Death and Taxes
What if I told you there’s a new Civil War brewing at the Supreme Court? What if I told you that there are vast armies of U.S. states on each side, staring each other down across the battlefield of the courtroom? What if I told you that the result of their conflict could potentially change the lives of every American citizen?
When the time came, would you know which side you were on? Would you be prepared? Would you have any idea what I’m even talking about?
If you answered no to any of those questions, don’t worry. You’ve got some time to get ready for this one. And the best way to do that is, as always, to do exactly what you’re doing right now. Sit back, relax, and join me for another Impartial Review.
This week, we’re looking ahead to next term, at a monumental case known as California v. Texas.
Yes, you read that right—California versus Texas. Two of the largest and loudest American states, doing battle in the Supreme Court. In one corner, the liberal juggernaut from out West—always progressive, always controversial, always pushing the envelope. And in the other corner, the staunch, conservative firebrand of the Midwest, a place where the sun is hot and justice is still done by lethal injection.
That would be the pitch if this were a heavyweight prizefight. But in reality, this case is much bigger than just California and Texas. In reality, there are huge coalitions of American states on both sides of the issue. At the time of this writing, California comes to the ring flanked by at least 18 other states. Texas has at least 17 more in its corner. Each side is also joined by dozens upon dozens of amici, including powerful organizations like the American Cancer Society, AARP, and the U.S. House of Representatives.
A map of the states on both sides of the case.
(c) Thesavagenorwegian, image courtesy of Wikimedia Commons
This is going to be a big one, maybe the biggest and most controversial case that the Court will hear next term.
Now, you’re a twenty-first century citizen of the world, so you don’t need me to tell you that everything these days is competing to be the biggest or the most controversial (or both), but in this case, it’s not hyperbole.
Before we get into the weeds, let’s (somewhat) briefly look at why.
Ok, you might be thinking, so California and Texas are fighting, but so what? Nothing new there.
After all, California and Texas are always fighting, aren’t they? They’re a lot like one of those old married couples who ended up together even though they share next to nothing in common, and whose extended family falls into an uncomfortable silence whenever they bicker at the dinner table about capital punishment or immigration reform or the scope of the Second Amendment.
But this time is different. This time we’re dealing with something more serious than a mere difference of opinion. This time the subject of debate is a law that will affect (either directly or indirectly) every single American citizen, not just in Texas and California, but everywhere. And this time, the other guests at the dinner table (loud, boisterous New York; prim, proper Virginia; North Dakota, the bearded recluse at the end of the table) can’t just sit quietly and wait for the argument to pass. No, this time, most of the family has been dragged into the fight.
So what are they all fighting over?
Well, only one of the most contentious pieces of federal law passed in the last century (yes, I’m coming in hot with the hyperbole this week). That piece of federal law is officially called the Patient Protection and Affordable Care Act, or, the ACA, but you may know it by its pithy nickname: Obamacare.
Now, before we get into that, let’s talk shop.
If you’ve read any of the posts on this blog before, you know by now that I don’t care what you think about the ACA. You might love it, you might hate it, you might not care much about it at all. Awesome. Those are called opinions, and we’re all entitled to them. But our opinions aren’t facts and they aren’t law, so they have no real place in this discussion. I’m not going to offer you any of my opinions and I’m not going to ask you for any of yours. We’re going to talk facts and law and we’re going to leave our prejudices, our beliefs, and our politics at the door.
Deal?
Oh, one more thing:
Let’s just come together and acknowledge that no matter what we think about the ACA, none of us has ever actually sat down and read the damn thing from cover to cover. Why not? Well, mostly because it’s 900+ pages of legalese and technical jargon, the majority of which doesn’t even come close to touching on anything we care about. It’s ok, we’re not alone. Members of Congress have repeatedly admitted to not reading the entire text of certain proposed laws, and they’re the people who end up voting on whether those laws get passed. (If you’re one of the handful of people who have actually read the whole ACA, please accept my sincerest apology. Please also do yourself a favor and go outside.)
That said, for everyone’s benefit (mine included) let’s just briefly recap the ACA, and talk about what it does and doesn’t do, as well as why it’s still so controversial now, more than a decade after it was first passed.
President Obama signing the Affordable Care Act into law, March 23, 2010.
At the most basic level, the ACA was created to, in the words of Chief Justice Roberts, “increase the number of Americans covered by health insurance.” That’s a pretty uncontroversial goal. I mean, all things considered, it would be nice if all American citizens could afford good, quality health insurance, right? But the problem for the ACA, and the reason it became such a hot-button, political issue, is the methods it used to reach that goal. We’re not going to talk in detail about all of those methods (900 pages, remember?), but let’s cover the big ones.
The ACA, in its quest to provide insurance for all, did the following:
1. Permitted states to use federal funding to expand their Medicaid programs to provide insurance to more individuals at or around the federal poverty line;
2. Created state-based healthcare exchanges which allowed people and small businesses to purchase insurance at rates based on their income, with federal subsidies to help offset the cost; and
3. Established a penalty for people who did not buy health insurance in the new federal insurance system,—this penalty was called the individual mandate.
Now, you can probably see the problem that many people had with this system. The ACA structure effectively creates an arrangement where healthier, wealthier Americans (and corporations) often end up paying more for insurance (either via taxes or through increased premiums) than they might ordinarily pay. Of course, this isn’t always the case, and the whole story is much more complex that we have time for here, but those are the basics.
Naturally, this whole arrangement was controversial from the very beginning, but the most controversial part by far was the individual mandate. Again, you can probably see why, right? Before the ACA, the choice about whether or not to maintain health insurance was just that, a choice. You could decide for yourself whether you wanted to run the risk of not having health insurance when you needed it. What’s more American than that? But then the ACA came along and took that choice away. It stepped in and said that you had to buy health insurance in some form, and it also made it that so the price of that health insurance was higher for a lot of people.
Ok, you might be thinking, but why? If the individual mandate ruffled so many feathers, why include it in the ACA at all?
Well, mostly because the whole healthcare insurance industry (and really all insurance industries) is a bit like a house of cards. It exists, on the most basic level, because healthy people are willing to pay for comprehensive insurance, despite the fact that they will probably never need the level of coverage that insurance provides. This influx of money then allows the insurance companies to turn around and cover the losses of people who are less healthy, or less fortunate.
But think about what would happen if the young, healthy people in the country decided they didn’t need insurance anymore and backed out of the market. Well, then the insurance companies would be left with a pool of higher-risk customers, and they’d have to raise premiums for those customers to compensate for the loss of revenue. And that’s exactly what the lawmakers who drafted the ACA were afraid of. They needed Americans to buy into the health insurance industry, no matter the premiums, because they needed to use that revenue to reinvest in the healthcare marketplace, to provide affordable coverage for more Americans. Essentially, what the ACA needed was a high level of participation in its new healthcare system. So it included the individual mandate as a way to keep people buying into the health insurance marketplace, and to offset some of the financial damage caused by people who didn’t.
Now, spoiler alert: this isn’t the first time the Supreme Court has heard a case involving the ACA. Back in 2012, two years after the act was passed, the Court heard a case called NFIB v. Sebelius, which involved a challenge to, among other things, the individual mandate. The argument in that case was that the individual mandate was unconstitutional because it exceeded Congress’ lawmaking power under Article I of the Constitution.
The states involved in the first challenge to the ACA, which reached the Supreme Court back in 2012. Many are involved again in 2020.
(c) Devin Cook, image courtesy of Wikimedia Commons.
The case ended up splitting the Court into nearly half a dozen different factions, each of which would have decided the case on different grounds. Overall, it’s one of the most nuanced, complex cases in recent Supreme Court history. Thankfully, we don’t have to worry about the complexity or the nuance, because all we’re concerned about is the plurality opinion written by Chief Justice Roberts.
Let’s talk about that opinion, because it’s going to set the stage for California v. Texas:
If you’ve been following the blog, you know that Congress’ lawmaking power is described in Article I of the Constitution, which basically sets out the different sorts of laws that Congress can and cannot pass. Specifically, Article I gives Congress the exclusive power to regulate (or pass laws concerning) a number of different subjects. And if a subject isn’t described in Article I, then the typical rule is that Congress has to stay out of it. As we’ve discussed before, the broadest part of Article I is the Commerce Clause, which allows Congress to
“regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”
This means Congress is allowed to pass laws that affect commerce with foreign nations (including Native American tribes) or between and among any of the states. These days, everything is connected more than ever before, and so most federal laws affect commerce between the states in some meaningful way, so the Commerce Clause is a pretty broad grant of lawmaking power. Most federal laws can eventually be justified based its terms. But the Commerce Clause isn’t as broad as it once was, and in NFIB v. Sebelius, Chief Justice Roberts found that the Commerce Clause did not give Congress the power to pass the individual mandate.
In Roberts’ own words:
“[t]he individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to ‘regulate Commerce.’”
Or, to put this another way, Congress can regulate interstate commerce, but it can’t command people to participate in it.
However, there’s another piece of Article I that came up in that case. It’s something called the Taxing and Spending Clause, and it says this:
“Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.”
Basically, Congress can collect taxes. That’s pretty basic American History 101 stuff, but it also ended up being the thing that saved the individual mandate.
You see, in Roberts’ view, there were basically two different ways to interpret the individual mandate:
1. As a “command” to purchase health insurance, which would not be constitutional under the Commerce Clause; or
2. As a tax on individuals who chose not purchase health insurance, which would be constitutional under the Taxing and Spending Clause
Chief Justice Roberts and four other members of the Court went for door number two, for a couple of reasons.
First and foremost is something called the canon of constitutional avoidance. That sounds like some complicated, scholarly concept, and it is, but it’s really pretty simple:
If a law can be interpreted in two different ways, and one of those interpretations violates the Constitution, the Court will choose the interpretation that doesn’t.
Pretty easy, right? And in NFIB, that rule meant that Roberts basically had to interpret the individual mandate as a tax.
The other reason for that interpretation was that the individual mandate really looked like a tax. It was enforced by the IRS, the collected money went to the Treasury Department, and the amount was determined by factors like taxable income and number of dependents. All of these things should sound familiar to anyone who pays their taxes every spring. Plus, the individual mandate had, in Chief Justice Roberts’ words, the “essential feature” of any tax: it raised money for the government.
As usual, let’s sum the case up in a few short, pithy sentences that you can use to impress your friends with your Supreme Court knowledge:
“The individual mandate is not a command to purchase health insurance, which would be unconstitutional. Instead, it creates a choice—buy health insurance, or don’t—and it taxes the people who choose not to buy health insurance. This arrangement is constitutional under the Taxing and Spending Clause of Article I.”
Ok fine, so the individual mandate is a tax, and it’s constitutional. End of story, right?
Wrong.
You see, almost since the beginning, the ACA has faced criticism and attacks from inside Congress. Over the years, there have been numerous attempts to repeal all or part of the ACA. Every attempt has failed.
But in 2017, Congress managed to pass a law that finally changed the ACA. Specifically, it passed a law called the Tax Cuts and Jobs Act (the TCJA, also known as President Trump’s tax reform act). The TCJA was mostly concerned with changing the American tax code, but it did do one thing with regard to the ACA: it changed the amount of the individual mandate to $0 for everyone, regardless of their income.
So, after the TCJA, if you chose not to buy health insurance, you were still technically violating the ACA, but there was no legal punishment. And that pretty much declawed the individual mandate.
Which brings us to where we are now.
That was a lot, I know. Take a second to digest it all and let’s talk briefly about the parties.
The Parties:
The Petitioner(s):
As I mentioned, there are more than a dozen states on both sides of the issue in this case. You might expect them to be divided by political ideology, with blue states siding with California and red states supporting Texas, and generally, they are, but there are some exceptions. I’m going to refer to each side by their primary supporter, so on this side, California is the lead party.
The Respondent(s):
See above. Texas is leader on this side of the case.
The Law:
We’ve already done most of the legal legwork here. We know that a command to purchase health insurance is almost-certainly unconstitutional. We know that a tax on people who choose not to purchase health insurance is constitutional. And we know that what is or is not a tax depends mostly on whether it looks like a tax, and whether it has the essential feature of a tax.
But that’s not the end of the story.
No, in this case we have to go one step further and talk about severability.
Again, that probably sounds like some arcane piece of legal jargon, and it is. But we’ll keep it simple.
When Congress passes laws, it doesn’t normally pass them one at a time. Instead, it passes huge collections of laws (called Acts), that touch on many different, interrelated subjects. The ACA is no exception. And the term “severability” basically describes the way the different pieces of an Act come together and interact with one another. To say one piece (or “provision”) of an Act is “severable” from the rest is to say that it can safely be cut out of the Act, without damaging or undermining its goal. On the other hand, to say that a provision of an Act is “inseverable” from the Act is to say that if the Act loses that provision, it will cease to function properly or to fulfill its goal.
Severability comes up all the time in Supreme Court cases. People are always asking the Court to declare some provision of an Act unconstitutional, or strike it down. And if the Court agrees, the problem becomes what happens to the rest of the Act. In a case like this one, for example, the Court’s first task is to determine whether a particular provision (i.e. the individual mandate) is constitutional. If it isn’t constitutional, the Court’s second task is to determine whether the provision is severable. If it is, the Court will normally just strike the unconstitutional provision and leave the rest of the Act (the ACA in this example) in place. If it isn’t, the Court generally has to strike the entire Act.
Ok, fine, how do we figure out if a provision is severable?
Well, that’s an extremely complicated question, for a bunch of reasons. I’m going to try to keep this explanation as basic as I can, without resorting to lawyer-talk or jargon, but just recognize that this is one area of law where the rules are still pretty undefined. In most cases, it can really go either way. And that kind of legal flexibility is dangerous if we really want our hypothetical vision of an impartial Supreme Court. Put it this way: when an area of law is highly subjective and open to any interpretation, it becomes more likely that judges will consider things like politics and public opinion (rather than law) in reaching their decision.
But anyway, let’s begin by noting that, if given the choice, the Court is supposed to try to save an Act by severing the unconstitutional portion and leaving the rest intact.
In answering the severability question, what the Supreme Court is basically trying to do is to make an educated guess about what Congress would have wanted. That is, if Congress would have wanted the entire Act to fail if one part was stricken, that’s what the Court will do, and vice versa. Again, you can probably see the problems with that sort of analysis, right?
First of all, Congress isn’t a person, it’s an amalgam. Asking what its intent was in passing a law is like going out to dinner with a group of friends and asking them all collectively why they chose that particular restaurant. If you did that, you’d probably get a bunch of different answers. Your friend Becky, the food snob, would probably say it’s because of the complex flavor arrangements. Your friend Dave, the contradictor, would probably say that he showed up to prove to Becky that the food isn’t anything special. And you…well I don’t know why you showed up. Maybe you’re a bit of a follower. Maybe you’ve been looking for an excuse to try the place but didn’t want to go alone. Maybe you’ve got a thing for Becky or Dave. It doesn’t matter. What matters is that your group doesn’t have one singular intent when it comes to your dinner choice (or anything else). The same is doubly true for Congress. After all, Congress is literally comprised of hundreds of people, all of whom have their own thoughts and beliefs and desires about the prospective laws that pass across their desk. And those laws are often the result of backroom dealings and compromises that even the Supreme Court isn’t aware of. So in many ways, it’s a fool’s errand to try to nail down Congress’ intent, but that doesn’t stop the Court from trying.
Go ahead, ask Congress what it’s thinking. I’ll wait.
Second, Congress’ intent (if there is such a thing) isn’t something that’s easily accessible. You can’t just walk up to Congress and ask it what it meant, the way you might ask your friends. Instead, you have to look at the text of the laws that Congress passes, and the various statements that its members make when passing those laws. But again, those sorts of things are extremely unreliable. I’m sure it doesn’t come as a surprise to you to hear that politicians don’t always mean what they say. Sometimes, they mislead. Sometimes, they lie. And even if they aren’t doing these things, it can be difficult to take them at their word. And yet, that’s basically what the Supreme has to do.
By the way, this problem of Congressional intent is one reason that ideologies like textualism have become so popular in recent years. Textualism acknowledges that Congressional intent is both a fallacy and nearly impossible to determine, and so it doesn’t typically consider it at all. Textualism focuses on the text, and generally tries to ignore anything like Congressional intent. And, as we’ve discussed previously, there are at least five justices on the current Supreme Court who have textualist leanings.
Ok, so if the question is what Congress intended, and that’s almost impossible to figure out by normal means, what do we do?
Well, the Supreme Court has come up with a bunch of different ways to answer the question over the years, which means that the answer is usually a matter of interpretation. I don’t want to talk about all of these tests—if we did that, we’d be here all day. Let’s just hit a couple of key questions that the Supreme Court is going to ask in this case:
· Would Congress prefer to have an Act with portions severed, or no Act at all?
· Would Congress have enacted the Act without the severed portion?
· Does the Act function the way Congress intended without the severed portion?
· Does it function at all?
You can probably see how fluid the answers to these questions are going to be in a typical case. There are almost always arguments on both sides.
And that’s a very clean segue (if I do say so myself) into our analysis of the arguments in this case. Let’s take a look.
The Arguments:
Now, California is the petitioner in this case, but I want to talk about Texas first. After all, Texas essentially won this case in the lower courts, so most of California’s arguments are going to be responding to Texas. That being the case, we might as well get a hold of what Texas is saying first.
Texas:
Texas’ argument here is pretty simple, and it goes back to NFIB v. Sebelius, the case we discussed earlier. As I mentioned, the big takeaway from that case was that the individual mandate was either a command to buy health insurance (which would be unconstitutional) or a tax (which would have been constitutional). As you know, Chief Justice Roberts decided back then that the individual mandate was a tax and not a command.
But Texas’ position is that things have changed since 2012, and that the individual mandate can’t be a tax anymore.
Why not?
Well, mainly because it now lacks the “essential feature” of a tax. It doesn’t show up on tax returns or in the Treasury anymore. It isn’t enforced by the IRS. And, most importantly, it doesn’t generate any revenue for the Government.
And if it isn’t a tax, then it’s a command to buy health insurance, which the Supreme Court has already said is unconstitutional.
Ok, that was pretty easy, but we’re not done yet.
Let’s assume for a moment that Texas is right, and that the individual mandate is unconstitutional. What happens then? Well, then we have to do the severability analysis.
Texas is, of course, going to say that this makes the entire ACA unconstitutional. Texas’ main argument on severability relates to the last two severability questions we asked above. I’m going to borrow Texas’ terminology and call this the “three-legged stool” argument. Basically, what Texas is arguing is that the individual mandate is an integral part of the ACA because it funds all the other programs and services. Remember what we said earlier: the reason Congress included the individual mandate in the ACA is because if all the healthy, wealthy people stopped buying health insurance, the government would have a hard time funding the rest of the Act. So, in that sense, the individual mandate is like one of the legs in a three-legged stool. If it’s removed or invalidated, the stool can’t stand up and it collapses in on itself. This is what Texas sees happening if the individual mandate is stricken: the rest of the provisions in the ACA will become too expensive and too unworkable. They’ll fall in on themselves like a house of cards.
The proverbial three-legged stool.
And Congress knew this, according to Texas, or it should have known. So when it reduced the tax amount down to $0, it knew the rest of the Act would fail. It wanted the death of the individual mandate to be the death of the whole ACA.
As always, let’s imagine we’re out in public somewhere, maybe at a restaurant or a pub. We’re sitting on a stool (with four legs) at the bar or at a high top table. On one side of us is California. It’s got long blonde surfer hair and sun-tanned skin. It says things like “dude” and “bro,” and it only eats organically-sourced produce. On the other side of us is Texas. It’s wearing a cowboy hat—or maybe a sombrero—and it’s chewing on a toothpick that it keeps jammed into the side of its mouth.
Now, let’s imagine we ask Texas to sum up its argument in the simplest terms. Texas might say something like this:
“Look here boy, when Congress passed the ACA back in 2010, it passed a law that forced everyone in America to buy health insurance. I know it. You know it. Hell, the Supreme Court knows it. Now, back in 2012, the Court said that command was a tax, which is bogus, but fine, that’s the way it is. But it’s not a tax anymore. What kind of a tax comes out to $0? What kind of a tax doesn’t show up on tax returns? What kind of a tax doesn’t go to the IRS? And if it isn’t a tax, then it’s a command, that’s what the Supreme Court told us back in 2012, remember? Now that command isn’t constitutional. We know that too, because of the case in 2012. And if it’s not constitutional, well then the whole ACA falls apart. It can’t pay for itself anymore, and it’s going to collapse. Congress knew that when it set the tax amount to $0. It knew the ACA would start to fall apart. And now it’s the Court’s job to put the last nail in the coffin and put the ACA out of its misery before it implodes right before our eyes.”
California:
Let’s talk about the other side of the case.
California’s first argument is a practical one, and it goes something like this: how could Congress have turned a tax into a command by removing the only penalty for violating the law? Put another way, if the individual mandate was a tax in 2012 (and Chief Justice Roberts told us that it was), and the only thing that happened between 2012 and now is that the penalty was reduced to $0, how could it now become a command? After all, for a law to be a command, we’d expect some punishment for violating it, wouldn’t we?
That’s very interesting. Let’s think about it in the context of our own lives.
The most urgent commands we deal with in the legal system are criminal laws, right? The state and the federal government command us not to steal, not to kill, not to drive over the speed limit. And in order to make sure we behave, they set up strict penalties. Fines, community service, jail time. But if those penalties didn’t exist, how much do you think people would follow the law? And would we even call those laws commands anymore? Or, would they become something more like very hopeful moral suggestions? That’s basically the question California is asking the Court: can we really call the individual mandate a command if there’s no punishment for breaking it?
That’s the practical argument, and it’s an interesting one, but it’s not likely to get any traction at the Supreme Court. There’s also, of course, a legal argument, so let’s look at that.
We’ll start with two general assumptions that the Supreme Court makes when dealing with Congress:
First, the Supreme Court generally assumes that Congress is aware of Court rulings when it drafts laws. We would hope this is true, right? Most people aren’t particularly high on Congress right now, I know, but it seems reasonable to assume that when the Supreme Court alters a huge piece of federal law, Congress is aware of it.
And second, the Supreme Court generally assumes that Congress doesn’t pass laws that it knows are unconstitutional. Again, we’d hope this is true, right? After all, it would be a tremendous waste of time if Congress took months and months to pass a law that it knew was doomed to be struck down by the Supreme Court (a process which can take years). One consequence of this second assumption is that the Supreme Court generally interprets federal laws to save them if possible. We mentioned this rule already when we talked about the canon of constitutional avoidance.
So, applying those principles to this case, we would expect the Supreme Court to assume that Congress knew about the decision in NFIB v. Sebelius, which interpreted the individual mandate as a tax and a choice. And if Congress knew about that and wanted to turn that tax into a command, it could have done so. It could have simply said, when it revised the ACA, “we know the Supreme Court has interpreted our law as a tax, but that isn’t right. It’s actually a command, so this is us setting the record straight.” But it didn’t do that, because, of course, if it had, it would have breaking the second rule by passing a law that it knew (again, because of NFIB) was unconstitutional.
Now, you might be wondering, if the individual mandate isn’t a command, what is it? After all, Texas is right that it doesn’t really look much like a tax anymore.
California has two responses to that:
First, it suggests that the individual mandate is just a tax that isn’t being collected right now. This sometimes happens in federal law: a tax gets passed for some purpose and gets collected for a while, and then that purpose disappears but the tax remains, only it stops being collected. So that’s a possibility.
The other possibility is that the individual mandate is now just a legal suggestion. That sounds strange and almost like an oxymoron—after all, if it’s just a suggestion, then it isn’t really a law is it? Well, there are actually a bunch of these federal “suggestions” on the books, and some of them are very strange. One very common example is the section of the United States Code that outlines how to respect the flag. That section states that the flag should never be “disrespect[ed],” “carried flat,” “used as wearing apparel, bedding, or drapery,” “used as a covering for a ceiling,” “used for advertising purposes,” or allowed to “touch anything beneath it, such as the ground, the floor, water, or merchandise.” All in all, it’s a pretty strict set of commands. As you might expect, these commands get violated all the time, all over the country. But as with the individual mandate, no one would seriously suggest that these commands are unconstitutional just because there’s no penalty to enforce them.
The classic example of disrespect to the flag, burning, is protected by the First Amendment.
The last thing we have to talk about is, again, severability. Of course, California’s position is that even if the individual mandate is unconstitutional, the solution is just to strike it out of the ACA, and leave the rest of the Act the way it is.
In this case, California’s argument is appealing right at the heart of the severability analysis: if Congress wanted to repeal the ACA, it could have done so, but it didn’t. In fact, over the years, Congress has considered numerous proposals to repeal all or part of the ACA. It hasn’t acted on any of them. Instead, all Congress did was remove the monetary penalty of the individual mandate. The point is basically that this would be a ridiculous way of repealing a huge piece of federal law. It’s just not the way Congress works.
And that’s saying nothing of the hundreds of other provisions of the ACA that we haven’t talked about, things that don’t involve the individual mandate at all. Would Congress have passed a simple law reducing the penalty to $0 and expected it to strike down all the various ACA provisions? California’s answer is no.
Again, let’s imagine we’re sitting down with California in a bar and we ask it to sum up its argument in the simplest terms. California would say something like this:
“Hey man, the Supreme Court already said the individual mandate is a tax. And it doesn’t stop being a tax just because the amount is reduced to $0. Plenty of taxes don’t get collected anymore, but that doesn’t mean they’re unconstitutional. Plus, even if it isn’t a tax anymore, that doesn’t necessarily mean it’s unconstitutional. There are plenty of laws that are really just suggestions—this could be like one of those. And listen, even if the individual mandate is unconstitutional, that doesn’t mean the whole of the ACA is unconstitutional. We gotta ask what Congress would want. If Congress wanted the whole ACA gone, it could have just repealed it. It didn’t do that, so clearly it wants it to go on living man. The Court job is to make sure that happens.”
Conclusion:
Let’s take a step back and consider what the parties are really fighting over here. The ACA is a huge, sweeping piece of federal law, but at the end of the day, it really comes down to one issue: balancing the desire for universal health care with respect for the states and for the private sector. I suspect very few people on both sides of this issue would argue with the proposition that is generally good for more people to have healthcare coverage. In fact, most people would probably say that everyone should have access to healthcare insurance. But the issue is with who provides it. The states like Texas who oppose the ACA generally do so because they think that the states and the private sector should be the ones to address this problem. Meanwhile, the states like California believe that the issue is too big for the states and the private sector, and that the federal government should (continue to) step in.
That’s a policy disagreement and it’s a healthy one.
Both sides are advocating for important viewpoints, and it’s in the balance between these two viewpoints that our government really thrives. It’s our job then, as citizens of this or any country, to educate ourselves about what’s happening in our government, and develop informed opinions about what we believe. And then, it’s our job to recognize that the people who disagree with us are not evil or malicious. In fact, they aren’t even wrong. They simply disagree. But educated, informed disagreement is what democracy is all about.
Talking Points:
You know the drill:
Despite the name of this case, it involves more than just California and Texas. In reality, the majority of American states are represented in this case, on one side or the other.
They’re fighting over the future of the Patient Protection and Affordable Care Act, also known as the ACA, or Obamacare.
Specifically, they’re fighting over a provision of the ACA called the individual mandate.
That provision imposed a tax on people who did not buy into the ACA healthcare system.
The tax was necessary to help offset the costs of the ACA’s plan to provide better healthcare coverage to more Americans.
In 2012, the Court heard the first case, NFIB v. Sebelius, challenging the individual mandate.
In that case, the Court concluded that the individual mandate was not a command to buy health insurance, which would have been unconstitutional, but rather a tax on people who chose not to buy health insurance.
This was constitutional under the Taxing and Spending Clause of the Constitution.
Then, in 2017, Congress passed the Tax Cuts and Jobs Act (TCJA), which changed the individual mandate by reducing the penalty amount to $0.
Texas’ argument now is that the individual mandate isn’t a tax anymore because the amount is $0, and so it must be a command to purchase health insurance.
Texas is also arguing that if the individual mandate is unconstitutional, then the whole of the ACA—all 900-something pages—is unconstitutional. That is, it believes the individual mandate is not severable from the rest of the ACA.
California’s argument is that the individual mandate is still a tax, the same way it was in 2012, even if it isn’t being collected right now.
California is also arguing that even if the individual mandate is unconstitutional, it is severable from the rest of the ACA, and it doesn’t drag the whole Act down with it.
Both sides of this case essentially agree with the idea that more access to better healthcare is generally a good thing for America, but they disagree on how to achieve that goal.
Generally, Texas’ side would prefer to see the states and the private sector address the issue.
California, by contrast, believes that the federal government should continue to step in.
Why This Case Matters to YOU:
This case is going to affect your life in some noticeable way. I can say that with near 100% certainty, which is something of a rarity these days.
Now, I can’t predict what the effects are going to be (if I could do that, someone would probably be paying me a lot of money and I wouldn’t be stuck here with you), but I can tell you they’re going to appear. They’ll likely show up as changes in your healthcare coverage, or your access to that coverage, but don’t be fooled. This case is so much more than that.
This case is another in a long line of ideological battles that are playing out right in front of our eyes, in the wood-paneled trenches of the Supreme Court. Many Americans have chosen their side already, staked out their position. You will too, I’m sure. But when you do, try to remember one thing: at the end of the day, we’re all on the same side. We should disagree, and we should stand up for what we think is right, just so long as we’re always trying to do what’s best for our fellows. Without that, we’re nothing.
That’s all for now. As always, don’t forget to stay up to date by following the blog on social media using the links above, and feel free to contact me directly via the Contact page with all your comments, concerns, and unsolicited political opinions. You can also sign up for the bi-weekly Impartial Review Newsletter using the link on the Contact page. Until next time.