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Obamacare Backers See Hope in Roberts Opinion in Non-Health Case

June 30, 2020, 2:27 PM

Chief Justice John Roberts may have assured advocates fighting to save Obamacare that he plans to save the law a second time.

In striking down a provision of the Dodd-Frank Act that protected the director of the Consumer Financial Protection Bureau from being fired and leaving the agency intact, Roberts signaled Monday that he may do something similar with the Affordable Care Act—toss out its mandate to buy insurance without throwing out the entire law, health lawyers say.

The high court’s 5-4 ruling in Seila Law LLC v. CFPB has nothing to do with health care, but it asks the same question that’s central in the fight over former President Barack Obama’s signature health-care law: whether one unconstitutional provision sinks an entire statute.

Dismantling the CFPB “would trigger a major regulatory disruption and would leave appreciable damage to Congress’s work in the consumer-finance arena,” Roberts said in delivering the majority decision.

“Congress would prefer that we use a scalpel rather than a bulldozer in curing the constitutional defect we identify today,” he said.

The chief justice “went out of his way in the opinion to talk about the kind of regulatory disruptions that could occur with an overly aggressive approach to severability, said Abbe Gluck, a professor of law and the founding faculty director of the Solomon Center for Health Law and Policy at Yale Law School.

“That kind of disruption is obviously a fundamental risk in the Affordable Care Act case,” she said.

Disruptions

The justices are expected next term to review a ruling from the U.S. Court of Appeals for the Fifth Circuit that left Obamacare in limbo.

The appeals court ruled the ACA provision that requires everyone to buy health insurance or pay a penalty is unconstitutional. Because the 2017 Congress dropped the penalty to zero, the provision is no longer a valid exercise of Congress’s taxing power, the Fifth Circuit reasoned. Roberts had saved the law in 2012 by upholding the individual mandate as a constitutional tax on those who don’t have health insurance.

But the Fifth Circuit failed to answer a central question in this latest challenge: whether the rest of the law can survive without that one provision.

As the country grapples with the coronavirus pandemic, the Justice Department told the Supreme Court in a June 25 brief the entire law must be thrown out.

If the court sides with the Texas-led, Republican state coalition challenging the law, the Center for American Progress has estimated that 23 million people could lose their health insurance.

Also at stake are dozens of other provisions, including protections for people with pre-existing conditions; requirements that insurers offer essential health benefits like preventative care, hospitalization and prescription drug coverage; the ability for parents to keep adult children on their plans until the age of 26; and the ability of states to expand their Medicaid programs.

“I would be shocked if the chief justice endorses any of the arguments that Texas is making,” said Jonathan Adler, a law professor at the Case Western Reserve University School of Law.

The court’s ruling in Seila Law is further proof that Roberts isn’t interested in issuing decisions that are highly disruptive, Adler said. He noted the chief justice sided with the court’s liberal wing June 18 to save thousands of people who were brought to the country illegally as children from being deported.

In the Seila Law case, “the court embraced the idea that you kick out as little as possible and presume Congress would have wanted more to survive than less,” Adler said. There’s more evidence of that in the Texas case than in this case against the CFPB, he added.

Legislative Text

However, Obamacare challengers say Adler and others are misreading the high court’s ruling.

“The inquiry is not as to the consequence of the ruling, it’s about the text of the statute itself,” said Robert Henneke, the general counsel for the Texas Public Policy Foundation, who’s representing the two individuals challenging the law alongside the GOP state coalition.

This is the second indication in recent weeks of the court’s commitment to follow the statute, he said.

“Let’s not forget the Bostock opinion from last week that soundly rejected legislative intent and extraneous consequences in saying no, the text is the text, is the text, is the text.”

In that decision June 15, Justice Neil Gorsuch and Roberts joined the court’s liberal wing in ruling that anti-discrimination protections in the workplace under Title VII of the Civil Rights Act extend to lesbian, gay, and transgender people.

When it comes to Obamacare, the ACA was clear that the stated goal was universal insurance coverage and the requirement for individuals to purchase insurance was described by Congress as an essential way to achieve that goal, Henneke said.

There is another non-health-care case before the Supreme Court that asks the same question as the Seila Law and Obamacare case.

In Barr v. American Association of Political Consultants Inc., the court is asked to review the constitutionality of an amendment to the Telephone Consumer Protection Act that exempts calls to collect government-owed debt.

The justices may be able to resolve the case without having to reach the question of whether that amendment can be severed from the law if they rule it’s constitutional.

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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