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Supreme Court hears oral arguments in ACA constitutionality case

Benefits Administration and Outsourcing|Health and Benefits|Total Rewards

By Rich Gisonny and Kathleen Rosenow | November 25, 2020

Based on the oral arguments, it appears there may be some resistance to striking down the entire ACA.

Oral arguments in the Affordable Care Act (ACA) individual mandate case (California v. Texas) took place as scheduled via teleconference on November 10, 2020. This case challenges the constitutionality of the individual mandate given that the tax penalty was eliminated by Congress in 2017 (effective in 2019). It also raises the question of whether the entire law should be struck down if that provision is unconstitutional (due to the lack of a severability clause in the ACA). A decision is expected by spring/summer of 2021.

Following are several highlights from the oral arguments:

  • Full court: Oral arguments were heard by the full court of nine justices, including Amy Coney Barrett, President Trump’s most recent appointee. This means there cannot be a tie vote.
  • Standing: The court spent a good amount of time on the question of whether the plaintiffs have “standing” to sue (i.e., has the party suffered an injury that is fairly traceable to the defendant’s conduct and is likely to be redressed, or remedied, by a favorable decision). If the court determines that no plaintiff has standing, it could dismiss the case without ruling on substantive constitutional questions.
  • Constitutionality: Discussion on the constitutionality of the individual mandate focused on whether the absence of a penalty converted the mandate from a permissible “choice” (i.e., purchase health coverage or pay a tax) into an unconstitutional “command.” The court also discussed whether the mandate can still be considered a tax (albeit a $0 tax).
  • Severability: As to the issue of whether the rest of the ACA can be severed if the mandate is determined to be unconstitutional, several court members, including Chief Justice John Roberts and Justice Brett Kavanaugh, suggested that it wasn't the Supreme Court's place to invalidate the entire law, and that the fate of the mandate shouldn’t determine the continued viability of the rest of the law. This is noteworthy, particularly with respect to Justice Kavanaugh, since he has been considered by some observers likely to vote to strike down the ACA.

It is difficult to predict exactly how the court will rule on this case; however, based on the oral arguments, it appears that a majority of the justices may be resistant to striking down the entire ACA.1


1 For a discussion of possible outcomes in the case, see “Potential impact of Supreme Court changes on the ACA,” Insider, October 2020.

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Insider November 2020 PDF .4 MB

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