On June 17, six U.S. Supreme Court justices joined an opinion penned by Justice Stephen Breyer concluding that California v. Texas, the latest challenge to the Affordable Care Act (ACA), should be dismissed. Justice Thomas concurred. Justices Alito and Gorsuch dissented. This marks the third time the Supreme Court rejected a challenge to the ACA. The Court did not conclusively preclude any further challenges. But the ACA, now having survived three trips to the Supreme Court and intense congressional repeal efforts, seems more than ever solidly entrenched in American law.
The Lawsuit
In 2018 a group of Republican state attorneys general, led by Texas, and two individuals sued to invalidate the ACA. They claimed that in 2012 the Supreme Court had held in NFIB v. Sebelius that Congress lacked the constitutional authority to enact the ACA’s individual mandate as a legal mandate, but could impose a tax on people who failed to comply. In 2017, Congress reduced the amount of the tax penalty to zero. The plaintiffs contended, therefore, that the mandate is no longer a tax and completely unconstitutional. Moreover, they argued that without the mandate the entire remaining ACA had to be invalidated. The U.S. Department of Justice, in a most unusual move, refused to defend the ACA.
Instead, the ACA was defended by a group of Democratic attorneys general, led by California, and by the U.S. House of Representatives. They rejected the plaintiffs’ arguments and additionally contended that the plaintiffs had no standing to bring the case because they had not been injured by the toothless mandate. A federal district court judge ruled for the plaintiffs in 2018 and the Fifth Circuit partially affirmed in 2019.
The Ruling
The challenge did not get off the ground. The majority opinion held that neither the individuals nor the state plaintiffs had “standing” to challenge the mandate or the remainder of the ACA. Under the U.S. Constitution, federal courts may only decide “cases” or “controversies.” They have no authority to render abstract advisory opinions on the validity of a law. To establish standing, a plaintiff must show an actual injury that is traceable to an invalid law and can be redressed or remedied by the courts.
The Court held that with the removal of the tax penalty for noncompliance, the mandate was unenforceable against the plaintiffs. Moreover, any injury caused by the mandate was not “redressable.” Since the mandate could not be enforced, the Court could not enter an order prohibiting its enforcement, and a simple declaration that the law was invalid would be an advisory opinion.
The Court also found that Texas and the other Republican states lacked standing to challenge the law. The state plaintiffs claimed they were indirectly injured by the mandate because it would cause more people to enroll in Medicaid or state employee programs. They provided no evidence showing, however, that increased enrollment was traceable to the unenforceable mandate; the Court stated that “neither logic nor intuition” supported their argument. Texas also asserted that it would bear increased direct costs because of ACA reporting and administrative requirements, but the Court found that these costs were not caused by the mandate and would remain even if it were struck down.
Justices Alito and Gorsuch dissented, expressing frustration that the Court was saving the ACA a third time. They would have found that Texas had standing because it was harmed by ACA provisions that are enforced by the federal government and allegedly inseverable from the mandate, that the mandate was unconstitutional, and that at least some provisions of the ACA should be invalidated. They opined that since the Court had not reached the merits, another plaintiff with standing could challenge the ACA again.
What Is Next?
Although a future challenge is possible, given the Court’s decisive rejection of the case by a strong majority, the increasing public support for the ACA, the millions of people who enjoy the benefits of the law, and the absence of an active political effort to repeal it, the law should be secure for the foreseeable future.
This does not mean that specific provisions will not be challenged. Federal district court Judge O’Connor, who ruled that the Affordable Care Act was invalid initially, has questioned the constitutionality of the ACA’s preventive services mandate in another case. Litigation continues with no foreseeable end on whether religious employers must cover contraceptives without charge for their employees. New ACA regulations emerging from the Biden administration are almost certain to be challenged by Texas and other Republican states.
The Court’s decision does raise the question of how much patience it has for state challenges to federal laws and regulations. In the future, federal courts may be less willing to adjudicate essentially political disagreements between states and the federal government regarding federal law.
In any event, it is now time to improve on the ACA rather than fear its demise.
