Allyson Pettus is a 2019 Judge K.K. Legett Fellow at Washington Legal Foundation. She will be completing a dual MPA/JD degree this fall at the Texas Tech University School of Law.
“If you like your healthcare plan, you can keep it” was the promise made to millions of Americans when Congress passed the Patient Protection and Affordable Care Act (“ACA”) in 2010. Sounded promising enough. But, the ACA also imposed a burden on some Americans, forcing those who chose not to have health insurance to purchase it or pay a penalty (a.k.a. the Individual Mandate). 26 U.S.C. § 5000A. In 2017 Congress passed the Tax Cuts and Jobs Act (“TCJA”), reducing to zero the fine for failing to purchase insurance. That action essentially rendered the Individual Mandate portion of the ACA unenforceable. Whether the TCJA put an end to the entire ACA is now being fought in federal court, a battle discussed below.
A 2010 lawsuit first called the ACA’s constitutionality into question. One question that arose in this legal challenge was whether the Constitution authorized Congress to impose the penalty that enforced the Individual Mandate. In 2012, the U.S. Supreme Court held in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012), that the Individual Mandate constituted a tax that Congress had the authority to impose.
In 2018, another lawsuit questioned the ACA’s constitutionality. The cast of combatants in Texas v. United States, 352 F.Supp.3d 665 (N.D. Tex. 2018) is both interesting and complex. The federal defendants consist of the United States, the Department of Health and Human Services and its Secretary, and the Internal Revenue Service and its Acting Commissioner. In addition to the federal defendants, sixteen States and the District of Columbia intervened as defendants in the matter. The plaintiffs were two individuals and eighteen States. During the appeals process, when it became apparent that the Department of Justice would not be defending the ACA on behalf of the U.S., the U.S. House of Representatives submitted a Motion to Intervene and join with the federal defendants.
In the trial court, the plaintiffs argued that when the TCJA eliminated the penalty for those not complying with the Individual Mandate, that part of the law was no longer a “tax,” and because Congress lacks the authority to impose a penalty, the mandate became unconstitutional. The plaintiffs also argued that without the Individual Mandate, which cannot be severed from the rest of the law, the entire ACA collapsed upon itself and was unconstitutional. The defendants argued that the Individual Mandate was severable from the entirety of the ACA. A Northern District of Texas judge agreed with the plaintiffs and held that the Individual Mandate is unconstitutional and inseverable from the ACA.
The defendants appealed the district court’s ruling to the U.S. Court of Appeals for the Fifth Circuit. During oral argument, held on Tuesday, July 9, 2019, a three-judge panel with Judges Carolyn Dineen King, Jennifer Walker Elrod, and Kurt D. Engelhardt, verified that several threshold issues of jurisdiction would play a role in the case’s ultimate outcome.
For a plaintiff to have standing, it must suffer an injury caused by the defendant’s acts or omissions that the court can redress with a favorable judgment. The defendants argue in the Fifth Circuit that because the Individual Mandate is no longer in effect, the plaintiffs have not suffered a redressable injury and thus lack standing. However, the state plaintiffs argue a classic pocketbook injury and the individual plaintiffs claim injury from having to apply for health insurance, even if the penalty is zero.
The attorney for the intervenor defendants indicated during oral argument that no party possesses standing to bring the issue of the Individual Mandate into the court system because currently there are no negative legal consequences for failing to purchase health insurance. Yet, Judge Engelhardt stated that not allowing court proceedings over such an issue was resolved over two hundred years ago during a war with our neighbors across the Atlantic. The injury suffered, the plaintiffs argue, occurred from having to comply with the ACA in its entirety, not simply the Individual Mandate.
Non-Justiciable Political Question
The Fifth Circuit panel also questioned during oral argument whether the ongoing battle over the ACA should be fought not in the courts but in the legislature, and is thus a non-justiciable political question. Judge Engelhardt stated during oral argument; “Why does Congress want the Article III Judiciary to become the taxidermist for every legisla[tion]… Congress achieves?”
One party that was noticeably absent from the discussion of Congressional intent during oral arguments was the United States Senate. Judge Engelhardt stated, the Senate is the “eight-hundred pound gorilla that is not in the room.” Unlike the House, the Senate chose not to intervene in the ACA challenge. That legislative body’s views, Judge Engelhardt seemed to intimate, are quite relevant, given that the Senate, along with the House of Representatives, not only voted to pass the ACA in 2010 but also voted to pass the TCJA.
The ACA’s status remains up in the air at a time when health insurance seems to be part of every election debate, and closely connected issues—such as the affordability of healthcare—are front and center on the Executive Branch’s policy agenda. Whether it should be in the hands of a three-judge panel of the Fifth Circuit, or be fought out in Congress is, ironically, up to that three-judge panel. Rather than rule on the merits of the plaintiffs’ claim, the panel could hold that the courts lack jurisdiction due to lack of Article III standing or because, for prudential reasons, the law’s fate is a non-justiciable political question.
Now, it is a waiting game for the Fifth Circuit’s holding. Regardless of its decision, the constitutionality of the ACA will continue to be of utmost importance for millions of Americans. Americans will have to wait and see if this action will accumulate in the end of the ACA as a whole or if the battle has just begun.