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U.S. Supreme Court to hear Texas' challenge to Obamacare

The U.S. Supreme Court building in Washington, U.S., November 30, 2018. | by REUTERS/Jim Young REUTERS/Jim Young

The U.S. Supreme Court will hear a Texas-led challenge to the Affordable Care Act, the justices said Monday, marking the third major case in which former President Barack Obama's landmark health law has earned the scrutiny of the country’s highest court.

Exact timing was not announced, but the case is likely to be heard this fall, with a decision in 2021 — sparing presidential candidates the prospect of a major court decision amid a bitter contest in 2020. Obamacare remains intact while the litigation proceeds, but the lawsuit threatens to end it in its entirety.

Texas sued the federal government in February 2018, taking aim at the individual mandate — a critical provision of the sprawling law aimed at getting more people covered by penalizing those who chose to remain uninsured. In a 2012 case, the Supreme Court ruled that the mandate was constitutional because it could be interpreted as a tax, which Congress has clear power to levy.

Leading a coalition of 20 Republican states, Texas Attorney General Ken Paxton argued that after the individual mandate’s penalty was zeroed out in a Republican tax bill, the mandate could no longer be interpreted as a tax and must therefore fall was unconstitutional. More controversially, Paxton’s coalition argued that with the individual mandate, the rest of the law must fall, a “severability” argument that has proved critical to the litigation.

The Trump administration, in an unusual move, declined to defend the law and instead sided with Paxton, leaving the defense of the law to a counter-coalition of Democratic states led by California Attorney General Xavier Becerra.

Legal scholars on both sides of the aisle, including Obamacare critics, scoffed at the argument that one provision must doom the rest of the law. But in December 2018, U.S. District Judge Reed O’Connor struck down the law in its entirety. O’Connor, something of a favorite for the Texas Attorney General’s Office, has heard a disproportionate number of cases Texas has filed in the federal courts here.

In December 2019, a federal appeals court accepted only some of his analysis, ruling that the individual mandate was unconstitutional, but that the severability question merited further consideration. The appeals court seemed almost to chide O’Connor, writing that his opinion “does not do the necessary legwork” to justify striking the entire law and directing him to reapproach the analysis with “a finer-toothed comb.”

The California coalition asked the high court to hear the case instead of letting it return to the district court, which Texas said was proper. Earlier this year, the Supreme Court declined to fast-track the case — which could have meant issuing a decision before the fall’s presidential election.

“Now that the individual mandate can no longer be preserved as a tax, the constitutionality of Obamacare must be determined," Paxton said in a statement. "I look forward to finally settling the matter before the U.S. Supreme Court.”

The vaulting of the case once considered a longshot to the country’s highest court is a victory for the conservative-led Attorney General’s Office, which has long enjoyed an outsized reputation for influence on the national stage. Ending Obamacare is a prized political goal of Texas Republicans, and after failed attempts to do it in the U.S. Congress, the Supreme Court seems the best venue to attempt.

Robert Henneke, general counsel for the conservative Texas Public Policy Foundation, which has fought the lawsuit alongside Texas, said Monday's decision brings the case "one step closer to finality and Americans one step closer to freedom from a failed and unconstitutional system."

Obamacare touches almost every aspect of Texas’ health care system, from subsidized health coverage of roughly 1 million people to protections for patients with preexisting conditions. Lawmakers here have yet to produce a plan that would replace the law if it were to fall.

“Our health is the most precious resource we have—we should all be working to improve healthcare, instead of ripping coverage away from those most in need,” Becerra said. “As Texas and the Trump Administration fight to disrupt our healthcare system and the coverage that millions rely upon, we look forward to making our case in defense of the ACA. American lives depend upon it.”

The Supreme Court has heard two major challenges to Obamacare before, both times leaving it largely intact.

The U.S. Supreme Court will hear a Texas-led challenge to the Affordable Care Act, the justices said Monday, marking the third major case in which the landmark health law has earned the scrutiny of the country’s highest court.

The timing was not announced, but the case is likely to be heard this fall, with a decision in 2021 — sparing presidential candidates the prospect of a major court decision amid a bitter contest in 2020. The law remains intact while the litigation proceeds.

Texas sued the federal government in February 2018, taking aim at the individual mandate — a critical provision of the sprawling law aimed at ensuring higher insurance coverage rates by penalizing those who chose to remain uninsured. Leading a coalition of Republican states, Texas Attorney General Ken Paxton argued that after the individual mandate’s penalty was zeroed out in a Republican tax bill, the mandate could no longer be interpreted as a tax and must therefore fall as unconstitutional. Paxton’s coalition argued that with the individual mandate, the entire rest of the law must fall, a “severability” argument that has proved critical to the litigation.

The Trump administration, in an unusual move, declined to defend the law, leaving the defense of the law to a counter-coalition of Democratic states led by California Attorney General Xavier Becerra.

A federal judge in Texas sided with Texas in December 2018, striking down the law in its entirety. More recently, a federal appeals court ruled the individual mandate unconstitutional, but sent the rest of the lawsuit back to a district court for further consideration.

Texas said that court was the proper venue, but a counter-coalition of blue states, led by California, petitioned the high court to hear it instead. The court earlier this year declined to fast-track the case — an option which could have meant issuing a decision before the fall’s presidential election.

Paxton’s office did not immediately return a request for comment.

“Our health is the most precious resource we have—we should all be working to improve healthcare, instead of ripping coverage away from those most in need,” Becerra said. “As Texas and the Trump Administration fight to disrupt our healthcare system and the coverage that millions rely upon, we look forward to making our case in defense of the ACA. American lives depend upon it.”