If you’re covered by ObamaCare health insurance you can relax. It’s not going away anytime soon.
Federal Judge Reed O’Connor recently declared ObamaCare was unconstitutional. The ruling came as a result of 20 state attorneys general who sued because they believed the Affordable Care Act’s Individual Mandate is no longer legal. The judge ruled in their favor – and then declared the whole law unconstitutional without the Individual Mandate.
This issue was reviewed in 2012 by the Supreme Court when the Obama administration was challenged even before the new healthcare law was implemented. The Individual Mandate was considered the financial lynchpin of the law because it coerced Americans to purchase healthcare insurance – which the architects of the law felt was necessary to fund the system. However, they denied it was a tax and insisted it was simply a penalty for non-compliance.
Chief Justice John Roberts of SCOTUS broke a tie by declaring the law constitutional – but only if the Individual Mandate penalty was actually a tax. He said the government had a right to tax those who failed to comply with the Individual Mandate – even if the Democrats who passed the law insisted it wasn’t a tax!
This controversial ruling has always been a stumbling block for acceptance of the law and when the Trump administration pushed repeal of the mandate, which Congress passed along with the tax reform legislation of 2017, it gave Republicans the excuse they were looking for to challenge the law in court.
Legal Issues to Overcome
The Wall Street Journal editorial board says Texas Attorney General Ken Paxton argued in Texas v. U.S. that since Congress has repealed the mandate, the tax is no longer a tax, and ObamaCare is thus illegal. Judge O’Connor agreed with that logic. However, one legal complication is that Congress in 2017 repealed the financial part of the Individual Mandate, not the structure of the mandate itself. Republicans used budget rules to pass tax reform so they couldn’t repeal the mandate’s express language.
There is also something called reliance interests to consider. Because the law has been operating since 2014, there are millions of Americans who currently rely on the law for their healthcare insurance. These interests argue against judges repealing the law by fiat.
Then there is the issue of severability. This doctrine calls for restraint in declaring an entire law illegal merely because one part of it is. The WSJ believes even the right-leaning Fifth Circuit Court of Appeals (Texas) judges will overturn Judge O’Connor on this point.
Therefore, there is little reason for panic if you are covered by ObamaCare. The law remains in effect while this judge’s ruling is appealed to the Fifth Circuit Court and there is good reason to believe the ruling will be overturned.
Democrats will use this ruling to pound Republicans for denying health insurance for pre-existing conditions if the law is overturned – when that was never their intention. But this demagoguery was quite effective in the Mid-term elections.
Republicans must beware a panic reaction that leads them to comprise their interests in improving on ObamaCare by striking a deal with Democrats that reinforces ObamaCare. It is still a poor healthcare system that needs replacing.