The Affordable Care Act Challenge and the Senate Runoff Elections in Georgia

Posted in: Constitutional Law

The Affordable Care Act (ACA) makes its third trip to the Supreme Court today under the caption California v. Texas, but the state most implicated is best known for neither movie studios nor rodeos but peaches. Last week’s election failed to produce a majority vote for any candidate for either of Georgia’s two U.S. Senate seats. Under state law, that failure triggers January 5 runoffs for each seat. When Alaska and North Carolina finish counting ballots, Republicans will likely hold a 50-48 advantage in the Senate. If Democrats can somehow win both Georgia runoffs, they will gain control of the chamber because Vice President-elect Harris will be able to break ties. And having run hard on the Affordable Care Act in both 2018 and 2020, one can be sure Democrats will once again highlight health care in the next eight weeks. On the other side, we can expect substantial pushback once Republican donors redirect their largesse away from the incumbent Toddler-in-Chief’s tantrums disguised as frivolous lawsuits and towards supporting their candidates in Georgia.

How will the SCOTUS case affect the Georgia Senate runoffs? No one knows for sure, because the legal merits and politics will interact chaotically, like the weather. But to quote a Nobel Laureate, you don’t need a weatherman to know which way the wind blows. Accordingly, we can separate the plausible scenarios from the hot air.

The Challenge Is Preposterous

Regular Verdict readers will have learned from an outstanding four-part series by Vikram Amar, Evan Caminker, and Jason Mazzone that the challenge to the ACA the Court hears today rests on a truly preposterous chain of reasoning.

In 2010, Congress enacted the ACA, a complex law with some interrelated and many unrelated parts. In 2012, the Supreme Court rejected a constitutional challenge to one provision of the ACA—the so-called individual mandate for most people who did not otherwise have health insurance to purchase a policy. (The Court agreed with a challenge to a different part of the law, requiring states accepting federal funds to expand Medicaid, but that aspect of the law does not figure in the current case.) Five Justices in 2012 thought that Congress lacked the authority to impose a purchase mandate under its power to regulate interstate commerce, but a different five Justices (with Chief Justice Roberts providing the swing vote) said that the mandate was nonetheless valid as a conditional exercise of the power to tax. Congress had given people a permissible choice: purchase health insurance or pay more in taxes.

Republicans were livid but could do little to stop the ACA until after the 2016 election. After some initial missteps, they acted. Although Republicans held the presidency and both houses of Congress in 2017, under Senate rules they lacked the votes to repeal the ACA entirely. Instead, they reset the tax owed by anyone who failed to purchase health insurance to “$0” and widely boasted that they had thereby “repealed the mandate.”

Shortly thereafter, audacious lawyers for Texas and allied plaintiffs claimed that by eliminating any penalty for failure to obtain health insurance, Congress had somehow made the mandate more onerous. If the mandate was only valid as a tax, they said, then zeroing out the tax rendered it invalid. Thus, the mandate and the entire ACA are invalid, they contended. Remarkably, lower court judges agreed with them.

Nonetheless, a fair assessment of the issues leads to the conclusion that the plaintiffs should lose this case for at least three independent reasons.

(1) Neither the individual plaintiff nor the state of Texas suffers any injury giving rise to legal standing as a consequence of a law that instructs individuals who do not obtain health insurance to pay a tax of $0. To even get to the merits, the Justices will have to find that paying nothing is somehow injurious.

(2) When Congress in 2017 lowered the tax penalty to zero dollars, it did not convert what had previously been a permissible tax into an impermissible mandate. As Martin Lederman and I argue in an amicus brief, the key to the 2012 ruling was that Congress gave people a choice: (a) obtain insurance or (b) pay extra money in taxes. The post-2017 version of the ACA also gives people a choice, indeed a much less coercive choice: (a) obtain insurance or (b) don’t.

The choice between doing something and doing nothing is not a mandate in any meaningful sense. That’s why Republicans in Congress and President Trump have repeatedly and accurately described the 2017 legislation as eliminating the mandate. To find that there is a mandate, the Court will need to conclude that Congress and the President were either lying to everyone about what the law did or that they somehow accidentally created a mandate even though they were fully on notice that a pure mandate would be unconstitutional according to five Justices in the 2012 case.

(3) Suppose that the Justices nonetheless conclude that despite all evidence to the contrary, the current version of the ACA is a mandate and that even a mandate backed by no legal sanction whatsoever poses an unconstitutional burden. So what? In any other context, we would say that there is no practical difference between a nonexistent law and an unconstitutional law. Indeed, the whole theory of judicial review rests on the premise that unconstitutional laws are void, that is, nonexistent. The case is an esoteric exercise.

Not so, say Texas and the other Republican challengers to the ACA, backed by the Trump administration. If the mandate is held invalid, the entirety of the law goes with it, they contend. The provisions that would be thrown away with the bathwater if they prevail include the ACA’s much-beloved prohibition on insurance companies denying coverage to individuals with pre-existing conditions and the guarantee that parents can keep their adult children on their health insurance plans until they turn 26. These other provisions are not severable from the mandate, the plaintiffs say. Why not? Because the Congress that enacted the ACA in 2010 thought that the mandate was essential to ensure robust insurance markets, so that without the mandate the whole law unravels.

Upon finding one provision of a law invalid, a court asks whether the legislature would have enacted the rest of the law without it. Some statutes contain severability clauses or non-severability clauses that answer the question directly, but others, like the ACA, are silent on the matter. A severability determination in such circumstances requires a counterfactual inquiry.

One might have difficulty divining the hypothetical intent of the Congress that enacted the ACA in 2010 with respect to a question it did not then face: whether it would enact the law without a mandate. But the relevant intent here is the intent of the 2017 Congress that zeroed out the tax penalty and thus eliminated the mandate at least as a practical matter. And we know whether that Congress thought it desirable to retain an ACA with no enforceable mandate, because that’s exactly what Congress created in 2017 when it repealed any enforcement mechanism for the mandate while leaving the rest of the law intact.

Stranger Things Have Happened

If the current challenge to the ACA is so insubstantial, why did Democratic senators questioning then-Judge Amy Coney Barrett last month focus so much attention on the ACA? Why did they act as though her confirmation would bring the ACA crashing down when the legal challenge to the law is so weak that it will almost surely fail in the Supreme Court? Were Democrats simply playing for political advantage by using the occasion of a Supreme Court confirmation hearing to turn attention to an issue on which they perceive a popular edge?

It would be naïve or disingenuous to deny that Democrats were motivated by the politics around the ACA, but it would nonetheless be inaccurate to describe their fears for the ACA as unfounded. Yes, legal scholars like Professor Lederman and me and many others—including some who thought the ACA invalid on the grounds offered in 2012—believe very strongly that the current challenge should fail. However, that is no guarantee that it will fail. After all, many scholars—including me—also thought that Congress pretty clearly had the power to impose the mandate under the Commerce Clause; yet five Justices in 2012 said otherwise.

One need not think that Supreme Court Justices are simply politicians in robes to recognize that people who do not share all of your views or values will sometimes reach very different—even startling—conclusions. As a court of last resort, the Supreme Court can change legal reality by its decisions. Like the Democratic senators and voters who worried that Justice Barrett’s confirmation would spell doom for the ACA, I certainly hope she will join a majority of the Court to reject what we regard as an extraordinarily weak case, but that outcome is hardly foreordained.

The Georgia Senate Races

How will the ACA case play in the upcoming Georgia runoff elections? If the races are close, it could be decisive. Will the races be close? Although pundits have noted that Republicans have historically done better than Democrats in runoff elections in Georgia, it is not clear how relevant that history remains, given changing voting patterns. Prior to President-elect Biden’s very narrow apparent victory over President Trump in Georgia, the state had voted for the Republican in each of the last six presidential elections. The shift could herald a broader trend.

Meanwhile, the results of the first round of Senate elections in Georgia may be hard to read. Incumbent Republican David Perdue received a plurality of votes, but his margin over Democratic challenger Jon Ossoff was less than two percentage points. In the special election, Democratic challenger Raphael Warnock won a plurality, but Republican voters were split between incumbent Kelly Loeffler and Doug Collins, who will not take part in the runoff.

There is little doubt that Democrats will use the threat posed by the latest challenge to the ACA to motivate their voters in Georgia. They will argue that control of the Senate is crucial to enacting President-elect Biden’s proposed expansion of the ACA and necessary as a hedge against Supreme Court invalidation of the law. If the Court invalidates the law, a Democratic Senate could pass a bill reinstating the tax penalty and thus rendering the law constitutional again.

To be sure, even if Congress and the new administration were to respond in that way, there is some risk that the Court could overrule the 2012 decision and say that the mandate cannot even be imposed under the taxing power. After all, the 2012 ruling upholding the law was 5-4, and one of the five was the late Justice Ruth Bader Ginsburg.

Whatever the case’s ultimate outcome, at the very least, today’s oral argument keeps the spotlight on the ACA. Absent a dramatic and highly unusual development—like a Supreme Court decision rejecting the challenge in the next few weeks—that should help the Democratic candidates in Georgia’s runoff elections. Whether it helps enough for them to win remains to be seen.

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