The early years of the ACA were fraught with existential threats. Plans were laid to repeal or defund it. Litigation challenged the validity of various aspects of the law, going all the way to the Supreme Court in a couple of cases. And yet it has survived, more or less intact.
But then something curious happened late last year. Buried within a massive package of federal tax reform legislation was a short provision that eliminated the tax penalty associated with the ACA’s “individual mandate” but left the mandate itself on the books. It was effectively a repeal of the mandate (would anyone obey speed limits if the police said they would never issue speeding tickets?), but for reasons related to legislative procedure, the mandate technically remained.
Why does this matter?
In 2012, the Supreme Court was asked to rule on the constitutionality of the ACA’s individual mandate. The challengers argued that Congress did not have the authority under the U.S. Constitution to require Americans to purchase health insurance coverage. The Supreme Court agreed with them but went on to say that the mandate was still okay, because Congress does have the authority to impose taxes, and the individual mandate was a type of tax.
But now there’s no longer any tax. Just the mandate.
See the problem?
A number of states saw the problem too and have brought yet another lawsuit challenging the validity of the individual mandate. They might have a good argument.
But what does it matter if a toothless provision of the ACA is invalidated?
The answer is a word we’re likely to hear a lot more about in the coming months: Severability.
The argument is that the individual mandate is central to the overall objectives of the ACA (bringing more people into the insurance pool and lowering costs by spreading them across that larger pool). Because of this close relationship between the mandate and the rest of the law, the remaining provisions of the ACA cannot stand on their own without the mandate.
In other words, the individual mandate is not “severable” from the rest of the ACA, so if the individual mandate is invalid, the entire ACA is invalid—or at least big chunks of it.
The lawyers representing the U.S. government in this latest round of litigation filed a brief recently, saying they agreed the individual mandate was invalid. The brief also said that it was not severable from some key provisions of the ACA, including a provision that requires certain premiums to be set without regard to an individual’s health and a provision that requires coverage to be available without regard to an individual’s health.
The government’s lawyers did not go so far as to say the entire ACA would be invalid without the individual mandate. For example, the employer mandate and employer reporting requirements would still remain (sorry). But, if the court accepts their position, it would be a significant change in the way the ACA currently operates.
We are still a long way from resolving this latest battle over the ACA. Whatever the court decides, there are likely to be appeals, perhaps including another trip to the Supreme Court. It is thus premature to declare the ACA on the brink of extinction again. However, there are certainly some fresh headwinds starting to blow, and we will be watching with interest to see whether they develop into a full storm.