Monday, June 11, 2018

Very Brief Blog: New Legal Actions re Constitutionality of Affordable Care Act

  • Takeaway:   New legal issues for ACA focus on "pre existing conditions."   However, among the legal documents, other issues like "preventive benefits" are also drawn into the fray.  


Much press since Thursday June 7, when HHS filed a brief that key parts of the Affordable Care Act were now unconstitutional, since Congress repealed a penalty aka "tax" for not having insurance.  The brief was part of a case running for months at the behest of numerous states.

Most of the attention has focused on whether or not the Administration should defend the law against threats, or whether it is OK for the Administration to side with those who argue the law isn't constitutional.   Beyond the individual mandate, it's worth looking at what different sides of the case argue regarding other parts of the ACA such as mandating copay free services that are endorsed by the USPSTF.

I'm a non-attorney so I provide only a simple review of my understanding of key facts.  For an entry point, see U Michigan attorney Nicholas Bagley's blog here

Phase One

There was a Supreme Court challenge that the ACA was unconstitutional since it "mandated individuals to buy insurance."   Argued, there was no constitutional authority for Congress to do that.  (Although Congress may regulate interstate commerce, raise an Army, and so forth.)   The Supreme Court actually tries to affirm that laws are constitutional if it can find a way to do so, and Court found that the penalty for not having insurance was, in essence, a tax, and Congress can tax.   Here.

Phase Two

Congress 2017 repeals the ACA tax on individuals who don't have insurance.

Phase Three

A number of states filed suit that without the tax, the Supreme Court judgement is no longer effective, as it was based on "the tax."   See State case here, 33pp.   States argue that without the individual tax, the individual mandate isn't legally justified and without that, US had already argued that other parts of the law like guaranteed issue despite preexisting conditions, don't make sense.   (It's like the scene in the movie where the good guy drops his pistol and the bad guy picks it up.)

Arguing both with US government prior statements, and with reference to a prior "severability" case (Alaska v Brock 1987), States argue that all of the ACA doesn't make sense without the individual tax, which no longer exists.

Note, as below and on several other pages, States argue that guaranteed issue must now be stripped from the law, AND OTHER regulations on insurance such as essential health benefits and the requirement to cover preventive services.  See:

Phase Four

June 7 sees the "Federal Defendants' Memorandum Response" to the above States' application for preliminary injunction against the ACA.  Here.   (See also a 3-page letter from Jeff Sessions to Paul Ryan, here.)

A) Preliminary Injunction not needed. Feds argue that a preliminary injunction against the ACA is not required, but they agree in part with the States' case and would see it affirmed in the court's decision memo.

B) Feds: Concur with States; kill pre existing condition law.  Feds argue that the guaranteed issue aspect of the ACA (no pre existing conditions) is inseparable from the tax, and guaranteed issue should be struck down now, absent the tax.

C) Feds:  Preserve rest of law.  However, Feds do NOT argue (as did States) that "all" of the ACA is unconstitutional.   One section of the Fed document states "guaranteed issue and community rating requirements are NOT severable" and another section states, "ACA's other provisions ARE severable."   Feds also argue that Congress specifically repealed the individual mandate tax (and a range of other tweaks), but if Congress wanted to do so, it could have repealed more of the ACA itself.[*]   For example, "There is no reason the ACA's expansion of Medicaid should hinge on the individual mandate."  At best, the States offer a chain of "speculative hypotheticals" in a difficult attempt to connect various parts of the ACA to the individual mandate.


We are in a rare epoch where the head of HHS, Alex Azar, is not only an attorney, but a really smart attorney, so the Fed position would carry his endorsement.

If the Court sided with the Federal brief, it would strike down the guaranteed issue (re pre existing conditions) but it would leave other aspects of ACA intact (such as Medicaid expansion and preventive services.)

* Of course, following the HHS's own line of thought here, Congressional elves could at one blow have repealed both the tax and the preexisting condition rule, if that was the Hill's intention, rather than repealing the tax while leaving the dependent pre-existing rule for a contentious multi year court case.