What to Know as ACA Heads to Supreme Court — Again

Lambert here: The ACA a victim of its own complexity. Imagine the Supreme Court was giving Medicare for All an up-or-down vote. They’d blink, just as Roberts blinked in National Federation of Independent Business v. Sebelius, and FDR’s Court blinked with its “jurisprudential shift” to supporting New Deal legislation after FDR won in 1932 and threatened them with his court-packing plan. Instead we’re fighting over which parts of a Rube Goldberg device to dismantle, or not.

By Julie Rovner, Kaiser Health News. Originally published at Kaiser Health News.

The Supreme Court on Tuesday will hear oral arguments in a case that, for the third time in eight years, could result in the justices striking down the Affordable Care Act.

The case, California v. Texas, is the result of a change to the health law made by Congress in 2017. As part of a major tax bill, Congress reduced to zero the penalty for not having health insurance. But it was that penalty — a tax — that the high court ruled made the law constitutional in a 2012 decision, argues a group of Republican state attorneys general. Without the tax, they say in their suit, the rest of the law must fall, too.

After originally contending that the entire law should not be struck down when the suit was filed in 2018, the Trump administration changed course in 2019 and joined the GOP officials who brought the case.

Here are some key questions and answers about the case:

What Are the Possibilities for How the Court Could Rule?

There is a long list of ways this could play out.

The justices could declare the entire law unconstitutional — which is what a federal district judge in Texas ruled in December 2018. But legal experts say that’s not the most likely outcome of this case.

First, the court may avoid deciding the case on its merits entirely, by ruling that the plaintiffs do not have “standing” to sue. The central issue in the case is whether the requirement in the law to have insurance — which remains even though Congress eliminated the penalty or tax — is constitutional. But states are not subject to the so-called individual mandate, so some analysts suggest the Republican officials have no standing. In addition, questions have been raised about the individual plaintiffs in the case, two consultants from Texas who argue that they felt compelled to buy insurance even without a possible penalty.

The court could also rule that by eliminating the penalty but not the rest of the mandate (which Congress could not do in that 2017 tax bill for procedural reasons), lawmakers “didn’t mean to coerce anyone to do anything, and so there’s no constitutional problem,” University of Michigan law professor Nicholas Bagley said in a recent webinar for the NIHCM Foundation, the Commonwealth Fund and the University of Southern California’s Center for Health Journalism.

Or, said Bagley, the court could rule that, without the tax, the requirement to have health insurance is unconstitutional, but the rest of the law is not. In that case, the justices might strike the mandate only, which would have basically no impact.

It gets more complicated if the court decides that, as the plaintiffs argue, the individual mandate language without the penalty is unconstitutional and so closely tied to other parts of the law that some of them must fall as well.

Even there the court has choices. One option would be, as the Trump administration originally argued, to strike down the mandate and just the pieces of the law most closely related to it — which happen to be the insurance protections for people with preexisting conditions, an extremely popular provision of the law. The two parts are connected because the original purpose of the mandate was to make sure enough healthy people sign up for insurance to offset the added costs to insurers of sicker people.

Another option, of course, would be for the court to follow the lead of the Texas judge and strike down the entire law.

While that’s not the most likely outcome, said Bagley, if it happens it could be “a hot mess” for the nation’s entire health care system. As just one example, he said, “every hospital is getting paid pursuant to changes made by the ACA. How do you even go about making payments if the thing that you are looking to guide what those payments ought to be is itself invalid?”

What Impact Will New Justice Amy Coney Barrett Have?

Perhaps a lot. Before the death of Justice Ruth Bader Ginsburg, most court observers thought the case was highly unlikely to result in the entire law being struck down. That’s because Chief Justice John Roberts voted to uphold the law in 2012, and again when it was challenged in a less sweeping way in 2015.

But with Barrett replacing Ginsburg, even if Roberts joined the court’s remaining three liberals they could still be outvoted by the other five conservatives. Barrett was coy about her views on the Affordable Care Act during her confirmation hearings in October. But she has written that she thinks Roberts was wrong to uphold the law in 2012.

Could a New President and Congress Make the Case Go Away?

Many have suggested that, if Joe Biden assumes the presidency, his Justice Department could simply drop the case. But the administration did not bring the case; the GOP state officials did. And while normally the Justice Department’s job is to defend existing laws in court, in this case the ACA is being defended by a group of Democratic state attorneys general. A new administration could change that position, but that’s not the same as dropping the case.

Congress, on the other hand, could easily make the case moot. It could add back even a nominal financial penalty for not having insurance. It could eliminate the mandate altogether, although that would require 60 votes in the Senate under current rules. Congress could also pass a “severability” provision, saying that, if any portion of the law is struck down, the rest should remain.

“The problem is not technical,” said Bagley. “It’s political.”

What Is the Timeline for a Decision? Could the Court Delay Implementation of Its Ruling?

The court usually hears oral arguments in a case months before it issues a decision. Unless the decision is unanimous or turns out to be very simple, Bagley said, he would expect to see an opinion “sometime in the spring.”

As to whether the court could find some or all of the law unconstitutional but delay when its decision takes effect, Bagley said that happened from time to time as recently as the 1970s. “That practice has been more or less abandoned,” he said, but in the case of a law so large, “you could imagine the Supreme Court using its discretion to say the decision wouldn’t take effect immediately.”

If the court does invalidate the entire ACA, Congress could act to fix things, but it’s unclear if it will be able to, especially if Republicans still control the Senate. If the justices strike the law, Bagley said, “I honestly think the likeliest outcome is that Congress runs around like a chicken with its head cut off, doesn’t come to a deal, and we’re back to where we were before 2010,” when the ACA passed.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. wild west

    can somebody smart explain to me why we are required to have a car insurance, but not a health insurance. one could argue that we need a car insurance to protect others from damages that we can make, but if one doesn’t have a health insurance and an emergency room have to admit a person regardless if a person has a health insurance or not somebody will incur the cost and somebody will one way or another pay for that? Maybe will be paid by the people who have a health insurance somehow.

    1. shinola

      Personal auto liability insurance is a state requirement (coverage & limits vary widely state by state). IIRC, only interstate trucking has some federal requirements.

      1. Another Scott

        I’m not aware of any state that requires everyone to have auto insurance. They require all drivers to have insurance, but people who don’t drive, such as my brother, don’t have insurance.

        1. Ian Ollmann

          Everyone has health problems eventually.
          Not everyone drives.

          That said, I need to be reminded why the tax was there. I think it was to encourage another wealth transfer from young to old. The young pays too pay too much for insurance to help subsidize coverage for middle age buyers not yet on social security. I don’t know that we need /that/. There is a reasonable requirement for health insurance so that the individual doesn’t become a unreimbursed burden on the public health system.

    2. ewmayer

      IANAL, but I was always under the impression that the auto insurance requirement is tied to one’s use of public roads, as is obeying posted speed limits and such. The above article also omits another key thing, namely that Roberts et al in their 2012 deeming the law constitutional, disregarded the actual wording of the statute regarding the financial penalty for failure to sign up and buy an approved insurance plan, with some tortured reasoning to the effect that “well, the folks who wrote the statute clearly meant ‘tax’, not ‘penalty'”. The legal distinction is highly consequential, and not something which any lawyer or legislator fit to hold office would make by way of a “whoopsie”. Talk about legislating from the bench!

  2. Timh

    You are not required to have car insurance in the USA. You can post a bond showing financial resource to pay a claim against you.

    1. johnson

      You are also not required to operate a car (in theory; I realize reality is often different). Opting out of being alive is a much bigger burden than opting out of car ownership.

  3. Arizona Slim

    Just spitballing here, but what if the ACA was overturned?

    I mean, come on. It has never worked very well, it costs people way too much money for insurance they can’t afford to use, and, face it, the ACA has never been popular. Oh, did I mention that it also leaves millions of Americans without insurance?

    Could the demise of the ACA lead to Medicare for All by presidential executive order?

    1. Debra D.

      As I have followed Joe Biden’s position, he would veto Medicare for All should such a bill reach his desk. Therefore, I don’t see him issuing an Executive Order to implement it either.

      After all, Barack Obama, et al. made it possible for Joe Biden to be the Democratic Party’s nominee.

      1. Ian Ollmann

        He did endorse a ACA public option. I’m not familiar with the details on that, but I see no reason why this is could not be MFA in disguise. All that is missing is a public funding. But frankly, if you could enroll in a non-profit pay go insurance that got Medicare rates, it might be a pretty good deal.

    2. Big River Bandido

      In a word, no.

      Biden doesn’t want universal healthcare. The Democrats do not want it either. They are deaf to any cries for help that do not originate in the Hamptons.

      They made that crystal clear during the election.

    3. a different chris

      >Could the demise of the ACA lead to Medicare for All by presidential executive order?

      No, but I am quite sure the demise of the ACA would be strategically by far the best path we have to get to MfoA with real votes. I’m basing that on Churchill’s pretty unarguable assessment of a nation that “does the right thing after exhausting all other possibilities”.

      As an employed older white male with good insurance that’s easy for me to say, of course… but as AS says, the people that need at least some sort of coverage don’t seem to be getting it in any case.

    4. Phacops

      I would not expect M4A. But, perhaps if the ACA is eliminated, people may see more clearly just how the dems have sold them to the for-profit insurance and healthcare industry. I remain sanguine that the MSM will never allow such a discussion, just like they sold the expansion of coverage without a discussion about the practical uselessness of that expansion.

      I still have educated, but ignorant, friends who’s only answer is that more people are covered for healthcare. We won’t make inroads with such parrots.

      1. Glen

        But if expanding Medicaid to cover more people was the only good thing about ObamaCare, why not just give everybody Medicare? Would that be a maximization of the “good”?

        1. LarryMotuz

          Well, apart from accidents which impact upon health temporarily and/or permanently, health conditions change over time if only because of aging and contagious diseases. I would guess that the likelihood of chronic health disorders varies directly with age and inversely with level of income.

          To answer your question, everyone at some time will need medical care, and just about all women who wish to become mothers. Not all can afford that care out of the income they make. Insurance pools the risks across the entire population at risk of accidents or ill-health, and that is basically everyone. One can opt to be a driver or not. One cannot opt to be a human being bearing no health risks.

    5. Situation Normal

      I’m sympathetic to this sentiment and obviously M4A would, in every respect, be a superior alternative to the ACA. However, the requirement to provide insurance to people with preexisting conditions that the ACA introduced is an unqualified improvement over prior legislation. In that respect, if the law were struck down, Americans would be worse off than they were before.

      1. Knot Galt

        Just a thought. Why can’t the current ACA be more like the way the Interstate Highway System was built? Like Highways and their ROW’s, the heathcare industry would be governed by each of the states after initial investment by the Feds.

        The healthcare Insurance carriers act like monopolies anyway and for that reason need to be abolished.

    6. PeasantParty

      Agreed! I wish it would die a quick death. I have had to cough up $2,000.00 per month for the Spouse and Myself, with a deductible of $7 K for each of us!!!! It does not pay for lab work, or x-rays, or any diagnostics period. The only thing it covers until we are deathly ill is the office visit, minus our co-pay!!!! Those that were on Medicaid, and those that need the extra help for coverage could all be cared for instantly with Medicare 4 All. Especially, during a Pandemic, and our leaders couldn’t come up with aid for people to pay their insurance. What a joke the entire thing is, on Americans. It is not health care, and is DEFINITELY NOT affordable!

    7. darms

      Hey there, Arizona Slim, I know of at least two people who have purchased affordable & usable health insurance under the ACA. One of them is myself. Worse, I bought private health insurance pre-ACA & that was some over-priced useless garbage. Not sure where your info comes from, I however can produce receipts.

      (don’t get me wrong, Medicare-4-All is my choice. But the ACA was at least something)

    8. rd

      The big problem with American health care is it simply costs far too much. This is the 10,000 pound pink elephant sitting in the middle of the room. That is why health insurance is so expensive.The next most expensive country in the world, Switzerland, spends about 75% of what the US spends per capita on health care. Name one other thing that costs less money in Switzerland than it costs in the American Midwest.

      Most of the developed world is at about 50% to 60% of what the US spends per capita. Canada is in that range. Countries like Great Britain don’t have great healthcare simply because they spend substantially less than the average developed nation and are at less than 40% of what the US spends per capita. Better healthcare than the US for the typical person, and especially the bottom 20%, is achievable at about half the cost of US healthcare per capita.

      The most ironic thing of all is that the US is in the top tier of spending of public taxpayer money on healthcare per capita. Only Norway and Netherlands spend more public money on healthcare than the US. So the US is one of the most socialist countries in the world for public expenditures on healthcare, but gets very little for that massive expenditure: https://www.visualcapitalist.com/u-s-spends-public-money-healthcare-sweden-canada/

      The US healthcare system is designed to loot the public purse, employers, and individuals. That is its primary purpose. The individuals on the floor are providing healthcare to individuals. The healthcare organizations are just designed to loot. The excess revenue going to the healthcare system means they have unlimited funds to successfully engage in massive lobbying and propaganda campaigns to prevent change.

      The whole ACA argument is a smokescreen that the healthcare industry is using to keep Americans from understanding that the problem is simply that American healthcare is over-priced by 50% to 100%. A Canadian style healthcare system (Medicare for All) could cover all Americans for less money than what the US taxpayer is currently paying for Medicare for seniors, Medicaid for the poor, and VA for the military vets.

      Small business should be begging for Medicare for All with good price controls as healthcare would largely cease to be an expense or distraction in running their business.

      1. Ian Ollmann

        I should think on similar grounds small businesses should be begging for UBI. Then we can legitimately keep a minimum wage of $7.25, if UBI covered the rest.

        The cynicism of course is they would end up paying for it one way or the other. However, I suspect that small businesses and small business owners are not so actually rich that it wouldn’t be a net win for them.

      2. rd

        We can play a game of “Which of these is not like the others” https://ritholtz.com/2020/11/united-states-outlier/

        This dramatically shows how the US is massively out-of-step with the rest of the developed world for life expectancy and cost. We get developing world life expectancy at substantially higher cost than the developed world. No. 1 in expenditure (by far – Secretariat at Belmont type of “victory”) and No. 46 in life expectancy. https://www.worldometers.info/demographics/life-expectancy/

  4. Starry Gordon

    “Could the demise of the ACA lead to Medicare for All….”

    It would certainly lead to considerable political pressure for a replacement which might be Medicare for All. That pressure, which would operate on Republicans as well as Democrats, even conservative Democrats like Mr. Biden, might well succeed in accomplishing something. The ACA is much better for the medical, pharmaceutical, and insurance industries, and they will probably get the word through to the Supreme Court, including Justice Barrett.

    1. Hepativore

      The Democrats and Republicans might give us another unworkable idea like touting private health savings accounts and forcing people to buy them now that so many people have lost their jobs in the wake of the second Great Depression. Otherwise, they might not replace the ACA with anything as there is probably a bipartisan consensus that doing nothing is better than Medicare For All. After all, to them it is better to let people suffer or die rather than lose the financial support of their donors in the health insurance industry.

      Think of us as being blood sacrifices to the HMO gods much like the rituals of the Aztecs to ensure the daily rising of the sun.

  5. Darthbobber

    With the penalty at zero, it’s likely to be hard for groups of individuals to make a claim of harm from that penalty. So if the governmental units failed on standing, it’s hard to see how anyone else could now clear the bar.

    And leave us not forget that the only reason there’s even the theoretical possibility of a ruling on the only theoretically existing mandate affecting the whole law it’s only because of the law’s lack of the boilerplate severability language that had been routinely incorporated into every complicated legislative package since the early New Deal.

    Which was fixable even as late as the 2010 lame duck session, if certain persons not to be named had thought it important to do so.

  6. Darthbobber

    “After originally contending that the entire law should not be struck down when the suit was filed in 2018, the Trump administration changed course in 2019 and joined the GOP officials who brought the case.”

    Given that Trump was not president in 2018, they should be saying that the change of administrations caused a change in the executive branch’s position. As written, it sounds as if it was Trump taking both positions. Because of course it would.

  7. howseth

    The Medicaid expansion under ACA – in California – has been very good for my family. Striking down the law – I assume – would put us worse off? Would we lose our health insurance. A backwards step – back to assorted clinics, and/or the awful dishonest Anthem – or Blue Cross with huge deductibles – and awful customer service.

    Striking down the law is likely a death sentence for some – just add that to ol’ Covid-19. Time to see if the justices of Supreme Court gives a crap.

      1. Ian Ollmann

        This is probably true of representatives in Congress and the Administrative branch. They have recurring funding requirements and need donors. Justices with lifetime appointments however can indulge themselves in legislating from the bench with more ivory tower concerns at heart. I don’t know the justices personally, but I imagine they would not agree with you.

  8. Glen

    I seriously doubt if the ACA will be struck down.

    SCOTUS takes it’s marching orders from Corporate America especially with the addition of ACB. ObamaCare is a HUGE gimme to the Private Insurance Industry. That, along with the massive Wall St bailouts is what keeps the American Private Insurance industry the giant money suck that it is.

    Follow the money.

    1. Susan the other

      The FIRE industry. The private medical insurance industry is part of the bedrock of financialization and financialization has replaced capitalism. So it would be dangerous to diminish money going to medical insurance profiteers because it would ricochet through the delicate financial web. And medical care is almost the only sure thing left for “investors” to exploit. We all get sick. What a treasure trove. I’d like to be able to follow the money. But Congress is the architect of financialization, so naturally we aren’t gonna get an explanation from them. If the ACA is struck down because it not only is inefficient and corrupt, but because it is deceptive and clearly unconstitutional as well as erratic and arbitrary, and etc. – there can be no peace in Congress. They will be scurrying around like the squirrels they are, trying to actually make their “system” keep working. I’d love to see it happen.

  9. lobelia


    But states are not subject to the so-called individual mandate

    At least five states and DC have implemented the horrid individual mandate, with more expected to follow suit (how did the author miss this, especially when Kaiser Health News is headquartered in California):

    As of January 1, 2019, health insurance is no longer mandatory at the federal level. However, there are still some states that require residents to enroll in medical coverage as of 2020. Those states include:

    ● California
    ● Massachusetts
    ● New Jersey
    ● Rhode Island
    ● Vermont
    ● Washington DC

    If you are a resident of any of the mentioned states, and you forego health coverage, you will face a tax penalty, unless you qualify for an exemption.

    Other states are planning on following suit in the coming years. Those states include Connecticut, Maryland, and Hawaii.


    (Note: the site’s penalty amount noted for California: $695 per adult, and $347.50 per child under 18, is incorrect. It’s $750 minimum per adult, $375 for a child under 18, or 2.5% of gross income that exceeds the filing threshold ( https://www.ftb.ca.gov/about-ftb/newsroom/health-care-mandate/personal.html ), I couldn’t find a link, among the many I found, that didn’t understate the California penalty. Don’t know whether the other penalty amounts are incorrect.)

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