Ruling on Obamacare as Unconstitutional Caught Media Off Guard

When a federal judge recently ruled that the Affordable Care Act is unconstitutional, many in the media were caught off guard. Little attention had been paid to the case, which was brought by the attorneys general of 20 states and by the Texas Public Policy Foundation (representing individual clients who have been harmed by Obamacare).

But when U.S. District Judge Reed O’Connor handed down his ruling, he suddenly had everyone’s attention. What has followed has been an exercise in opinion-forming and prediction-making — based on too little information and even less understanding of how we got here.

The seed of Friday’s decision was planted by the U.S. Supreme Court itself, in NFIB v. Sebelius, a 2012 decision that can far more accurately be called “activist” than what O’Connor delivered. In NFIB, Chief Justice John Roberts rejected the government’s claim that the Commerce Clause of the U.S. Constitution made the Affordable Care Act legitimate; instead, he invented a new argument for the Obama administration — that the ACA was constitutional under Congress’s power to tax.

The individual mandate penalty borne by those who failed to buy qualifying insurance was a source of revenue, and therefore a tax. The gavel came down and the ACA stood.

But in 2017, the Tax Cuts and Jobs Act set that penalty at zero — meaning that it no longer generates revenue and can no longer be considered a tax. And without that tax, by Roberts’ own logic, the ACA no longer has any constitutional basis.

That’s what we argued before Judge O’Connor, and he agreed. He further ruled that the individual mandate is an integral part of the ACA, and can’t be separated out. If it’s constitutional, then the whole thing is.

“The Supreme Court’s only reasoning on the topic thus supports what the text says: The Individual Mandate is essential to the ACA,” he wrote.

His reasoning is very straightforward. Yet his ruling is now being decried by Democrats — and even some Republicans — as an unjustifiable political attack on President Obama’s signature achievement.

And they warn that millions will be impacted.

“The District Court’s ruling poses a dangerous threat to the healthcare of millions of Americans,” California Attorney General Xavier Becerra said.

The truth is that while Judge O’Connor issued a ruling, he did not issue an injunction — the ACA remains in effect. The appeals process will take two years or more, in all likelihood. And nothing is final until all appeals have been exhausted. That’s how our legal system works.

As for the “millions of Americans” Becerra cites, let’s all remember that millions of Americans — like my clients — have already been harmed by the ACA. They have lost their chosen physicians and they have lost their affordable health insurance. What they have now is far more expensive and far more limiting than the plans they had before. They’re no longer the primary decision-makers about their health care and their health insurance. Instead, they have to — by law — purchase what the ACA exchange sells them, on its own terms.

There’s still room for decisions of course; because of those high deductibles, people must choose whether they can afford to see a doctor when their young children have a case of the sniffles, or whether they should just ride it out.

My clients aren’t alone. More than 2 million people have dropped their ACA plans since 2016 because they can’t afford the huge increases in premiums.

Also, the vast majority of people who have gained health insurance through the ACA are new Medicaid enrollees. States that expanded their Medicaid rolls as part of the ACA are still free to do so, even if the ACA goes away.

The truth is that the ACA is broken, and has been from the start. This ruling should be seen by all —Congress and citizens alike — as an opportunity to craft something better.

What might that look like? That should be up to the states. California, for example, might want its own version of the ACA, or even something more centralized. Fine. It should be free to do so.

But in Texas, we might want something different — something that brings doctors and patients closer together, instead of separated by more and more bureaucracy. 

Judge O’Connor’s ruling grants us that freedom. And that’s why it should be celebrated.

Robert Henneke is lead counsel for the Individual Plaintiffs in the pending Texas v. U.S. lawsuit. He serves as general counsel and litigation director at the Texas Public Policy Foundation. @robhenneke