The case, California v. Texas, is the result of a change to the health law made by Congress in 2017. As part of a major tax bill, Congress reduced to zero the penalty for not having health insurance. But it was that penalty – a tax – that the high court ruled made the law constitutional in a 2012 decision, argues a group of Republican state attorneys general. Without the tax, they say in their suit, the rest of the law must fall, too.
After originally contending that the entire law should not be struck down when the suit was filed in 2018, the Trump administration changed course in 2019 and joined the GOP officials who brought the case.
Here are some key questions and answers about the case.
What are the possibilities for how the court could rule?
There is a long list of ways this could play out.
The justices could declare the entire law unconstitutional – which is what a federal district judge in Texas ruled in December 2018. But legal experts say that’s not the most likely outcome of this case.
First, the court may avoid deciding the case on its merits entirely by ruling that the plaintiffs do not have “standing” to sue. The central issue in the case is whether the requirement in the law to have insurance – which remains even though Congress eliminated the penalty or tax – is constitutional. But states are not subject to the so-called individual mandate, so some analysts suggest the Republican officials have no standing. In addition, questions have been raised about the individual plaintiffs in the case, two consultants from Texas who argue that they felt compelled to buy insurance even without a possible penalty.
The court could also rule that, by eliminating the penalty but not the rest of the mandate (which Congress could not do in that 2017 tax bill for procedural reasons), lawmakers “didn’t mean to coerce anyone to do anything, and so there’s no constitutional problem,” University of Michigan law professor Nicholas Bagley said in a recent webinar for the NIHCM Foundation, the Commonwealth Fund, and the University of Southern California’s Center for Health Journalism.
Or, said Bagley, the court could rule that, without the tax, the requirement to have health insurance is unconstitutional, but the rest of the law is not. In that case, the justices might strike the mandate only, which would have basically no impact.
It gets more complicated if the court decides that, as the plaintiffs argue, the individual mandate language without the penalty is unconstitutional and so closely tied to other parts of the law that some of them must fall as well.
Even there the court has choices. One option would be, as the Trump administration originally argued, to strike down the mandate and just the pieces of the law most closely related to it – which happen to include the insurance protections for people with preexisting conditions, an extremely popular provision of the law. The two parts are connected because the original purpose of the mandate was to make sure enough healthy people sign up for insurance to offset the added costs to insurers of sicker people.
Another option, of course, would be for the court to follow the lead of the Texas judge and strike down the entire law.
While that’s not the most likely outcome, said Bagley, if it happens it could be “a hot mess” for the nation’s entire health care system. As just one example, he said, “every hospital is getting paid pursuant to changes made by the ACA. How do you even go about making payments if the thing that you are looking to guide what those payments ought to be is itself invalid?”