A federal judge’s Dec. 14 decision that the Affordable Care Act is unconstitutional is stunning in its poor reasoning. Few, including conservative opponents of Obamacare, believe that the ruling has a chance to be upheld on appeal. But the decision, from conservative Judge Reed O’Connor in the U.S. District Court for the Northern District of Texas, jeopardizes health benefits for tens of millions of people.
O’Connor based his decision on the fact that Congress in 2017 repealed the tax penalty for those who do not have health insurance. The most controversial aspect of the Affordable Care Act was the requirement that individuals, with some exceptions, purchase health insurance or pay a tax penalty. The court upheld the constitutionality of the individual mandate in 2012’s 5-4 decision in National Federation of Independent Businesses v. Sebelius.
Congress has not repealed the requirement that everyone buy insurance or other regulations in the 2,000 page Affordable Care Act. But as part of the tax reform law adopted in 2017, Congress repealed the tax penalty for those who fail to purchase health insurance. Texas and 18 other states argued this makes the entire law unconstitutional. The Trump administration refused to defend the law. It is rare, but not unheard of, for a presidential administration to refuse to defend a federal statute. Sixteen other states, including California, intervened to defend the law.
There is a principle of constitutional law called “severability.” When a court declares a part of a law to be unconstitutional, the question is whether the whole statute should be struck down or whether the offending provision is severable from the rest of the law. In deciding whether the unconstitutional provision is severable from the rest of the statute, a court asks whether the legislature would have adopted the law without the invalidated provision.
What is strange here is O’Connor did not find any provision of the law unconstitutional. Instead, he said Congress’ repeal of the tax made the rest of the law unconstitutional because it likely would not have been adopted without the enforcement mechanism for the individual mandate. O’Connor wrote that by revising the law in 2017, Congress “sawed off the last leg it stood on . . . The court finds the individual mandate ‘is essential to’ and inseverable from ‘the other provisions of’ the ACA.”
But severability analysis does not apply at all because no part of the law was declared unconstitutional. I cannot think of any precedent for the proposition that Congress, by choosing to repeal a small part of a law, creates a basis for holding the entire statute unconstitutional.
The test for severability is whether Congress likely would have adopted the rest of the statute without the provision declared unconstitutional. Here, Congress provided an answer to the question. In 2017, Congress rejected a bill that would have repealed the Affordable Care Act. Also, when Congress repealed the tax penalty, it could have repealed the entire law, but didn’t do that. That seems overwhelming evidence that Congress believed that the rest of the law could survive without the tax penalty provision.
O’Connor focuses on whether the law would have been adopted in 2010 without the tax penalty. But that is the wrong question. The issue is what Congress desired in 2017 when it repealed the tax penalty of the Affordable Care Act. Put another way, it surely would be constitutional for Congress to enact a version of the Affordable Care Act without the tax penalty provision. Accordingly, there is no reason why a statute without it is unconstitutional.
The Affordable Care regulates the health care system in countless ways: preventing denial of insurance for preexisting conditions, prohibiting greater premiums for those with chronic medical conditions, creating insurance exchanges, regulating drug prices, expanding Medicaid coverage, increasing health care for Native Americans and the elderly and much more. It is impossible to believe that Congress wanted to repeal all of this when it rescinded the tax penalty for the individual mandate. If Congress wanted to end the Affordable Care Act, it could have done so. But conservatives did not have the votes to do this in the United States Senate.
O’Connor’s opinion is thus wrong as a matter of law and striking in its conservative judicial activism. Twice before the Supreme Court upheld the Affordable Care Act. It is very likely to do so again.