Is Obamacare Headed Back to the Supreme Court?

Obamacare is back in court, and a new ruling issued this week could put it on track to return to the Supreme Court.

The Supreme Court in its 2012 decision upholding Obamacare said it was constitutional on the dubious basis that the individual mandate is a tax, not a requirement to buy something. But the Tax Cuts and Jobs Act of 2017 passed by congressional Republicans and signed by President Trump eliminated the individual mandate penalty for not carrying health insurance.

So in February 2018, Texas led a coalition of 20 states filing a federal lawsuit arguing that since the individual mandate penalty had been repealed, Obamacare no longer had a constitutional basis and the whole law should be thrown out. President Trump’s Department of Justice said it would not defend Obamacare in the case, but a coalition of 17 states led by California stepped in to defend it.

In December 2018, Judge Reed O’Connor, a Texas federal district judge, declared the entire law unconstitutional. But in a rare show of judicial restraint, he stayed his own ruling and did not attempt to impose it nationwide so it could be appealed up the chain.

That brings us to this week, when a panel of the Fifth Circuit Court of Appeals — which is a level below the Supreme Court and covers Texas, Louisiana, and Mississippi — agreed in a 2-1 decision that the individual mandate is unconstitutional “because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.” But the Fifth Circuit punted on the question of whether the entire law can be struck down, instead sending the case back to Judge O’Connor’s district court to reconsider how much of the law can survive.

The Fifth Circuit said it was sending the case back down because the Trump administration had changed positions. The Department of Justice initially argued that only parts of the law should be abolished, but this year they doubled down and said the entire law should be struck down in the 20 plaintiff states.

The federal court system moves slowly. It will probably take about a year for the district court to make another ruling, which will be appealed, and then the Fifth Circuit will probably take a year to consider the appeal. Finally, if the Supreme Court then decided to take the case, it would probably take them about a year to make a decision.

So if Obamacare is to be struck down, it will likely take at least another 2 to 3 years. And if the Democrats manage to win the presidency in 2020 and take control of both houses of Congress in the meantime, they could reinstate the individual mandate and possibly render the entire case moot. That means Obamacare is most definitely at the ballot box in 2020.