Ruling Striking Down Obamacare Comes Six Years Late and a Dollar Short

Late Friday afternoon, a federal judge in Fort Worth ruled that, because the individual mandate could no longer be upheld as a tax (because Congress in 2017 eliminated the monetary assessment for noncompliance), it was unconstitutional – and that it couldn’t be severed from the rest of the Affordable Care Act, so all of Obamacare is invalid. Fantastic, right? This is what I and many others have been working for since the law was signed in March 2010 and, while it took a while, we finally reached to the mountaintop – a second bite at the apple to undo John Roberts’s betrayal, right?

Well, not quite. Much as Judge Reed O’Connor’s ruling seemed to parallel the ruling by Judge Roger Vinson nearly eight years ago, in the litigation that culminated NFIB v. Sebelius in 2012 – Josh Blackman even evoked that early decision in a clever allusion to Groundhog Day – this time around there are different statutory facts being evaluated and so a different legal posture. 

Mind you, it’s absolutely correct that a “shared responsibility payment” that is $0 can no longer be justified as a tax, even under Chief Justice Roberts’s twistification. That is, a bare command to buy insurance is unconstitutional because it goes beyond federal power under the Commerce Clause and Necessary and Proper Clause (so ruled a majority of the Supreme Court, including Roberts).

But that’s not the end of the ball game because the question of whether the individual mandate can be severed from some or all of the rest of the ACA is a different one than whether the mandate itself is constitutionally kosher. Judicial doctrines of severability are somewhat complicated and call for judgment rather than bright lines, but they boil down to two questions: (1) Is the remainder of the statute “fully operative as a law”? and (2) Would Congress have passed the remainder? In Cato’s severability brief in NFIB, we argued that (1) “The individual mandate was essential to the Act’s scheme for achieving near-universal health care coverage at an acceptable cost” and (2) “Severing the individual mandate from its related provisions in Titles I and II will produce new comprehensive health care legislation that Congress did not enact and would never have enacted.”

But this time around, the Tax Cuts and Jobs Act of 2017 reduced the tax-penalty to $0 without eliminating so much as the guaranteed-issue and community-rating provisions (the parts most closely tied to the mandate), so (1) either the rest of the law would seem to be working (or not) irrespective of the individual mandate, and (2) we now have the scheme that Congress actually passed. In other words, Congress had the opportunity to sever as much of Obamacare as it wanted – legally speaking; there was only so much Republicans could do practically through “reconciliation” given the Democrats’ ability to filibuster more substantive legislation – and it effectively ratified the entirety of Obamacare with a $0 mandate.

So I’m quite skeptical that the severability ruling will be upheld on appeal, even by the conservative-friendly Fifth Circuit. There are also potential issues of standing, given that it’s based on compulsion to follow a law that has a $0 enforcement mechanism and no other legal consequences.

The case might not even get to the Supreme Court. And if it does, remember that the five justices who ultimately upheld the ACA are still on the Court. Plus Justice Brett Kavanaugh twice rejected challenges to the law when he was on the D.C. Circuit – albeit on technical grounds, and without engaging in severability analysis – which is why attacks on him from the left for wanting to gut Obamacare were so misguided.

In short, Friday’s ruling gave me a wistful thought about what might have been, but this case just isn’t the silver bullet that will finally kill the monster that has so damaged our health care system, economy, and rule of law. Indeed, I imagine that at a certain point we’ll stop talking about Obamacare – that point may have come when Senator John McCain voted against its “skinny repeal” last year – and just debate how best to reform “the health care system.”

For more analysis of Friday’s ruling in Texas v. United States, see Volokh Conspirators Jon AdlerIlya Somin, and special guest star Josh Blackman in two posts (with more to follow). It’s telling that I haven’t yet seen Randy Barnett, the intellectual godfather of the original individual-mandate challenge, opine on the ruling. I think he knows, as well as the rest of us, that this case isn’t the blockbuster some have made it out to be.