Celebration of Obamacare’s Death Is Again Premature

(Bloomberg Opinion) -- After a midterm election that seemed poised to finally grant Obamacare some hard-won stability, the health-care law is in legal jeopardy again. But just how much of threat does it face?

A Texas judge ruled late Friday that the Affordable Care Act is unconstitutional, siding with a group of Republican state attorneys general who initiated the suit in hopes of striking down the law in court. President Donald Trump took to Twitter in celebration mode:

While the ruling sounds dire and could theoretically leave millions of Americans without health insurance, it probably won’t. It’s generous to call the GOP’s legal argument in this case soft, and the win is mostly attributable to a hand-picked conservative judge. The ruling will be appealed, and will likely be overturned. In the meantime, the insurance exchanges through which individuals can obtain coverage under Obamacare seem set to remain open for business. 

There is a small risk that the ruling will be upheld and the ACA will collapse, or that a narrower ruling will kill protections for pre-existing conditions. But the ACA has survived more intellectually robust legal threats, and anyone celebrating its death is doing so prematurely. 

The Republicans’ argument centers on Obamacare’s requirement for all Americans to obtain health insurance, known as the individual mandate. The attorneys general hold that because Congress last year eliminated the penalty for not having insurance, the individual mandate can no longer be considered a tax and is therefore unconstitutional. And because the individual mandate is so key to the law, the whole thing must be unconstitutional, too. 

That is a rather shaky legal and logical basis to tear up the entire law, including the expansion of Medicaid and protections for people with pre-existing conditions. 

The concept of severability — whether part of a law can be struck down on its own or must take the rest with it — generally rests on a interpretation of congressional intent. Congress has explicitly said that it thinks the ACA can and should exist even without a federal individual mandate; it voted to do precisely that last year. That seems like the precedent that should be looked to. Instead, this judge chose to rely on a creative interpretation of congressional intent when it first passed the law in 2010.

The case will eventually make its way to the Fifth Circuit and potentially to the Supreme Court. Either or both courts could surprise, and recall that the Trump administration — which backs key parts of the suit — has appointed a lot of judges. But on the merits, it’s hard to imagine that this will be the case that ends the ACA. At the end of the day, many judges are hesitant to strip access to insurance from millions of people without a pretty good reason. 

There are plenty of other threats to the law’s stability, including questions around whether insurers will continue to enter markets and lower rates in the face of weaker enrollment. The administration is also pushing the idea, however legally dubious, that states should be able to apply the ACA’s insurance subsidies to skimpy plans, which would cause a mess. 

But looking past the headlines and celebratory tweets, this lawsuit remains a desperate flyer of a case that should fall apart under any kind of objective judicial scrutiny. 

To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Max Nisen is a Bloomberg Opinion columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

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