The first time Obamacare supporters had their day in court, the law largely survived. Could another lawsuit to overturn the law prove more successful? And would that be a good thing, at this point?
Texas v. Azar is the latest legal challenge to the Affordable Care Act, commonly known as Obamacare. The state of Texas – joined by 17 others, including Georgia – is seeking to have the law declared unconstitutional because of the very legal reasoning that allowed it to be upheld in 2012.
In that first case, a 5-4 majority of the U.S. Supreme Court led by Chief Justice John Roberts ruled the ACA’s individual mandate passed constitutional muster because it amounted to a tax, and Congress has wide latitude to impose taxes.
That was the crux of the lawsuit because the mandate was seen as crucial to making the rest of the law function. That proved false: The ACA’s heavy-handed regulation of insurance plans led many Americans to conclude they were better off paying the tax penalty than to buy a plan with both a high premium and a high deductible.
That’s moot now. The Republican-led Congress in late 2017 reduced the penalty for not complying with the mandate to $0. That led to the current lawsuit, which argues the ACA must not be constitutional anymore now that the tax is gone.
A federal district judge earlier this year ruled in Texas’ favor, and this past week the Fifth Circuit U.S. Court of Appeals heard the case. However the appeals court rules, it’s possible the case will make it to the Supreme Court.
Predicting how that might go – and whether Roberts would view this lawsuit as springing a trap he laid seven years ago, or as a cheeky poke in his eye – is a fool’s errand. But we can calm some of the fears about what would happen if the lawsuit succeeds.
Eliminating the ACA would amount to a big do-over. The actual number of people who truly can’t get insurance because of their medical conditions is quite small: as low as 2% to 3% of the population according to some estimates. They can and should get direct help with their coverage. But the authors of the ACA instead decided to remake the market in hopes of helping them.
That has wreaked havoc for a larger number of Americans. Millions have learned just how hollow was President Obama’s infamous promise that “if you like your plan, you can keep your plan.” For many, receiving a notice that their current plan is being discontinued has become an unwelcome annual ritual.
Even those who can find a plan they like, or at least deem acceptable, have been paying unacceptably high premiums for them. And while Democrats circa 2009-10 derided cheaper insurance as “junk plans” that didn’t provide many benefits, now consumers in the individual and small-group markets are faced with expensive junk plans that require them to also pay large deductibles before receiving many benefits. This is a direct result of the law’s attempt to help those with pre-existing conditions by making other insured persons pay more for their own plans.
To the extent state governments were asleep at the switch prior to the ACA, they’ll have no such excuse this time. Many states are already working on proposals to waive certain aspects of the ACA; if the law goes away, they’d be able to implement many if not all of those changes without asking for Washington’s permission.
Georgia in particular is knee-deep into that work. Much of the uncertainty Gov. Brian Kemp’s administration faces concerns how far federal bureaucrats will let them go. Take away the ACA framework, and the Kemp team can make those decisions for themselves, based on what’s best for Georgians.
Odds are, the ACA isn’t going to be thrown out by the courts now. But on the off chance it is, don’t believe all the scare stories being told about what would happen next.
• Kyle Wingfield is president and CEO of the Georgia Public Policy Foundation: www.georgiapolicy.org.