Can a law be unconstitutional if it doesn’t exist? That may sound like an abstract riddle, like the proverbial tree falling in a forest, but it is central to a lawsuit challenging the constitutionality of the Affordable Care Act. The suit, brought by 20 Republican attorneys general, seeks to have the entire law thrown out, and the Trump administration recently announced its support.
The challengers’ argument goes like this. In 2012, the Supreme Court upheld the ACA’s mandate requiring all Americans to maintain health insurance or pay a penalty. The court characterized the penalty as a tax, but one that is waived for those who have coverage. Under this reasoning, the mandate is a tax penalty that comes under Congress’ broad power over taxation.
In the huge tax bill enacted late last year, the amount of the penalty was reduced to zero starting in 2019. The challengers assert that since no amount will be assessed for going without insurance, the mandate can no longer be characterized as a tax, thereby eliminating its constitutional underpinning.
They claim this invalidates all of the ACA, even provisions that have nothing to do with the mandate. The Trump administration’s position doesn’t go quite this far. It only wants the consumer protections for sick and injured insurance buyers to be eliminated.
This argument amounts to nonsense. With the penalty reduced to zero, the mandate no longer exists. The law contains no other penalty for choosing to be uninsured. It doesn’t matter whether you call the mandate a tax or anything else, as of 2019, it will no longer be in force. By what stretch of logic can a law that that is not in effect be considered unconstitutional?
The argument makes even less sense, if that is possible, when you consider that Congress’ power to re-impose the penalty in the future remains on the books. There is ample precedent for a tax to be suspended and then re-imposed. If Congress were to resurrect the penalty at some point, would the mandate become constitutional again? Or is it only unconstitutional when it isn’t in effect?
Even if the challengers could overcome this void of logic, they would face a second one in their request to have the entire law invalidated. They argue that the mandate can’t be severed from the rest of a law, so if it is declared unconstitutional, everything must go.
The guiding legal principle when a court strikes down part of a law is to look to Congress’s intent concerning the other parts. Congress did not declare its intent in the text of the ACA, but the intent of its recent actions is crystal clear. A few months before repealing the mandate penalty, it defeated a bill to repeal all of the ACA. If it had intended that the end of mandate would eliminate the law’s other provisions, it would not have voted to keep them.
It would be hard to imagine a more frivolous lawsuit. Yet the Trump administration has taken the highly unusual step of siding with the challengers and refusing to defend it. That role will be filled by 17 Democratic attorneys general.
With such a flimsy legal claim, why would the Trump administration pick up the challengers’ cause? The reason most likely has less to do with legal reasoning than with finding a new opportunity to sabotage Obamacare by disrupting the insurance marketplaces.
Regardless of which way the trial judge rules, an appeal is virtually certain. The case could well go all the way to the Supreme Court, a process that could take years. In the meantime, the litigation will inject an added element of uncertainty for insurers that participate in the marketplaces. That uncertainty, coupled with other Trump administration actions, like permitting the sale of barebones policies outside the marketplaces, could lead some of them to impose additional price hikes or to withdraw from the market altogether. It seems more than coincidental that the administration’s announcement came just as insurers are reaching decisions on prices and participation for next year.
By the time the case is finally resolved, it will have cost millions of dollars in legal expenses, not to mention additional millions that consumers will have to pay in higher prices for insurance. That money would be much better spent expanding coverage for sick patients than litigating a frivolous claim that seeks to take away their health care, instead.