WCI, Inc
Nov. 13, 2020

ACA Individual Mandate Case In Supreme Court

In a two-hour oral argument session on November 10, 2020, the U.S. Supreme Court’s questioning suggested that the court is unlikely to strike down the entire Affordable Care Act (ACA). Although it remains a possibility that the high court could find the entire law unconstitutional, the nature of the questions made that outcome seem less likely.

Fifth Circuit decision. The case, California v. Texas (known as Texas v. U.S. in the lower courts), came to the U.S. Supreme Court this year following a Fifth Circuit decision in December 2019. The Fifth Circuit, in a 2-1 opinion, upheld the Texas federal district court’s ruling that the individual mandate in section 5000A of the ACA was unconstitutional. The ACA individual mandate provision gives individuals a health care choice—either purchasing health insurance or paying to the IRS what is called in the law a "shared responsibility payment," but Congress reduced the "shared responsibility payment" to zero in 2017 without repealing the ACA.

The Fifth Circuit agreed with the lower court and held that the individual mandate was no longer a constitutional exercise of congressional power, since the shared responsibility payment had been reduced to zero. The Fifth Circuit also concluded that in National Federation of Independent Business v. Sebelius, a case decided by the U.S. Supreme Court in 2012, a majority of justices rejected the argument that the Interstate Commerce Clause or the Necessary and Proper Clause were sources of congressional authority for the payment, leaving only the argument that Congress used the taxing authority as authority for the ACA. The Fifth Circuit agreed with the Texas court that since Congress changed the shared responsibility payment amount to $0, the tax authority argument was no longer applicable. However, the Fifth Circuit struggled with the issue of severability and remanded that issue to the lower court. In March 2020, the U.S. Supreme Court took the case.

Oral arguments. From the questioning by the U.S. Supreme Court justices during oral arguments on the case, it appeared that most of the justices were not leaning towards striking down the entire law. The questioning by Justices Roberts and Kavanaugh especially signaled that the ACA would remain in some form, since they are considered more conservative justices.

From the start, Chief Justice Roberts raised doubts about the repeal of the entire law. He mentioned that it’s hard to say that Congress intended to repeal the whole law when it did not. He added, "Would Congress want the rest of the law to survive if the unconstitutional provision were severed? Here, Congress left the rest of the law intact…"

Justice Kavanaugh noted that from severability precedents, it looked like it would be proper to sever a portion and asked how the court could get around that. He added, "It does seem fairly clear that the proper remedy would be to sever the mandate provision and leave the rest of the law in place…"

Other justices also focused on the specific actions or inactions of Congress. Justice Barrett asked, "What should we make of the fact that Congress didn't repeal the provision?" Justice Kagan said that the change Congress made in 2017, that reduced the penalty to zero, made the ACA "less coercive" and added, "...so how does it make sense to say that what was not an unconstitutional command before has become an unconstitutional command now, given the far lesser degree of coercive force?"

Closing. In summing up arguments, both sides spoke to the gravity and importance of the decision of the high court.

"As it now stands, subsection (a) requires every law-abiding American to obtain health insurance, unless they fall within one of three exemptions. That broad mandate, whatever its wisdom or practical import, exceeds Congress's enumerated powers, and the Court should so hold… the Court should…adhere to the text of the ACA, stay its mandate, and allow the political branches to decide how to proceed given the peculiar circumstances of this moment," Jeffrey Wall, Acting Solicitor General, Department of Justice, said.

Michael Mongan, California Solicitor General, said, "…what's before the Court today is an enormously consequential statute. It provides health insurance and other life-saving benefits and protections to hundreds of millions of Americans. Now, there is no doubt that it has been controversial, and in 2017, Congress debated whether to keep it. But Congress ultimately chose to preserve every provision while zeroing out the tax in 5000A. If that surgical amendment created a constitutional problem, there's only one remedy that would respect congressional intent, and that's an order declaring that provision, and only that provision, unenforceable."

A decision from the high court is expected next year.

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