High Court to Hear Democrats’ Obamacare Appeal as Election Nears

The U.S. Supreme Court agreed to hear a Democratic appeal that seeks to reaffirm the Affordable Care Act’s constitutionality, taking up a blockbuster case that could make health care a central issue in the run-up to the presidential election.

The justices will review a federal appeals court decision that found part of the original 2010 Obamacare law unconstitutional and left doubt about the rest of it. President Donald Trump’s administration is largely backing efforts by Republican-led states to invalidate the law, including its protections for people with pre-existing conditions.

Democratic-run states had sought fast-track review of their appeal to ensure a decision by June, but the court instead will hear arguments in its next term, which begins in October, with a ruling likely in the first half of 2021. Under the court’s normal scheduling practices, that would put the arguments just weeks before the Nov. 3 election.

A California-led group of 20 states plus the District of Columbia argued in their appeal that the nation’s health-care system is too important to allow continued uncertainty.

The appeals court ruling “cast doubt on the validity of the entire ACA, arguably the most consequential package of legislative reforms of this century,” the group argued. “That uncertainty threatens adverse consequences for patients, providers and insurers nationwide.”

‘Chronically Uncertain’

The Obamacare fight stems from a provision known as the individual mandate, which originally required people to acquire health insurance or pay a tax penalty.

The Supreme Court in 2012 upheld that provision, with Chief Justice John Roberts calling it a legitimate use of Congress’s taxing power. A Republican-controlled Congress later joined with Trump to zero-out the tax penalty, leaving the mandate without any practical consequences.

The New Orleans-based appeals court said the mandate was unconstitutional without a tax penalty attached to it. The appeals court didn’t decide whether the rest of the law could stand, instead returning the case to a federal trial judge for closer scrutiny.

At the Supreme Court, the Trump administration and states led by Texas said the justices should let that process go forward.

“Immediate review is unwarranted in the case’s present posture because the court of appeals did not definitively resolve any question of practical consequence,” U.S. Solicitor General Noel Francisco argued in court papers for the administration.

Texas Solicitor General Kyle Hawkins argued that “the ACA’s future is chronically uncertain, and nothing this court does will change that.”

‘Stark Reminder’

Democrats hailed the court’s decision to intervene -- and raise the profile of an issue they say will help them with voters.

“For Americans who care about saving their health care, especially protections for Americans with pre-existing conditions, the Supreme Court’s decision to hear the case is a stark reminder of President Trump’s determination to end those protections,” Senate Democratic leader Chuck Schumer of New York said in an emailed statement.

Texas Attorney General Ken Paxton said in a statement that the appeals court “correctly applied existing U.S. Supreme Court precedent when they ruled that the individual mandate itself was unconstitutional. Without the individual mandate, the entire law becomes unsupportable.”

The Justice Department didn’t immediately respond to a request for comment on the decision to hear the case.

All five justices who voted to uphold the law in 2012 -- Roberts and Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan -- remain on the court. Roberts switched sides in that case after voting to strike down the individual mandate when the justices took their initial private vote, according to news reports.

The 2012 challenge was “leaps and bounds stronger” than the latest one, said Nicholas Bagley, a University of Michigan law professor who supports the law’s validity and has written extensively about the cases.

‘Distinct’ Issues

“It’s extremely difficult to see how a chief justice who voted to sustain a law in the face of that challenge could turn around and vote to strike it down,” Bagley said. But the cases “present distinct legal issues, and you never know.”

The Trump administration has repeatedly changed its stance on what beyond the individual mandate should be thrown out. The Justice Department originally said that only a few other provisions -- including the protections for pre-existing conditions -- needed to be invalidated. The administration then shifted course and said the entire law should be voided.

The administration then changed positions a second time. The Justice Department told the appeals court the judgment should apply only in the 18 states challenging the law and cover just those provisions that “actually injure” those states. The administration’s brief pointed to anti-fraud provisions in the law as items that probably could be salvaged.

The case the court will hear is California v. Texas, 19-840.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Joe Sobczyk at jsobczyk@bloomberg.net

Laurie Asséo, Anna Edgerton

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