Key U.S. Supreme Court justices sound skeptical of Texas' argument to throw out Affordable Care Act

Key justices on the U.S. Supreme Court seemed skeptical Tuesday morning of Texas’ argument that if one key provision of the Affordable Care Act is unconstitutional, the entirety of the sprawling health law must fall.

Texas, leading a coalition of conservative states and with the backing of the Trump administration, has argued that after Congress zeroed out the individual mandate — once a fee paid by those who chose not to purchase insurance — that provision could no longer be considered a tax and had to fall as unconstitutional, taking the whole law with it. But legal scholars all over the political spectrum have long been skeptical of that argument about “severability” — and questions from Justice Brett Kavanaugh and Chief Justice John Roberts indicated they may feel the same.

“Looking at our severability precedents, it does seem fairly clear that the proper remedy would be to sever the mandate provision and leave the rest of the act in place — the provisions regarding preexisting conditions and the rest,” Kavanaugh said more than an hour into the two-hour oral argument, held remotely during the coronavirus pandemic. “How do you get around those precedents on severability, which seem on-point here?”

“I get around them by relying on the text of the statute,” replied Texas Solicitor General Kyle Hawkins, who was arguing for the red states. He pointed to various pieces of the law which describe the individual mandate as an “essential” part of the law that powers the rest of its functions.

“Congress knows how to write an inseverability clause, and that is not the language they chose here,” Kavanaugh countered. “I agree with you about focusing on the text … but I’m having trouble seeing that as the equivalent of an inseverability clause.”

Roberts, another critical vote on the high court, told Hawkins it is “hard to argue that Congress intended the entire act to fall with the mandate … when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the act.”

The stakes are hard to overstate: The years-old law touches nearly every fact of the U.S. health care system, including popular protections for individuals with preexisting conditions and subsidized insurance plans for millions of people. A victory for Texas’ legal team would trigger an immediate emergency for the state’s policymakers, who have yet to produce a promised plan to replace the Affordable Care Act should it be struck down. Texas already has the nation’s highest uninsured rate.

But the majority of the justices did not appear inclined on Tuesday to strike down the entire law.

Other justices, including President Donald Trump’s newest appointee, Justice Amy Coney Barrett, were more inscrutable. But if Kavanaugh and Roberts were to join with the court’s three liberal justices on the severability question, they would create a majority that could salvage the bulk of the Affordable Care Act.

Arguments started off with a discussion about whether the Texas plaintiffs had proper standing to challenge the law, a procedural but critical issue that could decide the case before justices even consider the core legal questions.

Whether the individual mandate itself survives was less clear. But striking it down would have little practical effect given that people who choose not to be insured are not currently required to pay a penalty under the provision. As part of a 2017 tax cut, Republicans in Congress set the penalty at $0.

Rob Henneke, general counsel for the conservative Texas Public Policy Foundation and the attorney for individual plaintiffs who have joined Texas in the case, said it would be a victory even if the court strikes the individual mandate but leaves the balance of the law intact.

“A rejection of the individual mandate at a minimum would affirm that there are limits to the federal government,” he said shortly after oral arguments on Tuesday, adding that he is optimistic the court will strike down more than that.

In a statement, Texas Attorney General Ken Paxton did not address the the justices' doubts during the argument but restated the state's case.

“The Framers’ constitutional design leaves it to the states to identify and implement the best healthcare system for their citizens, particularly those with preexisting conditions," he said. "Today, Texas seeks to preserve that federalism. It’s time to end Obamacare’s one-size-fits-all approach and let the states do what works for them.”

A ruling is expected by the end of June 2021.

Texas has won early success in the case, with a federal judge declaring the entire law unconstitutional in a ruling that has been put on pause as litigation proceeds. The U.S. 5th Circuit Court of Appeals, known as perhaps the country’s most conservative, agreed that the individual mandate was unconstitutional, but the judges said they needed to hear more to convince them that the rest of the law had to fall, too.

Whatever the result, Tuesday should have been a triumphant day for the Texas attorney general’s office, whose conservative litigators have been hoping to land their challenge at the high court since the lawsuit was filed nearly three years ago. But the high-profile showing for the office came during a perilous time for its leader, weeks after eight top aides told law enforcement they believed Paxton was violating the law by using the agency’s resources to serve a political donor. Media reports in The Texas Tribune and other outlets, as well as public documents, have shown four instances when Paxton intervened in a legal matter involving the donor, real estate magnate Nate Paul.

Paxton has denied the allegations as “false” and dismissed the whistleblowers as “rogue employees.” Meanwhile, the nature of his relationship with Paul remains under scrutiny. Paul gave Paxton $25,000 during his 2018 reelection bid, and revealed, in a deposition last week, that he had employed a woman at Paxton’s recommendation. Paul said in the deposition that hiring the woman was not a favor to Paxton. But the woman had been involved in an extramarital affair with Paxton, according to two people who say the attorney general told them of the relationship in 2018.

Four of the eight whistleblowers have now been fired, three resigned and one put on leave, as other senior staff at the agency also depart. Hawkins, who argued for Texas at the high court on Tuesday, is one of a few senior deputies who remained at the agency after the scandal.

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