Health-care advocates expressed significant optimism after the Nov. 10 U.S. Supreme Court oral argument in California v. Texas that the Affordable Care Act may survive yet another legal challenge. Several justices—including members of the court’s conservative majority—indicated that the court may be leaning toward preserving most of the key pieces of the landmark legislation.
While the justices’ comments are not always a reliable barometer of the court’s eventual decision, abrupt disruption to the ACA appears less likely than many originally thought.
Yet how the court reaches its decision may matter almost as much as what the court decides. The contours of the court’s opinion will offer an important guide to the legal and political moves that will shape the ACA’s future.
First Clue: The Issue of Standing
The first clue will come in how the Supreme Court deals with the crucial procedural issue of “standing"—here, whether the plaintiffs suffered sufficient harm from the ACA to be entitled even to sue at all.
Without standing, the court would not reach the substantive questions of whether the individual mandate remains constitutional (now that it no longer carries a tax penalty) or whether, even if unconstitutional, the mandate is “severable” from the rest of the ACA.
The ACA challengers offered a variety of standing theories: that individuals were harmed by the fact the mandate to purchase insurance (even though unenforceable) was still on the books; that states suffered a “pocketbook injury” when forced to spend money covering Medicaid enrollees, or on additional ACA paperwork; and from the Department of Justice, the novel theory that anyone injured by any provision of the ACA could also challenge the mandate, because the mandate is not “severable” from the rest of the law.
The court spent more time in the oral argument discussing standing than most observers expected. Justices on both sides of the ideological spectrum expressed skepticism about each of these theories, particularly the one from the DOJ. This focus on standing suggests that the entire ACA (including the individual mandate) could potentially survive.
A decision on standing, however, could provide future plaintiffs with a blueprint for simply refiling while avoiding those procedural pitfalls. While the prospect of rehearing the same case in just a year or two may incentivize the court to reach the merits this time around, there could also be incentives for the Supreme Court to kick the can down the road (such as providing the new Congress and President-elect Biden the opportunity to craft a political solution that moots future challenges).
Second Clue: Doctrine of Severability
The second clue will come in how the court handles the arcane legal doctrine of “severability.”
Prior to oral argument, most legal analysts acknowledged that the individual mandate would likely be found unconstitutional by the conservative majority, but there was significant uncertainty as to whether an unconstitutional mandate could be “severed,” allowing the rest of the ACA to survive. Many observers thought the ACA’s insurance subsidies and protections for those with preexisting conditions were particularly vulnerable to being found “inseverable” from the individual mandate.
After oral argument, there appears to be at least five votes for severing the individual mandate from the rest of the ACA. The court spent very little time discussing which other ACA provisions might also need to fall with the mandate, suggesting that an outcome striking down significant portions of the ACA may not be as likely as was initially thought.
In addition to the liberal justices and Chief Justice John Roberts, Justice Brett Kavanaugh stated that it seemed “fairly clear that the proper remedy would be to sever the mandate provision and leave the rest of the Act in place, the provisions regarding preexisting conditions and the rest.” Such a decision would leave the ACA largely unchanged, giving the remainder of the law surer long-term legal footing.
Third Clue: Practical Aspects of Striking Down All or Part of the Law
The third clue will be how, if the court does strike down all or part of the ACA, it addresses the practical implications of such a decision.
At argument, while Texas Solicitor General Kyle Hawkins encouraged that the ACA be struck down in full, he also urged the court to stay such a decision “to allow the states and political branches of the federal government an opportunity to accommodate [the] reliance interests” of the millions of patients and providers on those provisions.
His proposal not only offers the court an avenue to avoid abrupt disruption in health-care delivery if it agrees with the challengers, but potentially gives the federal government time to cure the ACA’s legal deficiencies while maintaining other key provisions of the law.
After the oral argument, supporters of the ACA have reason to be optimistic that the damage to the ACA may be limited to the largely symbolic elimination of the individual mandate, a provision Congress rendered toothless by zeroing out the tax penalty. But regardless of the outcome, how the court reaches its decision may reveal whether California v. Texas was the final legal battle over the ACA—or just the most recent one.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Tad Heuer is a partner at Foley Hoag LLP. His administrative law practice focuses on advising both private and public sector clients in two main areas: appellate litigation on complex regulatory matters, and the development of government strategies at the federal, state, and local levels.
Andrew M London is an associate in Foley Hoag LLP’s Administrative Law Department. He concentrates his practice on litigation arising out of federal and state health care regulation and other public law matters.