Obamacare on Trial: The New Court Case & What It Portends

Last month, a U.S. District Court Judge ruled that the Affordable Care Act, aka Obamacare, is unconstitutional—not just the individual mandate but the whole bloody law. But the latest legal battle over Obamacare is just beginning. Here’s a rundown of where things stand and where they’re likely to go.

Texas v. United States

Wait a minute. Didn’t the Supreme Court already say that Obamacare is constitutional? In fact, it did, about six years ago in a case called NFIB v. Sebelius. But the ruling was based on the mandate coupled with the penalty for not having health insurance, which the Court found to be a lawful exercise of the U.S. Congress’s constitutional taxing powers.

The problem is that the penalty is now gone. Upon taking control of Congress, the Republicans cut the penalty amount to $0, effective in 2019. And with the penalty eliminated, the Sebelius justification of Obamacare as a constitutional federal tax no longer pertains. At least that’s what the Republic governors bringing the new case contend.

And the judge in that new case, Texas v. United States, agreed. But that’s not all. Reasoning that the mandate can’t be severed from the rest of the law, the Judge Reed O’Connor found the entire Obamacare law unconstitutional.  

The Stay: Repeal Put on Ice  

Shocking as it was, the ruling was just the opening salvo. On December 30, Judge O’Connor issued an order staying his own ruling. Translation: The ruling can’t take effect unless and until the federal Appeals Court (or perhaps the Supreme Court) upholds it.

But to the extent the stay represents a capitulation, Judge O’Connor didn’t go quietly, issuing a 30-page opinion (as opposed to the one or two pages stay rulings normally run) defending his opinion and the right of Republican states to bring the case.

So, Now What?

Next up is an appeal with the Court of Appeal for the Fifth Circuit, among the country’s most conservative. But even if the Fifth Circuit upholds the ruling, the case will go to the U.S. Supreme Court. All of this will take at least a year. And in that period, Obamacare will remain valid law.

After that, it’s anybody’s guess. Even though the Court is veering right, this case raises important constitutional issues that go beyond partisan politics, such as the question of whether a group of states can bring a case challenging the constitutionality of a federal law they don’t like.

If the Supreme Court does affirm the ruling, even Republicans admit that all heck is going to break loose in the insurance markets. The Trump Administration has come out in support of the ruling and is unlikely to intervene in the appeal on the side of the Democrats. However, Obamacare repeal—or merely the realistic threat of it—will spur Congress to come up with a substitute system. The substitute will have to be created on an urgent basis and might, gasp, require bipartisan support.

Stay tuned. Things are about to get interesting.   

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This article originally appeared in G2 Intelligence, National Intelligence Report, Feb. 2019

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