Late on Friday, a federal judge in Texas ruled in favor of a lawsuit arguing that the Affordable Care Act, a.k.a. Obamacare, was unconstitutional. The theory of this case was that the individual mandate acts an “unseverable” part of the ACA, and so when Republicans repealed the individual mandate penalty as part of their tax cuts in late 2017, it rendered the entire ACA moot.
This argument on the face of it may seem to have merit. When the law was passed, the mandate was indeed viewed as central to the ACA by myself and other architects of the sweeping legislation. We described the ACA as a “three- legged stool,” which struck down costly discrimination by health insurers in return for ensuring everyone that participated in the insurance market through a mandate. Compulsory coverage makes the benefit more affordable because the healthy and sick are pooled together.
Striking down the mandate penalty undoubtedly weakened the ACA. It has led to some healthy individuals deciding not to buy insurance; instead they have been “free riding” on the system and counting on the emergency room to take them if they do get sick. This has raised rates for those who do want to buy coverage in the state exchanges, leading to even further erosions of coverage.
But it has become clear that the law can survive in a weakened form without the mandate. About two-thirds of the gains in coverage from the ACA comes through its Medicaid expansions, and many of those eligible for Medicare were never even subject to the mandate penalty. And the vast majority of individuals buying insurance in the state exchanges are doing so with government-provided tax subsidies that cap the individual cost of insurance as a percentage of income. As a result, low income individuals in the exchanges are protected from rising premiums. So in fact, it turns out that the mandate is not “unseverable” from the law.
This is why virtually all objective observers viewed this lawsuit and ruling as ridiculous. Even diehard opponents of the ACA who supported previous lawsuits have pointed out that there is no legal basis for this ruling. The reason is simple: Congress was faced with this very decision, and they decided not to repeal the ACA, but rather to keep it in place with the mandate penalty removed. Congress has spoken on this matter: the mandate is severable. The Texas ruling is therefore clearly exposed as a political statement by Republican-appointed justices.
This case will now likely proceed to the US Supreme Court. If any sense of proper legal process prevails, the decision will be overturned. But the Supreme Court does not represent anything close to the mainstream legal view on matters such as this. After all, before the 2012 decision on the legality of the individual mandate, the vast majority of constitutional scholars said that the mandate was clearly legal. Yet five justices voted that it was not, and the mandate was only saved by being relabeled as a tax by Chief Justice John Roberts.
And if the Supreme Court does support this heinous decision, it will have dire consequences for the health of our citizens. Even though the Trump administration has significantly weakened the ACA, 17 million Americans have gained coverage through the law. Perhaps more importantly, the estimated 133 million Americans with a pre-existing condition have access to affordable coverage should they need it. If this law is struck down, we will return to the bad old days where insurers could deny coverage to individuals who are ill, or charge them many times more than the healthy.
That’s not all that will be lost with a repeal of the ACA. Children will no longer be protected by their parents’ insurance plans until age 26. Insurers will be able to once again limit how much healthcare spending they cover in any year, and there will no longer be a cap on what individuals have to spend out of pocket on their medical costs. Millions of Americans who don’t read the fine print of their insurance contracts could once again buy insurance that leaves them with tens of thousands of dollars in uncovered medical bills.
But it isn’t just the health of our citizens that is at risk here – it is the health of our democracy. We have a law that was first passed when Democrats controlled both houses of Congress and the presidency. It was then thoroughly reviewed, debated, and voted on when the Republicans controlled both houses of Congress and the presidency.
The Republicans decided that the proper outcome was an ACA with no mandate, and the outcome of that process was a weaker but still functional ACA. If the courts overturn this outcome, it is an attack on the very process of representative government in the US.
Jonathan Gruber is the Ford Professor of Economics at MIT and was a consultant to the Obama administration and Congress on the Affordable Care Act.