Michael W. McConnell is the Richard and Frances Mallery professor of law and director of the Constitutional Law Center at Stanford Law School and a senior fellow at the Hoover Institution. He formerly served as a judge on the U.S. Court of Appeals for the 10th Circuit.
A health-care case in federal district court in Texas has emerged as one of the focal points in the confirmation hearings for Supreme Court nominee Judge Brett M. Kavanaugh. Sen. Sheldon Whitehouse (D-R.I.) sought assurances from Kavanaugh on Wednesday that he would vote to uphold the constitutionality of the provision of the Affordable Care Act that requires health insurance companies to cover people with preexisting conditions. The disruptive demonstrators in the room have made this issue one of their screaming points.
Quite properly, Kavanaugh declined to provide the requested assurance. He could be asked to rule on the case if it reaches the Supreme Court. It is a pity that Kavanaugh could not weigh in, because the answer is, or should be, clear. The Texas lawsuit is borderline frivolous. I say that even though the Justice Department, for reasons that escape me (unless they are purely political), has declined to defend the Obamacare law on this point.
As it happens, oral arguments in the case also took place on Wednesday. The suit was filed by Texas Attorney General Ken Paxton, joined by most of the Republican state attorneys general. Their theory is that Congress’s repeal of the tax penalty for failing to enroll in Obamacare, which was part of last fall’s tax-reform bill, renders the health-care legislation unconstitutional in its entirety. I am no fan of the Affordable Care Act on its economic merits, but this legal argument makes almost no sense.
No one doubts that the preexisting-conditions rule (also called “guaranteed issue”) is within Congress’s power under the commerce clause. The constitutional issue that roiled the Supreme Court a few years ago was whether Congress had the power to compel individuals to purchase insurance, a private product, from a private business. In a complicated and not very persuasive 5-to-4 decision, the court held that Congress could not impose this mandate under the commerce clause because no “commerce” was being regulated, but that the legislation could be interpreted to mean that the penalty for failing to buy approved insurance was a tax, which falls within Congress’s broad taxation power.
The Obama Justice Department conceded that if the mandate were struck down, the preexisting-conditions rule would also have to go, based on the legal doctrine of “severability.” When part of a statute is ruled unconstitutional, the doctrine holds, the courts will invalidate the entire law if Congress would have been unlikely to have passed the rest of the law without the part that is unconstitutional. The preexisting-conditions rule falls into that category, because insurance companies would be driven into a death spiral if they were required to cover the already ill while healthy customers could refrain from buying insurance.
In the Texas case, the plaintiff states’ theory is that now that there is no “tax” for failing to buy approved insurance, the entire mandate is unconstitutional, because the court has already concluded that the mandate could not be supported under the commerce clause. In itself, that makes no practical difference; the mandate is not being enforced. But the plaintiffs also argue that, following the severability analysis from the first go-round, which remains valid, the preexisting-conditions rule must be invalidated, because Congress would never have enacted that rule without also enacting a mandate. No mandate, no preexisting-conditions rule.
The argument has an obvious fallacy. The insurance purchase mandate, in the form of a tax, has not been held unconstitutional. It was repealed by Congress. (Technically, the amount of the tax was set at zero.) There is no severability principle for laws that have been repealed in part by Congress. When Congress repeals part of a statute, it is totally up to Congress whether to repeal the remainder. When Congress decided to eliminate the Obamacare tax penalty, it debated whether to repeal the rest of the statute (remember “repeal and replace”?), but the Republicans did not have the votes for that. Congress has therefore made its decision, and there is no need for the courts to guess what it would do — the lawmakers retained the preexisting-conditions rule even while repealing the only enforcement mechanism for the purchase mandate.
During oral arguments in Texas, U.S. District Judge Reed O’Connor seemed impressed with the fact that the “mandate,” in Section 5000A of the Affordable Care Act, remains in place, albeit with no enforcement mechanism and no penalty (or tax) for noncompliance, and suggested that this toothless provision is not within Congress’s power under the commerce clause. There are two problems with that argument. First, Congress does not need constitutional power to enact toothless provisions. Unless violators suffer some kind of penalty, there is no real law but only a recommendation — and Congress can make recommendations about whatever it wishes. Second, Congress chose to eliminate the penalty but not to repeal the preexisting-conditions rule, which was its right. That pair of decisions may have been economically disastrous for the insurance companies, but it is not the job of the courts to clean up Congress’s bad judgments.
I personally have no clue how Kavanaugh would vote in the unlikely event that this dog of a case makes it to the Supreme Court. But he is a good judge and a reasonable person. If he voted to accept the Texas argument, I would be gobsmacked.