The Supreme Court & The ACA: What To Expect From California v. Texas

Health Policy

Ambassador writing program

The Summary

Free the Facts heard from Dr. Lanhee Chen on Monday as part of its Fall Policy Tour

Dr. Lanhee Chen provided attendees with a quick intro to healthcare, the parties involved in California v. Texas, and its implications.

Expect the U.S. Supreme Court to strike down a controversial part of the Affordable Care Act but to leave the rest of the law in place, Dr. Lanhee Chen told Free the Facts last night at its fourth virtual policy event of the fall.

Today, the Supreme Court heard oral arguments in the seventh and latest case concerning the ACA to come before it, California v. Texas. And last night, Dr. Chen, the chairman of Free the Facts’ Policy Advisory Board, gave the audience a primer on what the case is about and how its outcome could shape the future of America’s health care system.

The case centers on one of the most contentious aspects of the ACA: the requirement that every American have insurance coverage, or what’s known as the individual mandate.

Ever since President Obama signed the ACA into law in 2010, the individual mandate, which levies a penalty on those who don’t have health insurance, has been a point of contention between the two major political parties.

In 2012, the law’s opponents pinned their hopes on the first ACA case to reach the Court, The National Federal of Independent Businesses v. Kathleen Sebelius. The NFIB and 26 states argued that the individual mandate was unconstitutional because, in their view, the Constitution did not grant Congress the power to compel Americans to buy health insurance.

But the NFIB went further. It pointed out that, because the ACA required health insurers to provide coverage to people with pre-existing conditions, its advocates had argued that the individual mandate was essential to the law. Without the young and healthy paying in, its risk pools would soon run out of money. Therefore, the NFIB argued, if the Court struck down the mandate, it would have to throw out the whole law with it.

In a 5-4 decision, the Court disagreed. It decided that the mandate was, in fact, constitutional because in reality it was a tax.

But the argument over the mandate began anew five years later, when President Trump signed into law the Tax Cuts and Jobs Act of 2017. The law dropped the penalty for not having health insurance to zero, which raised the obvious question: Can the mandate really be considered a tax if it couldn’t possibly raise any revenue?

It was this argument that 20 states, led by Texas, used in a new case against the ACA. Since the Trump administration decided to side with Texas, 17 states, led by California, then took up the cause of defending the ACA. And now the competing cases have been consolidated into California v. Texas.

Dr. Chen told the audience the case raises three important questions: First, if the penalty is zero, can the individual mandate still be considered a tax? Second, if it is not a tax, is the individual mandate unconstitutional? And third, if the mandate is unconstitutional, can the rest of the ACA still stand?

The theory that if the mandate is unconstitutional, the entire law must go is, Dr. Chen noted, “a little bit dubious” because the Court has long adhered to what’s known as the doctrine of “severability.”

“In general, Congress wants its laws to continue, and the courts want to respect or have deference for Congress and the fact that they generally want to see statues saved,” Dr. Chen explained. Under the doctrine of severability, “you try to cut out the part of a law that doesn’t work.”

“If we apply that to California v. Texas,” he added, “the prevailing wisdom is the Supreme Court is going to cut out the individual mandate” and leave the rest of the law intact.

There’s also been a major shift in thinking among the law’s opponents, Dr. Chen noted. The ACA has been “the law of the land for 10 years,” and it would be “very disruptive” to get rid of it in its entirety.

Instead, more and more health care experts believe, “You have to think about ways to improve the health care system in the context of what we have... how do you make the system work better and take the things that aren’t working and improve them?

And however the Court rules, one thing is certain: The debate over the future of America’s health care system isn’t going to end anytime soon.

Keep Exploring


Federal Budget

Care about public policy? You need to understand where the federal government gets - and how it spends - money.

Read More


Social Security

More than 65 million Americans rely on Social Security for retirement income, survivors benefits, and disability insurance payments. Learn more about how the program works, its funding challenges, and the proposals to address them.

Read More


Leadership Programs

Our programs and events help you stay informed and get involved. Want to learn more about issues like Medicare, student loans, and Social Security? Check out our leadership and events section.

Read More


Policy Library

Learn more about our country's biggest challenges.

Read More