The Supreme Court Saved Obamacare Again By Throwing Out A Republican Lawsuit

The 7–2 decision saw justices nominated by Donald Trump join with the court's liberals.

The Supreme Court saved the Affordable Care Act yet again on Thursday, tossing out a Republican lawsuit that sought to overturn former president Barack Obama’s signature legislation.

The 7–2 decision brought together the court’s liberal wing and several of its more conservative members, including the two newest justices confirmed under former president Donald Trump, Justices Amy Coney Barrett and Brett Kavanaugh.

The majority concluded that Texas and the other Republican state attorneys general who sued lacked standing to bring the case at all, a ruling that brought the yearslong fight to an end without delving into the substance of the latest challenge to the healthcare law. Justice Stephen Breyer wrote the opinion, which was also joined by Chief Justice John Roberts Jr. and Justices Clarence Thomas, Sonia Sotomayor, and Elena Kagan.

The ACA’s many provisions that transformed the US healthcare system will remain intact — including insurers being blocked from denying coverage to people with preexisting conditions, regulated individual insurance markets, and an expansion of Medicaid plans to millions of people with low incomes.

To establish standing, a party has to show that they suffer an injury traceable to the issue at hand. The Texas lawsuit centered on the individual mandate portion of Obamacare, a tax on people who decline to purchase health insurance, which did not directly affect state governments at all. The Republican states tried to get around this by arguing that encouraging people to sign up for health insurance causes extra paperwork costs for states as an employer. “Those forms don’t produce themselves,” then–Texas solicitor general Kyle Hawkins argued before the Supreme Court in November.

The court wasn’t having it. During last year’s hearing, Justice Elena Kagan said the Texas argument would “explode” standing doctrine

The Republican states tried to argue that the individual mandate penalty — despite being $0 — increased their financial burden by driving more people to join state medical insurance programs. But the court forcefully rejected that argument.

“Neither logic nor evidence suggests that an unenforceable mandate will cause state residents to enroll in valuable benefits programs that they would otherwise forgo,” says the decision.

The justices ruled that granting standing in a case like this would essentially give the courts a blank check to overturn legislation. “It would threaten to grant unelected judges a general authority to conduct oversight of decisions of the elected branches of Government,” says the ruling.

The lawsuit from a group of Republican-controlled states, led by Texas, was the latest attempt in a decadelong campaign to use the courts to overturn the ACA, commonly known as Obamacare. Argued in November, it was also the first major case heard by the Supreme Court since Republicans took a solid 6–3 majority last fall with the confirmation of Barrett.

The Texas lawsuit rested on a novel theory that Congress accidentally made the ACA unconstitutional when it altered a healthcare tax in 2017. Despite being widely derided by legal scholars on the left and right alike, the Republican suit won an initial victory in 2018 when a federal judge in Texas ruled Obamacare unconstitutional. The lawsuit made it all the way up to the Supreme Court but had a rough ride once it got there. Roberts and Kavanaugh — who were seen as the likely swing votes — bluntly criticized the case put forward by the Republican states. Even Barrett strongly questioned the notion that the courts should override the will of Congress. But ultimately their ruling did not touch on the merits of the Texas argument.

Justices Samuel Alito and Neil Gorsuch wrote a dissent saying they accepted the Republican lawsuit and would have thrown out large swaths of the ACA. They accused their fellow justices of using standing to avoid the issue to protect the law. “Instead of defending the constitutionality of the individual mandate, the Court simply ducks the issue,” says their dissent.

Thomas, an arch-conservative who has ruled against the ACA twice in the past, did not join them. He found that the Republican states failed to demonstrate they suffered harm that could be traced to unlawful conduct. “Although this Court has erred twice before in cases involving the Affordable Care Act, it does not err today,” he wrote.

From its inception, the lawsuit was a do-over attempt to tear down Obamacare. When Republicans gained control of the White House and Congress in 2016 they initially tried to repeal the ACA through legislation, but could not pass a repeal plan through the Senate. Instead, they made a much more narrow move in 2017, effectively eliminating the individual mandate tax penalty by reducing the penalty to $0.

That move had little real-world impact, but it opened the door for a new lawsuit that rests on a previous legal challenge that nearly overthrew the ACA. In 2012, the Supreme Court had to decide whether Congress had the power to force people to buy health insurance. The court found that it did, sort of. In National Federation of Independent Business v. Sebelius, the court narrowly ruled that Congress’s taxation powers allow it to charge a penalty tax on people who opt not to buy health insurance.

The Republican lawsuit argued that when Congress reduced the individual mandate penalty to $0, it ceased to be a tax. Since the individual mandate is only constitutional as a tax, the logic goes, that made the individual mandate unconstitutional. On its own this question is merely philosophical — Is a $0 tax still a tax? If a tree is taxed in the woods, does anybody notice it? — but the Republican attorneys general then argued that if the individual mandate is unconstitutional then the entire 900-page law is unconstitutional and must be thrown out.

This argument received widespread derision from legal experts across the political spectrum and appeared to fly in the face of a doctrine known as severability. This principle dictates that the courts should seek to “sever” unconstitutional elements of laws when possible, as opposed to throwing out those laws entirely.

The ruling is a massive win for Democrats, as well as people with low incomes and people with chronic health conditions. Over 11 million people sign up for insurance on the individual markets, and over 15 million people have received health insurance through the ACA’s expansion of Medicaid. All in all, about 20 million more people have health insurance because of the ACA.

President Joe Biden’s healthcare platform centered around extending Obamacare even further by expanding eligibility to Medicaid, increasing tax credits to help people buy insurance, and creating a public option to compete with private insurers on the individual markets. With the ACA surviving, he’ll now have that chance.

Topics in this article

Skip to footer