The Supreme Court rejected a long-shot bid to overturn the Affordable Care Act on Thursday, once again saving the landmark health care law from Republican attempts to dismantle and destroy it. The 7–2 ruling is a strong sign that the court’s conservative supermajority won’t pose an existential threat to the ACA in the future, and perhaps even an indication that years of major legal struggles over the law may finally be winding down.
Texas and a group of other Republican states, along with two individual plaintiffs, had asked the courts to overturn the entire ACA on a technicality after Congress set the penalty for not buying health insurance under the individual mandate to zero. Lower courts had ruled in their favor. But the Supreme Court ruled that because there was no longer a penalty for noncompliance, the plaintiffs hadn’t suffered an injury that would give them standing to challenge the law.
“Their problem lies in the fact that the statutory provision, while it tells them to obtain that coverage, has no means of enforcement,” Justice Stephen Breyer wrote for the court. “With the penalty zeroed out, the IRS can no longer seek a penalty from those who fail to comply.”
The decision drew scorn from Justice Samuel Alito, who accused the majority of bending the rules to save the ACA from its opponents. “Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two,” he wrote in his dissent, which was joined by Justice Neil Gorsuch. “In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue.”
But his view failed to rally even a majority of his fellow conservatives. Chief Justice John Roberts, as well as Justices Clarence Thomas, Brett Kavanaugh, and Amy Coney Barrett, joined Breyer’s majority opinion in full. “Whatever the Act’s dubious history in this Court, we must assess the current suit on its own terms,” Thomas wrote in a solo concurring opinion. “And, here, there is a fundamental problem with the arguments advanced by the plaintiffs in attacking the Act—they have not identified any unlawful action that has injured them.”
California v. Texas has its origins in the 2017 tax-cut law passed by Republicans in Congress and signed by then-President Donald Trump. Among the law’s provisions was one that targeted a core component of the ACA: the individual mandate for most Americans to buy health insurance. Under the original law, those who didn’t have health insurance were required to pay a penalty to the federal government for violating the mandate.
During the health care debates of 2009 and 2010, the ACA’s proponents argued that the individual mandate was one leg of a “three-legged stool” to reform health insurance. The other two legs were a ban on either denying coverage or raising premiums for patients with preexisting conditions, and subsidies for lower-income and middle-income Americans to buy insurance. Health policy experts at the time advised that without all three requirements working together, the ACA would not be able to reduce health insurance costs and premiums. They further warned that removing one of the stool’s legs could even lead to a “death spiral” in insurance markets.
Republicans have spent the last decade trying to scrap the ACA through a combination of unsuccessful litigation and legislative proposals to “repeal and replace” it that were forever on the way but never arriving. The Supreme Court upheld the constitutionality of the individual mandate in 2012, with Chief Justice John Roberts joining the court’s liberals to interpret the individual-mandate penalty as a tax. Republican efforts to rewrite the law in the summer of 2017 also fell apart after moderates rejected the bill. While GOP lawmakers failed to scrap the individual mandate itself, they included a provision in the tax-cut law later that year to set the mandate’s penalty to zero. (Since that aforementioned death spiral never materialized, most health policy experts now think the rest of the ACA can more or less function without it.)
In 2018, a coalition of Republican-led states led by Texas used the change to mount a new legal attack on the ACA as a whole. In a lawsuit filed against the federal government, the states argued that because Congress had zeroed out the penalty, the individual mandate could no longer be justified as a tax and was therefore unconstitutional. What’s more, they also argued that the individual mandate was so integral to the ACA’s overall structure that if it were struck down, the rest of the law would have to be struck down as well. What Republicans could not accomplish through genuine legislation—the destruction of the ACA—they now sought to do through litigation, passing the buck to judges who wouldn’t have to defend their actions to voters.
Most analysts didn’t expect the lawsuit to gain traction given the flimsy nature of its arguments. Then it was assigned to Judge Reed O’Connor, a George W. Bush appointee to the federal district court in northern Texas. O’Connor is the favored venue for lawsuits by conservative legal activists because he tends to give them what they want in sweeping rulings, and in December 2018, he did exactly what Texas and other GOP-led states hoped he’d do: O’Connor ruled that the individual mandate was now unconstitutional. When courts rule against certain provisions in larger pieces of legislation, they often sever the offending portion and let the rest of the law stand. O’Connor instead opted to strike down the entire law.
His bombshell ruling drew immediate criticism from legal scholars across the ideological spectrum. “We were on opposing sides of the 2012 and 2015 Supreme Court challenges to the Affordable Care Act, and we have different views of the merits of the act itself,” wrote Jonathan Adler and Abbe Gluck, two law professors who played a major role in past ACA-related cases, in a joint New York Times op-ed in 2018. “But as experts in the field of statutory law, we agree that this decision makes a mockery of the rule of law and basic principles of democracy—especially Congress’s constitutional power to amend its own statutes and do so in accord with its own internal rules.”
While on appeal, California and a coalition of Democratic-led states intervened on the ACA’s behalf, filling a void left by the Trump administration’s half-hearted defense of the law. The Fifth Circuit Court of Appeals upheld O’Connor’s ruling in 2019 but ordered him to reconsider whether the entire ACA had to be struck down. The Democratic-led states, in turn, asked the Supreme Court to review the entire matter and uphold the ACA’s constitutionality. The justices agreed to take up the case and set oral arguments for November 10, 2020, one week after the presidential election.
California attacked Texas’s case on two grounds. First, it argued that the states and their residents didn’t have standing to challenge the mandate’s constitutionality. Federal courts are barred from issuing advisory opinions; they can only hear a dispute if there’s an injury to remedy and a remedy to give. In this case, since the mandate’s penalty was set at zero, California argued there was no injury for the courts to fix because nothing would happen. Second, the state argued that the rest of the ACA should pass constitutional muster without the mandate, even if it was struck down.
Texas, for its part, argued that O’Connor’s ruling should be upheld in its entirety, asking the justices to strike down one of the most consequential pieces of legislation passed by Congress this century based on an unsound technicality. Texas also intertwined its standing and severability arguments to dubious effect: Because the state was affected by other provisions in the ACA, and it believed those provisions weren’t severable from the individual mandate, and it also believed the individual mandate was unconstitutional, the states had standing to challenge the individual mandate. Don’t worry if you don’t understand this reasoning after reading it a few times—the problem isn’t on your end.
Breyer, writing for the court, noted that the 2017 changes had not actually burdened the plaintiffs in any way: “They have not pointed to any way in which the defendants, the Commissioner of Internal Revenue and the Secretary of Health and Human Services, will act to enforce [the mandate]. They have not shown how any other federal employees could do so either. In a word, they have not shown that any kind of Government action or conduct has caused or will cause the injury they attribute to [the mandate].”
Legal standing, like a pair of bowling shoes, is always required. Article III of the Constitution requires that federal courts only hear “cases and controversies,” which the courts have taken as a ban on handing down advisory opinions. To challenge an act of Congress, a person must be able to show they were harmed by the law and that the courts can provide them with a remedy to justify the case’s existence.
“The matter is not simply technical,” Breyer wrote, quoting from the court’s past rulings. “To find standing here to attack an unenforceable statutory provision would allow a federal court to issue what would amount to ‘an advisory opinion without the possibility of any judicial relief.’ It would threaten to grant unelected judges a general authority to conduct oversight of decisions of the elected branches of government. Article III guards against federal courts assuming this kind of jurisdiction.”
When the Supreme Court agreed to hear the case last spring, many observers expected that Roberts and the court’s four liberal justices at the time would be able to prevent the entire ACA from being thrown out. Ruth Bader Ginsburg’s death last September altered that calculus, and it wasn’t immediately clear how Justice Amy Coney Barrett would decide the case. The long delay from oral arguments in November to a decision in June also prompted speculation about whether something significant was brewing behind the scenes.
But the court instead decided to state the obvious on Thursday. In doing so, the justices signaled that the ACA is here to stay, despite all the toil and treasure expended by a decade of conservative activists to wreck it. “The plaintiffs failed to demonstrate that the harm they suffered is traceable to unlawful conduct,” Thomas wrote in his concurring opinion. “Although this Court has erred twice before in cases involving the Affordable Care Act, it does not err today.”