Bloomberg Law
April 6, 2023, 8:45 AM

New Obamacare Fight Gives High Court Chance to Cut Agency Power

Lydia Wheeler
Lydia Wheeler
Senior Reporter

Welcome back to Opening Argument, a reported column where I dig into interesting legal controversies and questions that have divided circuit courts. Today: a look at yet another Obamacare challenge headed to the high court.

When the US Supreme Court rejected a Republican attack on Barack Obama’s signature health-care law in 2021, Justice Samuel Alito called it the “third installment” in the court’s “epic Affordable Care Act trilogy.”

But another sequel may be coming soon.

The latest challenge is headed to the US Court of Appeals for Fifth Circuit after a federal judge in Texas ruled against key provisions of its free preventive care mandate. While the case doesn’t threaten to kill the law this time, it could wipe out its most beloved part and limit Congress’ ability to hand off its legislative authority to federal agencies.

The dispute out of the US District Court for the Northern District of Texas raises an argument in attacking the ACA that the majority of the high court’s conservative wing has already signaled a willingness to hear, said George Washington University Law School professor Sonia Suter.

Challengers argued the ACA’s preventive services mandate unconstitutionally gave three bodies the legislative power to decide what’s covered without any standards or an intelligible principle to guide them.

US District Judge Reed O’Connor, sitting in Fort Worth, said he couldn’t agree with their argument. Even though Congress’ guidance may be minimal, the authority granted to the agencies, which oversee the bodies making the recommendations, falls within the constitutional parameters outlined by the Fifth Circuit and the Supreme Court, he said.

The Supreme Court “might well decide—perhaps soon—to reexamine or revive the nondelegation doctrine,” O’Connor said. “But we are not supposed to read tea leaves to predict where it might end up.”

Instead, O’Connor tossed coverage requirements March 30 for services recommended by one independent panel of experts, the US Preventive Services Task Force, after ruling in September that its members had been unconstitutionally appointed.

O’Connor’s decision was still a big deal since services on the list included no-cost coverage of drugs used to prevent HIV, colonoscopies for adults over 45, screenings for hepatitis C, and mammograms for women 50 to 74.

It was a narrow ruling compared to what the challengers had asked for. That’s why University of Pennsylvania Carey Law School professor Allison Hoffman said they’re likely to appeal.

The challengers wanted coverage requirements for preventive services recommended by the Advisory Committee on Immunization Practices and the Health Resources and Services Administration tossed too.

“The Fifth Circuit could find more of those arguments compelling,” Hoffman said. “The Supreme Court right now has a composition that could also result in a worse ruling for the ACA either by saying more of those bodies weren’t acting appropriately under the Appointments Clause or they were in violation of the non-delegation doctrine as well.”

The Justice Department has already filed a notice of its plans to appeal.

Obamacare critic Josh Blackman thinks the whole case is being overblown.

“There’s a cottage industry that exists to panic people about Obamacare cases,” said the South Texas College of Law Houston professor.

Blackman said it’s unlikely the Fifth Circuit will go further than O’Connor did.

It’s not clear if the case will reach the Supreme Court, but if it does, there seems to be support for reining in the administrative state.

In 2019, Chief Justice John Roberts and Justice Clarence Thomas joined Justice Neil Gorsuch’s dissent from the court’s decision in Gundy v. United States. In that case, the court rejected an argument that Congress had delegated too much power to the attorney general to decide the scope of sex offender registration requirements.

Disagreeing with the majority, Gorsuch argued for reviving the non-delegation doctrine. Only twice has the court found the delegation of power in a statute excessive.

Justice Brett Kavanaugh also signaled a willingness to revisit the non-delegation doctrine when the court decided not to hear Paul v. United States in 2019, which raised similar questions Gundy had. Kavanaugh said Gorsuch’s analysis of the Constitution’s non-delegation doctrine in Gundy “may warrant further consideration in future cases.”

Justice Samuel Alito also hinted he’s willing to revisit the non-delegation doctrine when the court declined to review of a case last year that dealt with an ACA tax on Medicaid managed care companies. In an statement with that denial, Alito said the statutory scheme at issue “points up the need to clarify the private non-delegation doctrine in an appropriate future case.”

If the Supreme Court gets its hands on the non-delegation doctrine and goes as far with it as Suter predicts, she said all kinds of health laws that give agencies rulemaking power could be at risk. This could include those that give the Food and Drug Administration authority to approve certain drugs.

“It affects the delivery of health care more broadly not just the ACA and then, of course, it goes beyond that to all other efforts to give agencies the power to regulate,” she said.

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To contact the reporter on this story: Lydia Wheeler in Washington at

To contact the editors responsible for this story: Seth Stern at; John Crawley at

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