Last week, in a 7:2 decision, the Supreme Court issued its third holding on the Affordable Care Act.
What was the history of this case?
In 2017, the individual mandate penalty was reduced to zero. The Attorneys General of 17 Republican-led states then filed this lawsuit in 2018.
Their claim was that when the penalty, which had been held constitutional as a tax, was reduced to $0 the mandate became unconstitutional. Then, since the law is not severable, that defect would take the entire law down. The judicial remedy they sought was the ending of the law.
When the Trump DOJ refused to defend the ACA and sided with the lawsuit, California and 15 other Democratic-led states took up that role. That is why the name of the case was California v. Texas.
In the first ruling in the case the district court judge agreed with the challenge to the law. On appeal, the mandate was still considered unconstitutional in its new form but severability was not settled. The side defending the law then took the case to the Supreme Court.
Did the Supreme Court hear the case on its merits?
No. It decided the case based on standing.
What is standing?
Someone who wants to bring a lawsuit must show a real relationship to the case and an individualized harm that a court can remedy.
What was the problem that the side opposing the law had in terms of standing?
Neither the states nor the two name plaintiffs were able to show that the mandate injured them, since it was now $0. Writing for the majority, Justice Breyer noted that “Neither the individual nor the state plaintiffs have shown that the injury they will suffer or have suffered is ‘fairly traceable’ to the ‘allegedly unlawful conduct’ of which they complain.”
The red state AG’s actually did realize their standing problem. To try to counter it they asserted that their states were being damaged by people signing up for state coverage, costing them money, because of the mandate.
The response from the majority on that point was that “Neither logic nor evidence suggests that an unenforceable mandate will cause state residents to enroll in valuable benefits programs that they would otherwise forgo.”
What was the result of the lack of standing?
Without standing to bring the case having been found, the Court actually could not address whether the mandate was now unconstitutional and, if so, whether the entire law fell with it.
So, was the law upheld?
In a practical sense, yes, in that it was preserved. However, it was actually not reviewed and so was not upheld on the merits.
Can there be another case against the ACA?
The current make-up of the Supreme Court suggests that it would be amenable to ending the law, but as a practical matter the avenues for another challenge are likely exhausted.
The fundamental issues that attracted challenges over the past decade are the subsidies and the mandate.
The subsidies were upheld in 2015 in King v. Burwell, and the current ruling indicates that no one would now have standing to contest the mandate.
It is difficult to imagine another issue that would have a centrality to the law sufficient to either end it directly or to invoke non-severability.