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OPINION | ROBERT STEINBUCH: Fate uncertain

RBG passing clouds ACA’s future

Obamacare, formally known as the Affordable Care Act (ACA), is again before the Supreme Court. The case, scheduled to be heard the week after the presidential election, could determine whether the ACA is struck down entirely. With Justice Ruth Bader Ginsburg's passing, Obamacare's fate is even more uncertain.

The ACA contained an individual mandate that basically required every citizen to purchase a certain level of health insurance. A separate provision said if you don't, you will be assessed a penalty.

The first ACA case before the Supreme Court dealt with whether the federal government could, pursuant to the Constitution, mandate the purchase of insurance (the "mandate") through that penalty clause. The Obama administration argued that the mandate was authorized by the commerce clause and the government's taxing authority. The court said the interstate commerce clause of the Constitution was not a valid constitutional basis for the mandate. (Incidentally, I argued this in a debate at the Clinton School when this position was claimed by many as a fringe. It's not so fringe now!)

But the court ruled that the penalty provision can plausibly be read as a tax (even though the Obama administration originally said it wasn't a tax), as a constitutional savings provision. As such, the Supreme Court upheld the penalty provision, and Obamacare in general.

In 2017, Trump signed a tax bill that zeroed out the tax penalty. With that, Texas and others sued, arguing that because the mandate had nothing mandatory, it had to be held unconstitutional.

The federal trial judge hearing the case, Reed O'Connor, who I once worked with on the U.S. Senate Judiciary Committee, agreed and declared the mandate unconstitutional. Since the mandate fell, the question became what happens to the rest of the law: Is all of Obamacare invalid, or do other provisions, including the federal insurance program, survive?

Under existing precedent, the answer to that question is based on what Congress "intended." This is determined first by examining whether the law has a "severability clause." Obamacare has no such clause relating to the mandate.

Case law then instructs that if there is no relevant severability clause, the judge must answer two additional questions: First, can the law continue to operate without the now invalid clause? If the answer is no, then the whole statute falls. If the answer is yes, then the judge must address the second question: would the Congress that enacted the law have intended the law to go forward without the now invalid clause?

O'Connor answered the first question as "yes"--i.e., the law can still operate without the mandate. Such a holding crushes the claim that O'Connor was driven by politics, as he could have ended the analysis here with a conclusion that the law couldn't perform without the mandate.

O'Connor then ruled that the Congress that enacted the law in 2010 would not have intended the law to go forward without the now inoperable penalty clause. As proof, he pointed first to the Congressional findings in the ACA itself, which said the individual mandate is essential to the whole law passing. O'Connor also referenced the original Obamacare case, which supported this interpretation.

Those criticizing O'Connor lament that he looked to the Congress that passed Obamacare to determine the "intent." These critics say that he should've looked at the 2017 Congress that passed the tax law zeroing out the penalty. Since that Congress did not repeal all of the ACA, the argument goes, the remainder should survive.

However, the change to the ACA from the 2017 Congress was enacted pursuant to a "budget reconciliation" process. As such, the 2017 Congress could not do anything more substantive than taxes, so no further intent can be divined when no alternative was legally possible. Indeed, if the 2017 Congress' intent could be deduced from the tax provision, one would have to consider that it did not repeal the ACA's original legislative findings that said the individual mandate is essential to the whole law passing. Moreover, the severability case law looks to the Congress that passed the law that's being challenged, which is what O'Connor did.

On appeal, the Fifth Circuit Court didn't agree or disagree with O'Connor's decision to evaluate the intent only of the 2010 Congress. Rather, it remanded the case back to him to (1) explain further why he didn't also consider the 2017 Congress' intent and (2) evaluate whether the law required him to consider each remaining provision in the ACA separately to see whether they're impacted by the removal of the tax--rather than tossing out the whole law. Before the appellate court sent the case back to O'Connor, however, the Supreme Court said it would hear it.

With only eight justices sitting, given Ruth Bader Ginsburg's passing, the decision could easily be split among the remaining even number. That would affirm the Fifth Circuit, which would give O'Connor a second bite at the case. A majority decision could do the same, strike the law entirely, declare that the tax has no effect on the remainder of the law, or virtually anything in between.

So, the presence of a ninth justice the week after the election could be critical to the fate of Obamacare. Of course, the Supreme Court could always postpone the hearing or rehear the case later if it needs a tie-splitting vote.

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Robert Steinbuch, professor of law at the Bowen Law School, is co-author of The Arkansas Freedom of Information Act, now in its sixth edition. His opinions are his own.

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