Trump Administration Asks Court to Strike Down Entire ACA
Source: Health Affairs
In yet another unexpected twist in litigation over the constitutionality of the Affordable Care Act (ACA), the Department of Justice (DOJ) took the new and stunning position that the entire ACA should be invalidated because the individual mandate penalty has been set to $0. The DOJ took this position not in a brief or other filing with any sort of explanation but in a two-sentence letter to the Fifth Circuit Court of Appeals on March 25, 2019, the day its opening brief was due.
The DOJ now fully agrees that a December 2018 decision—where a district court declared the entire ACA to be invalid—should be affirmed and upheld by the Fifth Circuit. Because the federal government is no longer asking the Fifth Circuit to reverse any part of this decision, the DOJ intends to file its next brief on April 24 alongside the plaintiffs who are challenging the law.
It is unclear what led the Trump administration to make such a dramatic reversal and put the full force of its weight behind legal arguments that have been criticized by observers including prominent conservative legal scholars, the Wall Street Journal editorial board, and the National Review editorial board, among others. The plaintiffs’ arguments and the analysis in the district court’s ruling—from standing to severability—have both been received with deep skepticism.
The reversal is also sudden. The DOJ had filed a notice to appeal Judge O’Connor’s decision to the Fifth Circuit as recently as January 4. This was not surprising; the DOJ had previously taken the position that, beyond the individual mandate and core ACA protections for people with preexisting conditions, the rest of the ACA was severable and should be upheld. Because the district court’s ruling went beyond the DOJ’s then-position, the DOJ lost part of the case and appealed as expected.
One possible explanation for the shift? The change in leadership at DOJ. During his Senate confirmation hearing, U.S. Attorney General William Barr said he would be open to reconsidering the DOJ’s position in the litigation. At the time, he noted it was a case that he “would like to review.” Perhaps he did. He has taken a similar position before: in 2012, Attorney General Barr signed on to an amicus brief in NFIB v. Sebelius that asked the Supreme Court to strike down the individual mandate and the ACA in its entirety.
Texas v. United States is a lawsuit over the constitutionality of the individual mandate and, with it, the entire ACA. A group of 20 Republican state attorneys general and governors, later joined by two individuals, brought the lawsuit in February 2018 after Congress zeroed out the individual mandate penalty in the Tax Cuts and Jobs Act of 2017 (TCJA). They argue that the penalty-less mandate is no longer enforceable as a tax and thus is no longer valid. They further assert that because the entire ACA relies on the mandate, the rest of the ACA should also be struck down.
In May 2018, 17 Democratic state attorneys general, led by California, were allowed to intervene in the lawsuit to defend the ACA in its entirety. In June 2018, the DOJ decided not to defend the constitutionality of the mandate and noted its belief that certain additional provisions of the ACA could not be severed from the mandate. This position is discussed in more detail below.
Oral argument was held in early September and, in mid-December, Judge Reed O’Connor of the Northern District of Texas agreed with the plaintiffs and declared the entire ACA to be invalid. He reaffirmed this decision in late December when issuing a stay and partial final judgment. This allowed the case to be appealed immediately to the Fifth Circuit, and in January 2019 the DOJ and 17 Democratic attorneys general so appealed.
After the 2018 elections, Maine was allowed to withdraw as a plaintiff; the governor and attorney general of Wisconsin recently made a similar request but it has not yet been considered by the Fifth Circuit. On the other side, four additional attorneys general and the U.S. House of Representatives have been allowed to intervene in the lawsuit to defend the ACA in its entirety.
DOJ’s Prior Position
Even before the letter, the DOJ had taken a highly unusual position by agreeing in part with the plaintiffs and declining to defend the constitutionality of the individual mandate and major provisions of the ACA that protect people with preexisting conditions. These provisions are guaranteed issue, community rating, the ban on preexisting condition exclusions, and discrimination based on health status. This break with tradition may have contributed to the fact that three career DOJ attorneys removed themselves from the case; they were replaced with three political appointees.
To justify its position, the DOJ had pointed to a previous position taken by the government in NFIB. In a brief on the constitutionality of the mandate, the DOJ had argued, “Congress’s findings establish that the guaranteed-issue and community-rating provisions are inseverable from the minimum coverage provision.” The DOJ also pointed to the decision in King v. Burwell where the Supreme Court described guaranteed issue and community rating provisions as “closely intertwined.” The DOJ—and the plaintiffs—also emphasized the importance of the ACA’s legislative findings. It argued that Congress believed the individual mandate was “essential” to the guaranteed issue and community rating provisions and that these three provisions were “interdependent.”
The DOJ had, however, drawn a line at those provisions, arguing in its initial filing that all other ACA provisions were severable from the mandate. Pointing to the ACA’s legislative findings, the DOJ argued that the plaintiffs “rely on a chain of speculative hypotheticals” to argue that the ACA is no longer coherent federal policy in the absence of the law’s three core provisions. The filing cited Medicaid expansion and the health insurance marketplaces as examples, noting for instance that “there is no reason why the ACA’s particular expansion of Medicaid hinges on the individual mandate.”
The DOJ also pointed out that, even after the TCJA, Congress amended the ACA to delay implementation of the Cadillac tax and suspend the health insurance tax. The DOJ took this as further proof of Congress’s intent that most of the ACA should remain in place, asserting that “Congress likely would not have sought to amend a statute that it believed had been invalidated in total.” The DOJ further acknowledged that “the other major provisions [of the ACA] still serve the objectives that Congress had when enacting the ACA … especially given that Congress itself reduced the effect of the mandate by eliminating its penalty in the TCJA, and yet did not repeal the rest of the ACA despite repeated attempts to do so.”
The DOJ maintained this position during oral argument in September 2018. Then, attorneys for the DOJ stated that it would be inappropriate for the court to sever or to invalidate provisions—other than guaranteed issue and community rating—if the plaintiffs do not have standing to challenge those provisions. In response to a question from Judge O’Connor, the DOJ noted that it had limited its position to striking down the mandate, guaranteed issue, and community rating (instead of the entire ACA) because of the Obama administration’s previous position in NFIB, King, and the “textual clues” between those provisions that do not exist with respect to all other parts of the ACA.
Filings From Other Parties
In the meantime, the intervenor states—led by California—and the House of Representativesfiled their opening briefs on March 25. Both briefs argue that the plaintiffs do not have standing to bring the lawsuit in the first place, that the mandate with a $0 penalty remains constitutional, and that the mandate is severable from the rest of the ACA if found to be unconstitutional. In arguing that the mandate remains constitutional, the intervenor states note that individuals can now freely choose between having health insurance or not, without paying any tax if they choose the latter. The mandate “may encourage Americans to buy health insurance, but it imposes no legal obligation to do so.”
The brief from the House of Representatives argues the same points while emphasizing that the district court’s opinion severely abused judicial power and “disregarded the clearly expressed intent of the democratically elected representatives of the people.” The plaintiffs’ arguments rely on a faulty premise that the mandate requires individuals to purchase health insurance. This, the brief argues, is contrary to NFIB. In NFIB, the Supreme Court concluded that the mandate was not a legal command to buy insurance but instead provides a choice between two lawful options of buying health insurance or paying a penalty. Nothing in the TCJA altered this construction, and the mandate in its current form presents the same two choices. This, the House argues, would remain true whether the penalty is set at $0, $1, or back at $695.
The DOJ’s decision not to defend the ACA breaks with the Department’s long-standing, bipartisan commitment to defend federal laws if reasonable arguments can be made in their defense. Decisions not to defend federal law are exceedingly rare. It seems even rarer to change the government’s position mid-appeal in such a high-profile lawsuit that risks disrupting the entire health care system and health insurance coverage for millions of Americans.
The change in DOJ’s position is likely to again spur questions about whether the Trump administration will continue to enforce the ACA or not. Concern that the federal government would stop enforcing the law (due in large part to its prior position in Texas) led the attorney general of Maryland to file a lawsuit asking a court to declare that the ACA was constitutional and enforceable. In February 2019, a federal judge concluded that Maryland could not yet ask for that declaration because the Trump administration had not stopped enforcing the law and the state had not (yet) been harmed. Maryland is likely to refile its lawsuit if the Trump administration changes its enforcement position.
Filed Under: ACA/Health Reform