During an October 2016 speech, President Trump made this pledge regarding the Affordable Care Act, “My first day in office, I am going to ask Congress to put a bill on my desk getting rid of this disastrous law and replacing it with reforms that expand choice, freedom, affordability.”
While Congress failed to act, a twenty-state coalition led by Texas now provides President Trump the same opportunity to eliminate ObamaCare without waiting for Congress.
{mosads}Last month, these twenty states filed the third installment in the trilogy of ObamaCare litigation. Whereas NFIB v. Sebelius and King v. Burwell resulted in the United Supreme Court contorting the law to uphold the ACA, this new proceeding — Texas v. United States — uses the Supreme Court’s holding in NFIB and the legislative intent of the ACA to show it as now unconstitutional.
The linchpin of the ACA is and has always been the individual mandate, the requirement that most Americans purchase health insurance and, separately, a tax penalty for most who fail to comply. Under Congress’ own findings, the ACA’s provisions do not function rationally without the individual mandate. Congress found this requirement as “essential to creating effective health insurance markets,” and that absence of the individual mandate “requirement would undercut Federal regulation of the health insurance market.”
In the NFIB case, the Supreme Court intertwined the individual mandate with the basis for upholding the constitutionality of the ACA. Whereas a majority of the justices held that the individual mandate exceeded Congress’ power under the Commerce and Necessary and Proper Clauses, a different majority held that it was “fairly possible” to read the individual mandate plus its tax penalty as a single, unified tax provision, and thus could be supported under Congress’ tax power — i.e., this is how the Supreme Court held the ACA constitutional.
In reaching this end, the majority concluded that Congress’ taxing-power interpretations was only “fairly possible” because the provision at issue raised “at least some revenue for the Government.” At least, it used to.
When Congress passed the Tax Cuts and Jobs Act at the end of 2017, one of the provisions set the individual mandate penalty at $0.00, but did not repeal the statutory language. In doing so, the individual mandate penalty ceased to generate any revenue for the federal government, the key component that the Supreme Court relied upon to find the mandate as an exercise of taxation powers. And like a house of cards, the ACA is poised to come tumbling down.
Yet, without further action, the house of cards still currently stands. The Title I federal insurance regulations remain, which continue to drive up insurance premiums. As Congress seems poised to inject more taxpayer funds into the ACA black hole through bailouts of the health insurance companies, states led by Texas continue to pursue the proper path that Washington, DC, won’t — dismantling ObamaCare.
The Texas-led, twenty-state coalition has now pulled the load bearing card with the filing of this suit. In their suit, the states rely upon the rationale of the Supreme Court itself in NFIB in arguing that the individual mandate penalty no longer generates revenue due to the Tax Cuts and Jobs Act, and, therefore, no longer performs as an exercise of taxation powers. And, as the legislative history of the ACA inextricably ties the individual mandate to the remainder of the ACA provisions, severability is not an option.
The next step rests with the Trump administration. In February 2015, President Trump stated, “We’re going to absolutely terminate and repeal — we’re going to repeal ‘ObamaCare.’ Has to be repealed.” This administration has the opportunity to do so by simply agreeing with the Texas-led lawsuit and declining to defend the ACA. In doing so, this administration will not be the cause of the downfall of the ACA, but merely allow this crumbling statute to collapse under its own weight. Like a house of cards.
Robert Henneke (@RobHenneke) is the general counsel and director of the Center for the American Future at the Texas Public Policy Foundation.