by Jordan Roberts
Director of Government Affairs, John Locke Foundation
The Affordable Care Act (ACA) faces its latest challenge in court today. Twenty state attorneys general are bringing a suit against the federal government, asking a north Texas judge to halt the enforcement of the law beginning Jan. 1st of 2019. Texas v. United States is mainly focused on the constitutionality of the controversial “individual mandate” that required most individuals to get health coverage, which was a large part of the ACA’s initial legal battle. However, the lawsuit is also attempting to get a different ruling on other provisions that deal with coverage for those with pre-existing conditions.
When the Obama Administration argued for the ACA in front of the Supreme Court, they said the individual mandate was “inseverable” from the community rating and guaranteed issue provisions. The community rating and guaranteed issue provision prohibit insurers from charging different rates based on physical factors and from declining coverage to individuals that suffered from pre-existing conditions. Chief Justice Roberts ruled that the individual mandate was a legal tax under Congress’ ability to regulate interstate commerce as long as it was a revenue-raising mechanism. This interpretation is largely what allowed the core parts of Obamacare to become law.
The Tax Cuts and Jobs Act that was signed into law by President Trump lowered the tax penalty associated with the individual mandate to zero. The mandate is still there but there is no way for the tax to collect revenue now. This is the point that the plaintiffs in Texas v. United States hope to use to convince the judge to strike down the law. Justice Roberts interpreted the individual mandate as legal so long as it creates revenue. Without the tax penalty, the law is “unconstitutional” according to the supreme court’s ruling.
The plaintiffs are also going to use this logic to go after the community rating and guaranteed issue provisions. The argument goes that since the individual mandate without a tax penalty should be illegal, then these other two provisions, that by the Obama Administration’s own arguments are inseverable from the individual mandate, should also be struck down.
Republicans are once again spread out along the political spectrum in terms of how involved they think the government should be in the state’s health insurance markets. Last week, I wrote about a group of Republican attorney generals that challenged the constitutionality of an ACA tax and won. Most of those Attorney generals are plaintiffs in Texas v. United States. At the same time, a group of senators is attempting to codify these protections into law.
Healthcare will be an important issue in the 2018 midterms after Republicans failed to enact any meaningful reform after the 2016 election. The ACA has the possibility of looking very different after the 2018 midterms which will change the healthcare strategy for this upcoming Congress.