Obamacare Thrown Out by Judge, Raising Insurance Uncertainty

(Bloomberg) -- Obamacare was struck down by a Texas federal judge in a ruling that casts uncertainty on insurance coverage for millions of U.S. residents.

The decision Friday finding the Affordable Care Act unconstitutional comes just before the end of a six-week open enrollment period for the program in 2019 and underscores a divide between Republicans who have long sought to invalidate the law and Democrats who fought to keep it in place.

U.S. District Judge Reed O’Connor in Fort Worth agreed with a coalition of Republican states led by Texas that he had to eviscerate the Affordable Care Act, the signature health-care overhaul by President Barack Obama, after Congress last year zeroed out a key provision -- the tax penalty for not complying with the requirement to buy insurance. The decision is almost certain to be appealed all the way to the Supreme Court.

“Today’s ruling is an assault on 133 million Americans with preexisting conditions, on the 20 million Americans who rely on the ACA’s consumer protections for health care, and on America’s faithful progress toward affordable health care for all Americans,” California Attorney General Xavier Becerra said in a statement. A spokeswoman for Becerra said an appeal will be filed before Jan. 1.

Texas and an alliance of 19 states argued to the judge that they’ve been harmed by an increase in the number of people on state-supported insurance rolls. They claimed that when Congress repealed the tax penalty last year, it eliminated the U.S. Supreme Court’s rationale for finding the ACA constitutional in 2012.

“The remainder of the ACA is non-severable from the individual mandate, meaning that the Act must be invalidated in whole,” O’Connor wrote.

I wonder if this is similar to when the Obama administration would not defend the Defense of Marriage Act. If the Trump administration signals to the court that it will not defend Obamacare, it might be that the court can let the matter drop. If I recall correctly, at the time, Roberts was reasoning to the effect that the people elect Congress to pass the laws, and that the Court was reluctant to second guess Congress. Now though, if neither Congress nor the Trump Administration will defend Obamacare, maybe Roberts will consider the Obama refusal to defend DOMA as a precedent.

I had noticed the intent of the California AG to appeal but thought of the Supreme Court decision in Hollingsworth v. Perry. This was the gay marriage case arising from Proposition 8. The district court held Prop 8 as unconstitutional and the state refused to appeal. The Supreme court ruled that the proponents of the proposition did not have standing to appeal either to the 9th Circuit or to the Supreme Court which resulted in the district court decision being the final decision.

This case is based on a federal statute where Hollingsworth originated from a state constitutional provision but the issue of standing should be the same. Since Hollingsworth held that only the state had standing to appeal, a case could be made that on a federal case, only the Justice Department would have standing. The various state attorney generals should have no greater standing than the proponents of Proposition 8.

Obamacare was held to be constitutional as a tax, in 2012, on a 5-4 vote. Chief Justice Roberts held it was constitutional only because of its tax provision, and was joined by the four liberals who held that it was constitutional with or without the tax. This is called a “plurality” decision, and the only binding part of such a decision is what is agreed in BOTH the decision of the court (written by Roberts) AND in the concurring decision (agreed by the four liberals).

The tax was ended and, so, Obamacare is no longer constitutional. This is pretty clear.

The case will make its way to the Supreme Court and we can anticipate the the new lineup (with Scalia and Kennedy replaced by Gorsuch and Kavanaugh) will feature the same 4 to 4 among the liberals and conservatives, and that Roberts will again cast the tie-breaking vote. Who the hell knows what he will come up with, this time.

Supposing he continues to rule that Obamacare was only constitutional because of the now eliminated tax, the former, state-run system would be restored. Except that system is gone. Some equitable arrangement would have to be provided, such as all contracts currently in place are deemed legal, while states are allowed to re-invigorate their jurisdiction over health insurance at their pace providing they take no more than three years.

The Democrats will of course make re-invigorating Obamacare a focus of the 2020 elections. Perhaps they will honest this time and say if you like your plan, f your plan, and if you like your doctor, f your doctor. And, all that most working class people (you now, the deplorables) is that their out-of-pocket will increase by an average of $12,000 per year.

BTW this now closes the book on the last remaining legacy of Obama. It took us a while, but the body politic passed him like a gallstone.

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