As promised in my previous post, here’s a quick recap of the legal findings and notable takeaways from last week’s Fifth Circuit Court of Appeals ruling in Texas v. United States:

The appellate court’s 2-1 majority opinion spent relatively
little time in concluding that the penalty-free iteration of the individual
mandate (post-Tax Cut and Jobs Act of 2017 defanging) has become an
unconstitutional command to purchase ACA-approved health insurance, because at
least a few people might actually believe they have to act on those
instructions.

Without any of the key features of a “tax” remaining to uphold the constitutionality of the mandate (see Roberts., C.J. and his saving construction majority of one in NFIB v. Sebelius), this ruling may be technically correct. It’s certainly no worse than the 2012 one! Whether the legal injury at stake is sufficiently consequential to make a difference is a closer call, but the ACA challengers did produce two individuals who swore that they had to buy insurance they didn’t want, because the individual mandate devil made them do it. So, take two, and hit to Right?

Almost half of the majority opinion in the current case is devoted to various aspects of the legal standing issue. The court decided to hand out standing like a Pez candy dispenser to almost every party in the case (except perhaps the late-arriving U.S. House of Representatives). Dissenting Judge King mounted a vigorous argument against standing, essentially insisting that the surviving mandate was like “Seinfeld,” a show about nothing, with neither harm nor fouls of legal consequence. However, this part of the ruling should hold up, even if the plaintiffs did not get far beyond the minimum needed on the issue. And given how generously other federal courts recently have handed out standing to other state plaintiffs claiming pocketbook injuries due to federal executive branch actions, it would seem that there’s more room around this litigation piñata for state attorneys general of both parties to take their respective swings.

The core of the ruling, and whatever else might be ahead after a remand back to federal district court, involves “severability,” as in what else might survive or fall in the rest of the ACA given a finding that the vestigial version of the individual mandate has become constitutionally flawed. On this issue, even the majority opinion by Judge Elrod took some shots at the judicial overreach by the district court in its December 2018 ruling, which would have left the rest of the ACA unenforceable as well. The remand instruction to Judge Reed O’Connor to do some more thorough homework on the issue, instead of jumping to sweeping conclusions lacking much examination, was not just a nudge to be a little cleverer next time. Despite some superficial hedging about not putting its thumb on the scale, even a somewhat sympathetic majority opinion (loading up its footnotes with material from ACA skeptics and starboard-side legal observers) sent a strong signal that the intent of the 2017 Congress that zeroed out the mandate penalty, not the 2010 Congress that passed the ACA, might need to be examined more carefully.

Yes, there are several counters to that line of argument (e.g., the procedural limits of budget reconciliation, the expedient lust for exaggerated “savings” as a budget offset to larger tax cuts), but they may not prevail in future rounds of appellate review, let alone at any Supreme Court level in a now more distant future.

It would take a highly unusual rethinking of current
severability doctrine to overturn the entire ACA in this case. The two
admittedly malleable “pillars” of severability review, particularly over the
last two decades of case law, are summarized as “What would Congress intend to
do regarding the rest of a law if one part of it is found to be
unconstitutional?” and “Could the rest of law still function and remain
operative without the latter?” Such exercises may often involve a fair amount
of make-believe and judicial lawmaking after the fact, but there is a very
strong bias toward preserving as much of a federal statute as possible. And in
this case, even a closer parsing of the 2010 congressional findings of fact at
best tied the mandate as essential only to a few core regulatory provisions
(guaranteed issue, adjusted community rating, related restrictions on
pre-existing condition exclusions and health-status rating, and perhaps
essential health benefits), as the Obama administration’s solicitor general
once grudgingly argued (for other tactical reasons) in the 2012 NFIB case.

In most cases, higher courts will inherently conclude that a
given Congress always wants to preserve as much of the laws it once passed as
possible (whether or not it otherwise violated the Constitution along the way)
and remember that keeping otherwise dysfunctional laws in operation is pretty
much standard practice in Washington, anyway!

As a matter of full disclosure here, I once headed up an amici brief in the NFIB case on the severability issue, arguing that a compromise approach there might have just knocked the Title One provisions of the ACA, dealing with insurance regulation and financing. However, even though the political reality was that NOTHING in the ACA would have passed Congress in 2009, or 2010, without the individual mandate provision’s key economic, legal, and political fictions embedded explicitly, that really doesn’t count for much under modern severability law. Judges are disinclined to calibrate the WABAC Machine’s settings to restore the precise moment in time for such parallel-universe political speculation.

Of course, several puzzling aspects to the Fifth Circuit
panel’s severability punt back to district court remain. The appellate court
quite easily could have made its own more definitive ruling on the issue, as
essentially a matter of law. The majority’s remand instructions suggesting
further consideration of several arguments raised on appeal by the federal
defendants involve either unworkable jurisdictional distinctions (administering
the ACA differently in the states of the plaintiffs than in the rest of
the country) or another shot at limiting severability remedies to
provisions for which the original plaintiffs suffered injury and have legal
standing. The latter move is one that Department of Justice attorneys have
tried before, with mixed success in court (for example, it was essentially
ignored by the four dissenting justices in the NFIB case).

Although there is a narrow technical argument for severing
the ACA’s guaranteed issue and adjusted community rating provisions, along with
the individual mandate, from the rest of the “surviving” statute, any such
judicial result would have to defy the more powerful forces of politics,
economics, administrative feasibility, and the passage of time. In brief, we
are not back in 2010, 2012, or even early 2017 anymore. Health industry
interests, public opinion, and even once fiercer political adversaries have
moved on. Unwinding and rewiring the circuitry of health care arrangements that
have already adapted to the ACA’s complex and contorted instruction booklet
would be a herculean task, and there are few volunteers for it. On the
political meter, the most telling measure involves which side of the remaining
ACA debate is most interested in highlighting the potential dangers of
reversing health policy directions suddenly and which side prefers to change,
or avoid, the subject.

It’s disappointing for our continued health policy discourse
that we have lost interest in remembering how much of the ACA edifice was
constructed upon fictional foundations. Among many examples: an individual
mandate that never worked as imagined (here’s looking at you, CBO!), predicted
budget savings and cost offsets that never arrived or were soon abandoned once
they got the law passed, artificial markets that failed to operate in practice
like their theorist central planners promised, and statutory words that were
reshaped like Play-Doh to keep basic operations from falling apart. ACA
architects and its fiercest advocates seemingly incorporated the strategic
advice of Winston Churchill, that “in wartime, truth is so precious that she
should always be attended by a bodyguard of lies.”

On the legal end of these chronic battles, taking the
language of the ACA statute “literally” to its limits, in hopes of overturning
the most egregious zig zags as unenforceable contradictions, turns out to have
exhausted its own limits in court, as well.   

In any case, we appear set to sail off ahead deeper into turbulent waters, with the latest set of health policy barnacles well-cemented onto a hull already full of past ones. As for the prospects of reviving serious existential challenges to the ACA in the courts, Apollo Creed summed up the exhausted conclusion to the Italian Stallion at the end of Rocky, ”Ain’t gonna be no rematch.” And Rocky, after getting closer to an upset than anyone else imagined, replied: “Don’t want one.”

Yes, there were quite a few more sequels (the Hollywood money machine, like political polarization appetites, demanded them) but none as thrilling or as consequential as the first fight. Now, the latest ACA replays in court appear to have Jumped the Shark, too.

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