Supreme Court appears willing to leave Obamacare in place

Key Points
  • The Affordable Care Act seems likely to withstand its third challenge at the Supreme Court.
  • During arguments in a case seeking to eliminate Obamacare, two of the court's conservatives on Tuesday signaled they would not strike down the landmark legislation.
  • Chief Justice John Roberts and Justice Brett Kavanaugh suggested that the court may cast aside the individual mandate while leaving the rest standing.
Supreme Court appears to lean against striking down ACA

The Affordable Care Act seems likely to withstand its third challenge at the Supreme Court.

During arguments in a case seeking to eliminate Obamacare, two of the court's conservatives on Tuesday signaled they would not strike down the landmark legislation.

Chief Justice John Roberts, who cast the key vote in 2012 upholding Obamacare, and Justice Brett Kavanaugh, an appointee of President Donald Trump, suggested that the court may cast aside a challenged provision of the law, known as the individual mandate, while leaving the rest of it standing.

Such a decision would leave in place the central aspects of the 900-plus page legislation, which collectively have transformed American health-care over the past decade, from the expansion of Medicaid in dozens of states to the requirement that insurers cover those with preexisting conditions.

"Today, I think the winner in this case was the Affordable Care Act and Congress," Michele Goodwin, a law professor at the University of California, Irvine, said in an interview after arguments concluded.

The individual mandate provision, as enacted in 2010, requires most Americans to obtain health insurance or pay a penalty. The GOP-controlled Congress reduced the penalty to $0 in 2017.

The Supreme Court upheld the mandate in 2012 under Congress's taxing power, but Texas and other Republican-led states argued that the reduction of the penalty made that justification no longer workable, and as a result the whole Affordable Care Act must be struck down.

The Trump administration, via the Department of Justice, argued in favor of the red states' challenge.

The court's six conservatives seemed sympathetic to arguments made by Kyle Hawkins, the Texas solicitor general, and acting Justice Department Solicitor General Jeffrey Wall that the individual mandate became unconstitutional when it was stripped of an accompanying penalty.

But Roberts and Kavanaugh suggested that would not doom the rest of the law.

"I think it's hard for you to argue that Congress intended the entire act to fall if the mandate was struck down," Roberts told Hawkins, noting that the same Congress "did not even try to repeal the rest of the act." Roberts was appointed by President George W. Bush.

Roberts acknowledged that some Republican lawmakers may have wanted the Supreme Court to strike down the law, "but that's not our job."

Kavanaugh told Donald Verrilli, who was solicitor general under former President Barack Obama, that "I tend to agree with you that this is a very straightforward case" and that under the court's precedents "we would excise the mandate and leave the rest of the act in place."

Verrilli was arguing on behalf of the Democratic-controlled House of Representatives, which along with a coalition of Democratic states led by California was defending Obamacare. Michael Mongan, the solicitor general of California, argued on behalf of the blue states.

Later, Kavanaugh told Hawkins that it "sure seems" like Congress in 2017 wanted to lower the individual mandate penalty without getting rid of the Affordable Care Act's other provisions, such as its protections for those with preexisting conditions.

While Republicans in Congress repeatedly threatened to repeal the entire Affordable Care Act, the party was never able to muster a majority in the House and Senate willing to do so. An effort at the "skinny repeal" of certain provisions, including the individual mandate, failed in 2017 after the late GOP Sen. John McCain of Arizona cast a vote against the effort.

Michael Kimberly, a partner at the law firm McDermott Will & Emery who co-chairs the firm's Supreme Court and appellate practice group, said that Kavanaugh's comments were "strikingly direct."

Kimberly said that Kavanaugh's comments were out of character, suggesting the judge was trying to signal how he would rule in the case.

"I think the defenders have reason for cautious optimism," Kimberly said.

The court's three liberals, Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan appeared ready to side with the blue states and the House of Representatives. It takes five votes to gain a majority on the nine-judge panel.

The Democratic-appointees seemed skeptical of the red states' argument that the mandate was unconstitutional, and sympathetic to California's claim that those states lacked even the ability to sue, given their failure to prove that they had been harmed by the law.

"The only thing that changed is something that made the law less coercive," Kagan said.

Breyer suggested that allowing the red states to bring their claim could open up challenges to all sorts of laws that would be unlawful if they included penalties, such as hypothetical statutes calling for citizens to plant trees, clean up yards or buy war bonds.

The court's conservatives seemed more amenable to the claim from red states and the Justice Department that the law's challengers had been harmed.

Roberts noted that if Congress passed a law requiring everyone to mow their lawn once a week, even if there was no penalty, there "will certainly be injury" to those who didn't comply. Justice Clarence Thomas said that such a law could still have a "chilling effect."

A ruling siding with the red states by invalidating the individual mandate, but with the blue states by allowing the bulk of the Affordable Care Act to remain standing, would represent a win for Democrats.

Health-care activists said that if the Supreme Court struck down the Affordable Care Act, more than 20 million people could lose their insurance.

The dispute, which was argued in the shadow of last week's presidential election, was a central focus of Democrats during the confirmation hearings for Justice Amy Coney Barrett last month.

After the late Justice Ruth Bader Ginsburg, a liberal, died in September, Democrats sought to turn the fight for her replacement, Barrett, into a referendum on the law.

In that regard, Barrett's questioning on Tuesday was anticlimactic, as it didn't provide much insight into her thinking about the legal issues.

The case had also become a political flash point in the race between Trump and President-elect Joe Biden, who have sketched out vastly different visions for the future of American health care.

Trump pushed to gut the Affordable Care Act, while Biden's agenda calls for building on the law, which the former vice president played a role in shepherding through Congress in the first place.

The political stakes were amplified by the pandemic, which has killed more than 230,000 in the U.S. and made health care a more salient issue. Efforts to contain the pandemic also caused a devastating recession, which has resulted in millions losing their health-care coverage.

"The elephant in the room happens to be the political tenor behind all of these issues," Goodwin said. She noted that given Trump's attacks on the federal judiciary, the chief justice has had to project an air of neutrality more than previous leaders of the court.

"The chief justice is having to call balls and strikes, and in such a way that it is clear the court does abide by the rule of law, and the court under his jurisdiction will not be partisan," Goodwin said.

"How much of that he controls is limited," she added. "The reality is this is a court that has been affected by the political tenor of these times."

Ahead of the case coming to the Supreme Court, two lower courts sided with Texas, including the 5th U.S. Circuit Court of Appeals court, and agreed that the individual mandate was unlawful. The appeals court, though, did not say whether the rest of the Affordable Care Act would also have to be struck down.

Arguments, which were scheduled to last for 80 minutes, began at 10 a.m. ET and concluded around noon. They were conducted by phone as a result of the Covid-19 pandemic and streamed live to the public.

A decision in the case, known as California v. Texas, No. 19-840, is expected toward the end of June.