Politics

Supreme Court Takes Up Case That Could Wipe Out Obamacare

Congressional Dems push for quick action to keep individual mandate amid 2020 campaign

Supreme Court Chief Justice John Roberts / Getty Images

The Supreme Court said Monday it will hear a Democratic bid to protect the Affordable Care Act's (ACA) individual mandate, teeing up a major dispute over the landmark health care law in the midst of the 2020 campaign.

A coalition of blue states and congressional Democrats filed petitions with the Court after the Fifth U.S. Circuit Court of Appeals struck down the individual mandate in December 2019. The Trump administration is not defending Obamacare in the courts, leading congressional and state Democrats to intervene and take up the law's defense.

Though the Supreme Court sustained the individual mandate on tax grounds in 2012, the Fifth Circuit said that rationale is no longer justifiable because of the 2017 Tax Cuts and Jobs Act. The Trump administration's tax cuts set the financial penalty for failing to purchase health insurance at zero. Judge Jennifer Elrod said in the 2-1 decision that the mandate cannot be treated as a tax if it is not raising any money for the government.

Another question in the case is what should happen to the rest of the Obama administration's signature health care law if the individual mandate is invalidated—a question of "severability," in legal parlance. After striking down the mandate, the Fifth Circuit returned the case to a federal trial judge to determine whether other provisions of the ACA, or the statute in its entirety, should be struck down if the mandate is no longer operative.

Democrats appealed to the Supreme Court immediately, rather than wait for the outcome of those proceedings. They asked justices to resolve the dispute by summer, arguing that prolonged litigation would create profound uncertainty and harm the health care industry and patients.

"Postponing review would accomplish little beyond prolonging uncertainty about the future of the ACA, with accompanying harm to patients, doctors, businesses, and the Nation as a whole," one filing reads.

The justices generally finalize their docket for a given term in the middle of January. Cases granted thereafter are heard the following term, which begins in October, which the Democratic states argue would be too late. The Court rejected a Democratic motion to accelerate proceedings, a strong signal it was not interested in hearing the case in the near term.

The Trump administration said the Court's intervention was not necessary at this stage. Solicitor General Noel Francisco said the Fifth Circuit's decision had no practical consequence.

"The court's determination that the individual mandate is no longer valid presents no real-world exigency that might warrant immediate review because, as all parties agree, the elimination of the monetary penalty renders the mandate either invalid (as the Fifth Circuit held) or precatory (as petitioners argue)," the Trump administration told the Court in a legal filing.

Francisco also urged the justices to let the lower courts fully review the severability question before getting involved. If the Court took the case at this stage, he warned, the justices would have to conduct a detailed analysis of a 900-page statute without the guidance of a lower court opinion.

"This Court ordinarily does not consider in the first instance questions the court below has not decided," he wrote. "That general rule applies with full force here."

The Court's docket for the current term is full, meaning arguments in the Obamacare cases will likely be heard in the fall. The cases are No. 19-840 California v. Texas and No. 19-1019 Texas v. California.