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While everyone was focused on impeachment, 5th Circuit cut the legs out from under Obamacare

While everyone was focused on impeachment, 5th Circuit cut the legs out from under Obamacare

5th Circuit upheld the lower court ruling that the Obamacare mandate is unconstitutional, but remanded to the District Court for further consideration of whether that means the entire law falls.

A year ago almost to the day, we reported that a Texas federal judge (1) held that the Obamacare individual mandate was unconstitutional after Congress repealed the mandate tax (which was the justification for the Supreme Court upholding the mandate in 2012), and (2) the mandate was not severable from the rest of the law, so the entire law fell.

It was a full defeat of Obamacare, Federal Judge kills Obamacare:

Reed O’Connor, a federal judge in the Northern District of Texas, just killed Obamacare.

If the ruling holds up on appeal, Obamacare is dead. As a doorknob. Not just the mandate or some other particular provisions.

He killed the WHOLE THING.

The 5th Circuit just (1) upheld the ruling that the mandate is unconstitutional, but (2) remanded to the District Court for further consideration of severability. So perhaps the headline today is not that the 5th Circuit killed Obamacare, but rather, the 5th Circuit cut the legs out from under Obamacare. Whether the entire legless law falls is yet to be determined.

You can read the full 98-page opinion here. Here is a summary section from the Opinion:

First, there is a live case or controversy because the intervenor-defendant states have standing to appeal and, even if they did not, there remains a live case or controversy between the plaintiffs and the federal defendants. Second, the plaintiffs have Article III standing to bring this challenge to the ACA; the individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs, by increasing their costs of complying with the reporting requirements that accompany the individual mandate. Third, the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. Fourth, on the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.

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Comments

Doesn’t change the fact that in the interim the private health insurance industry has been radically altered and and it’s highly unlikely that whatever rises from the ashes of Obamacare is going to much resemble what preceded it.

    redc1c4 in reply to txvet2. | December 18, 2019 at 7:35 pm

    that was the whole idea…

      notamemberofanyorganizedpolicital in reply to redc1c4. | December 18, 2019 at 7:49 pm

      Which gives us the excuse to break up all the “health” “insurance” (sure, sure) companies into about 50,000 parts.

      Today’s technology means small is beautiful and efficient.

        “Which gives us the excuse to break up all the “health” “insurance” (sure, sure) companies into about 50,000 parts.

        Today’s technology means small is beautiful and efficient.”

        FWIW – there are a lot of myths and misunderstanding as to what drives the costs of health care. While logic would seem to dictate that increase in consumer choice would help to reduce health care costs, it often has the opposite effect.

        The current driver of health care costs is “market share”, which the consumer has very little influence. For the insurance company, the larger their market share, the better they can control what they will pay out in claims. For the surgical centers and hospitals, the larger their market share, the better they can keep payments to them high. For example a hospital chain of 10 hospitals in a metroplex/city can dictate higher reimbursements than a single hospital in the same city, irrespective of quality of care.

        Insurance companies denying coverage in order to maximize profits is also a major myth. If the insurance company denies coverage too often, then the large group plans will switch insurance companies, thus losing revenue from the lost group plan, but also lose market share and market power and therefore have less power to keep agreed reimbursements low.

        That being said, I dont have a solution. But what I can say is that until you have a complete grasp of the fiscal dynamics of health care costs, you can possibly propose a soundbite solution.

      artichoke in reply to redc1c4. | December 22, 2019 at 1:33 am

      There was a lot of other crap in Obamacare designed to force changes. Like reimbursements to city hospitals about twice the amount of what was paid to small rural hospitals. Small hospitals had to close. What sense does that make? None at all, but Obama wanted to force healthcare into the cities and prevent people from having good healthcare in rural America.

Don’t worry, Roberts will resurrect it

notamemberofanyorganizedpolicital | December 18, 2019 at 7:06 pm

So when does the “head” get cut off…….

This is why Trump’s legacy in the judiciary is so
Important. When Trump is gone, many spineless Republicans will return to their former ways. Many have never left, to be honest.

We can’t count on them when it comes to DACA, Obamacare and so much else. Having the judiciary to justly uphold rule of law and stop this ongoing Marxist subversion of our constitution is critical.

    redc1c4 in reply to PrincetonAl. | December 18, 2019 at 7:36 pm

    it’s also why RFJT needs four more years in office.

      redc1c4 in reply to redc1c4. | December 18, 2019 at 7:37 pm

      “PDJT”

      stupid fingers.

        notamemberofanyorganizedpolicital in reply to redc1c4. | December 18, 2019 at 7:51 pm

        QWERTY foils again!

        Darn you QWERTY!!!!!!!!!!!!

          You know that qwerty was laid out with two criteria, right?
          To prevent fast typing, to the original 19th century hand-made machine wouldn’t jam while being demonstrated, and to allow its name “Typewriter” to be clacked out using only the keys in the top row.
          Once enough people became familiar with it, there was too much legacy effect to change it.

    beagleEar in reply to PrincetonAl. | December 21, 2019 at 7:21 am

    Spineless? Not. More like desirous of more government, more crony gov-corp-erment, more bureaucracy and as totally earned, deserved reward to which they were entitled at birth, more position, perks and $$ for themselves.

I’ve scanned this decision and I disagree with it because it has a fundamental flaw: it ignores the fact that the Supreme Court’s NFIB decision said that there is no mandate. This decision keeps on saying that the plaintiffs were compelled to buy insurance because the law requires it, albeit without penalty for noncompliance; but the Supreme Court explicitly said the opposite, that there is not and never was any legal requirement to buy insurance. It explicitly said mandates are unconstitutional, and that had the law contained one it would have struck it down; the only reason it didn’t was because a court can’t strike down laws that don’t exist. Therefore this case should never have started.

    HuskerHomer in reply to Milhouse. | December 18, 2019 at 8:35 pm

    No, you’ve missed the relevant point; the “mandate” portion of what Roberts concluded was a taxing provision (although repeatedly called a “mandate” by Roberts over 100 times), without the necessary taxing provision, has now morphed into true mandate.

    His opinion summarized his conclusion as follows:

    “The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax.”

    In other words, Section 5000A, which contained both the “mandate” to purchase insurance and the “tax” for failing to do so, was upheld in its entirety because the whole thing was viewed as a tax: in other words, the tax is only imposed if you don’t buy insurance. Roberts’ opinion basically comes down to “Congress isn’t saying you have to buy insurance, that is just the basis for determining whether a tax is owed.” In fact, Roberts’ opinion discusses whether one can be taxed for NOT doing something, and concludes that because Congress can levy a tax simply on existing (capitation), then it must also have the power to tax not doing something. So, the mandate isn’t a “mandate” because it is really just a trigger for a tax.

    Now, because there is no longer any “tax” provision in Section 5000A, that section has morphed into the thing Roberts said is impermissible: a statutory obligation to purchase insurance. And that is exactly how the Fifth Circuit summarizes its conclusion: “Third, the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.” What was once simply a trigger for a tax, is now, standing on its own, an impermissible mandate.

      ScottTheEngineer in reply to HuskerHomer. | December 18, 2019 at 9:05 pm

      Good write up. Exactly.

      Not a lawyer but it seems to me that Roberts, with a gun to his head, gave them the Frankenstein ruling they demanded but attached a secret cyanide pill capable of destroying the beast he created.

        beagleEar in reply to elle. | December 21, 2019 at 7:31 am

        Sounds like reading order into chaos. Roberts was, for whatever reason, pretzeling his decision so as to allow the law to be enacted without amending the Constitution. Perhaps he honestly believed that such a baked pastry was an appropriate response to public demand, perhaps he had other reasons. Mind reading is hard.
        Complicated plans in politics have and will always exist, but they rarely work as intended. I suspect that the current situation stems from the empty space in the pretzel rather than, err, intelligent design 😉

      judgeroybean in reply to HuskerHomer. | December 19, 2019 at 12:53 am

      Is the left blackmailing CJ Roberts because of his adoption issue? Blogger at another site suggested President Trump Pardon CJ Roberts so the left can no longer blackmail CJ Roberts.

        Milhouse in reply to judgeroybean. | December 19, 2019 at 2:05 am

        There is no “adoption issue”. The whole insane idea was invented by crazy people on the right who are the exact equivalents of the people who accuse Trump of antisemitism, or who claim the 0bamas were disbarred, Bush Jr was AWOL, the Clintons murdered a bunch of people, and Bush Sr flew to Iran to get them not to free the hostages before the election, etc. These are all insane fantasies without a shred of evidence.

          beagleEar in reply to Milhouse. | December 21, 2019 at 7:34 am

          Well, Bush Jr did flake out on his AF service. Being Bush Jr, he may have crony’d out of being arrested as AWOL, but he sure as H didn’t use that top-of-the-line training to fly in combat, not even freight missions.

        artichoke in reply to judgeroybean. | December 22, 2019 at 1:37 am

        I’d rather see the blackmail information leaked, if that’s what it is. Then either he leaves and Trump can appoint a better CJ, or he weathers the storm and is no longer vulnerable to the blackmail.

      Milhouse in reply to HuskerHomer. | December 19, 2019 at 2:01 am

      But that’s just not true. It hasn’t morphed into anything. One of the key grounds on which Roberts found that there was no mandate was that the government conceded that it was perfectly lawful for someone to choose not to buy insurance, and to make the “shared responsibility payment” instead. As he said, that is not how mandates work. It is not lawful for someone to choose to commit a crime and pay the fine. Such a person is a scofflaw, an offender, a criminal. And yet here the government was not only saying this was a perfectly legitimate choice for people to make, but actually expected significant numbers of people to do so, and was budgeting for the revenue it expected to raise from them. Abolishing the payment didn’t change that. If it was lawful before to not buy insurance and pay the tax, then it is now equally lawful to not buy insurance and not pay the tax which no longer exists.

        HuskerHomer in reply to Milhouse. | December 19, 2019 at 3:31 pm

        The government advanced two arguments: (1) it had the power to impose a mandate; and (2) if not, then the mandate wasn’t really a mandate, but just part of a tax provision. Roberts ruled against the first argument, but then adopted the second argument, finding that the mandate wasn’t really a mandate, but was part of a tax provision — that it was designed to raise revenue. The argument was, as Roberts set out and I set out in my earlier comment: “That, according to the Government, means the mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax.”

        In getting to that, Roberts said:

        “The most straightforward reading of the mandate is that it commands individuals to purchase insurance. After all, it states that individuals “shall” maintain health insurance. 26 U. S. C. §5000A(a). Congress thought it could enact such a command under the Commerce Clause, and the Government primarily defended the law on that basis. But, for the reasons explained above, the Commerce Clause does not give Congress that power. Under our precedent, it is therefore necessary to ask whether the Government’s alternative reading of the statute—that it only imposes a tax on those without insurance—is a reasonable one.”

        So, Roberts basically held that while the language looked like a mandate, it could also be read to be what the government argued in the alternative: not really a requirement to buy insurance, just a condition that triggers a tax.

        You argue “As he said, that is not how mandates work. It is not lawful for someone to choose to commit a crime and pay the fine. Such a person is a scofflaw, an offender, a criminal.” But Roberts REJECTED that approach when he rejected the language being a mandate: because the whole provision could be read as nothing more than a tax – and NOT a penalty (and Roberts thoroughly discussed as to why even though it was called a penalty, he would read it as being a tax instead).

        So, in reading the whole provision as simply authorizing a tax and the condition upon which the tax would be collected, Roberts said the “mandate” really wasn’t a legal requirement to buy insurance (accepting the government’s argument on that point). It was not a requirement to buy insurance or pay a penalty for doing so (no criminal behavior for not buying insurance, no being an offender or a criminal); the whole provision was just a taxing provision.

        Then, Congress deletes the revenue-raising provision, leaving behind only the language requiring everyone to buy insurance. Well, there goes the ability to characterize the whole thing as just a taxing provision. Instead, you’re left with simply a law that mandates everyone buy insurance. Question is, is such a law consitutional? The question is not, as you suggest, whether it is now lawful for a person to not buy insurance and not pay a tax that no longer exists, but the questions are: (1) without the revenue raising portions of the statute that were deleted, does the remaining language now constitute an actual mandate to buy insurance (Fifth Circuit correctly says yes, as Roberts’ opinion clearly says the only way the mandate wasn’t a legal requirement to buy insurance was because it was really just part of a tax provision), and (2) if the language is now a mandate, whether Congress can constitutionally impose a mandate to buy insurance (and the Fifth Circuit, again following Roberts’ lead, says nope, no such authority exists).

        So, again, the Fifth Circuit got it right. The mandate language DID morph into something it was not previously, due to the deletion of the revenue-raising/tax language.

          beagleEar in reply to HuskerHomer. | December 21, 2019 at 7:39 am

          That lays it out well, I think. Oversimplified, it’s as if you have a bridge held up at two ends, and you demolish one. The result is not half a bridge, it’s an impassible or invalid bridge. No conspiracy, just Tinkertoys.

Voice_of_Reason | December 19, 2019 at 7:47 am

“radical right wing judges”? you mean judges who follow the constitution!

    150 years ago, “Radical Republican” meant someone who not only thought that Black should be free, but should also be able to vote and hold office!

Oh, so now it turns into a ” Too big to fail “

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