On Monday, the Supreme Court took the unusual step of granting extended argument time to the parties in Texas v. California, the latest Obamacare case to be reviewed by the Court. The order grants an additional ten minutes to each side. It also splits the argument time four ways. California will have 30 minutes to defend the statute, with the House of Representatives having an additional ten minutes of argument time. Texas and the Solicitor General’s Office will have twenty minutes to argue that the Affordable Care Act is unconstitutional after all.
The Supreme Court’s grant of more time signals both the importance and complexity of the latest challenge to Obamacare–which will be argued the week after the presidential election.
At the crux of the case is Texas’s contention that the individual mandate, which requires individuals to purchase health insurance, is unconstitutional. Texas argues that because Congress zeroed out the penalty for failing to purchase insurance in the Tax Cuts and Jobs Act of 2017, the mandate can no longer be sustained as an exercise of the Taxing Power.
Texas has a good argument. Recall that, way back in 2012, the Supreme Court upheld the individual mandate, but only after straining to interpret its “penalty” provision to be a “tax.” And in words that may come back to haunt the Court, the majority wrote that the individual mandate was a “tax” because it satisfied “the essential feature of any tax:” “it produce[d] at least some revenue for the Government.” Today, that is no longer true.
The case also raises questions about whether, if the Court determines that the individual mandate is unconstitutional, the provision is severable from the rest of the ACA or whether the entire statute must fall. The federal government has taken various positions but now insists that the entire statute must fall. The question is one of congressional intent, however, and while the government may be correct that Congress initially viewed the individual mandate as indispensable to the ACA’s operation, Congress left in place the rest of the ACA when it zeroed out the penalty, possibly suggesting Congress did not view an operational individual mandate as critical to the statute’s authorization.
At the end of the day, it is doubtful that the Court that has twice bent over backwards to save the individual mandate (once by interpreting the individual mandate’s “penalty” to be a “tax,” and once by finding that the statutory phrase “an Exchange established by the State” actually meant “an Exchange established by the State or the Federal Government”) will strike down the entire statute. Then again, maybe the third time’s the charm.