Obamacare Case Presents Renewed Opportunity to Restrict Agencies

The Affordable Care Act is back before the US Supreme Court, this time giving the conservative majority another chance to dismantle the administrative state.

The case, scheduled for conference Friday, questions whether a board advising the Health and Human Services Department lacked constitutional authority to identify the preventive services that the ACA requires employer health plans to pay for in full.

If the justices find the board lacks that authority, the ruling would partially wipe out a key ACA provision and millions of Americans likely won’t be able to afford—and won’t get—cancer screenings, mental-health reviews, and preventive drugs that their insurers currently cover without cost-sharing, patient advocacy groups say.

The top court is “highly likely” to grant review because the case involves important constitutional issues, said Epstein Becker & Green PC’s Richard Hughes IV.

It’s also likely to reach beyond health care and affect the “structure of countless independent boards across the federal government,” said Stacey Lee, a professor at Johns Hopkins University’s Carey Business School and the Bloomberg School of Public Health.

The justices could create “new frameworks for balancing expertise, accountability, and constitutional requirements” at agencies in many different fields that rely on scientific and technical expertise, she said.

And the petition comes on the heels of a more widespread pushback against traditional agency law.

The Supreme Court just last term dismantled the long-standing Chevron deference doctrine, which required courts to defer to reasonable agency interpretations of unclear laws, in Loper Bright Enterprises v. Raimondo. It also limited administrative law judges’ powers at the Securities and Exchange Commission and allowed a challenge to a 2011 Federal Reserve bank fee rule to proceed despite a long-expired statute of limitations.

‘Principal’ Officers

HHS Secretary Xavier Becerra asked the top court in September to review a US Court of Appeals for the Fifth Circuit decision that one of three independent boards that Congress tasked with identifying ACA-covered preventive services lacked authority to do so.

The appeals court ruled that Preventive Services Task Force members were “principal” US officers and thus had to be nominated by the president and confirmed by the Senate under Article II of the US Constitution. Because that hadn’t happened, it said the members’ recommendations weren’t valid—at least with respect to the named plaintiffs, employers Braidwood Management Inc. and Kelley Orthodontics.

The petition will require the Supreme Court to delve into the meaning of Article II’s appointments clause, which gives the president power to appoint principal officers, subject to the Senate’s advice and consent, said Robert Peck, the founder and president of the Center for Constitutional Litigation.

There are outstanding questions about who is a “principal” officer, he said. Agency secretaries can appoint “inferior” officers—but the appointments clause doesn’t define the terms, Peck said.

The key appears to be whether the officer in question is subject to a superior officer’s supervision and control, he said. In this case, Becerra argued that the PSTF members were inferior officers because he has the power to remove them, Peck said.

‘Scalpel Over a Bludgeon’

But the 1984 law that created the PSTF requires its members to act independently to the extent possible as a means to insulate them from political pressure, Hughes said. The Fifth Circuit read this phrase to mean that the board lacked effective supervision by a constitutionally appointed officer, he said.

Even if the justices read the language the same way, they still could maintain the board’s existence by deleting that clause from the statute, Hughes said.

The top court usually “prefers a scalpel over a bludgeon,” and it recently used that approach to resolve an appointments clause problem by removing similar protections for Patent Trial and Appeal Board judges from the Patent Act, he said.

Provisions that created other boards that lack similar language, moreover, might limit the reach impact of the ACA case, Hughes said.

Alternatively, the Supreme Court simply could deny review if it lacks the appetite for dismantling the administrative state again so soon after Loper Bright, Peck said.

It’s also possible the Trump administration could withdraw the petition, but the plaintiffs didn’t oppose review of the appointments clause question, Hughes said.

Nondelegation Question

The employers, in fact, separately asked the Supreme Court to also review Congress’ delegation of power to the two other boards: the Health Resources and Services Administration and the Advisory Committee on Immunization Practices.

The Fifth Circuit found no appointments clause problem as to them, but it left an open question regarding the nondelegation doctrine, which prohibits legislators from delegating their lawmaking authority without providing an “intelligible principle” to guide the delegatees’ discretion.

In the ACA, Congress made a straightforward and narrow delegation with intelligible principles to guide the boards, Hughes said. It “took great care” to merely ask them to “fill in the details” about what should be included in the preventive services mandate, he said.

The justices recently granted review in two other nondelegation doctrine cases, potentially reducing the odds of a grant on the issue in this case, Hughes said. And the Supreme Court hasn’t invalidated a federal law based on the nondelegation doctrine since 1935.

The major questions doctrine could present a greater challenge, Hughes said.

This doctrine requires Congress to provide clear authorization when it delegates matters of great political or economic significance to federal agencies. It most recently was used to strike down student loan forgiveness provisions that weren’t clear on whether Congress intended to delegate its authority on the issue, he said.

It’s possible the court will consider a decision on which services should be fully covered to be a major question that can’t be delegated, as it affects insurers and employers throughout the US, Hughes said.

The cases are Becerra v. Braidwood Mgmt., Inc., U.S., No. 24-316 and Braidwood Mgmt., Inc. v. Becerra, U.S., No. 24-475.