, the Court will never reach the Medicaid question. For the Court to get to the Medicaid provisions, here is what has to happen. First, the Court will have to find that at least some of the plaintiffs have standing to bring the case—that they are being harmed because they do not have to pay a tax penalty for failing to have health insurance coverage. Then, the Court will have to decide that what remains of the individual mandate is unconstitutional, as opposed to being simply unenforceable and carrying no legal consequence. Only at that point would the Court need to consider, as a matter of severability principles, whether other provisions of the ACA cannot be severed from what remains of the individual mandate. Each of these elements is dubious.

If the Court subjects the remainder of the ACA to a severability analysis, the conclusions it should reach about Medicaid are clear.

If the Court subjects the remainder of the ACA to a severability analysis, the conclusions it should reach about Medicaid are clear.As described in the NHeLP brief, the ACA contained a number of provisions to improve the Medicaid program and ensured that coverage is available and accessible for low-income people. Congress did not originally enact these provisions because of the minimum-coverage requirement. On the contrary, the Medicaid amendments in the ACA aren’t related to that provision. The Medicaid amendments are part of Title II, while the tax penalty is part of Title I of the ACA. The Medicaid amendments make changes in Title XIX of the Social Security Act, while the individual mandate involves an amendment to the Internal Revenue Code, with associated amendments to the Public Health Service Act.

Further, the ACA provisions build on the Medicaid Act as it has evolved, including, for example; the provisions expanded coverage to non-elderly, non-disabled adults (18 states already had federal permission to cover this group); expanded coverage of former foster youth up to age 26 (the Medicaid Act already provided less generous coverage); expanded other features that were already part of Medicaid, including presumptive eligibility, spousal impoverishment protections; additional options for home and community-based services, and additional treatment options for Medicaid-eligible children. You get the picture. The ACA Medicaid amendments build on statutory structure that already existed. Over the 55-year history of the Medicaid Act, Congress has made similar amendments on many occasions. The ACA amendments were par for the course.

NHeLP’s brief can be read here. NHeLP was joined on the brief by a range of organizations dedicated to improving access to quality health care for a diverse array of people: the American Medical Student Association, American Physical Therapy Association, Asian and Pacific Islander Health Forum, Association of Asian Pacific Community Health Organizations (AAPCHO), California Pan-Ethnic Health Network, Law Foundation of Silicon Valley, National LGBTQ Task Force, National Women’s Health Network, Reproductive Health Access Project, and We Testify.

The case will be argued in the fall, perhaps around November election time. Let’s hope all goes well that month.

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