MacIver News Service | February 27, 2018
By Chris Rochester
MADISON, Wis. – The rickety legal case for Obamacare’s core mandate just might be about to topple – along with the entire law.
Wisconsin and Texas on Monday took the lead in filing a new 20-state lawsuit alleging that Obamacare is unconstitutional now that the law’s individual tax penalty has been repealed.
The U.S. Supreme Court upheld Obamacare in 2012 on the shaky notion that the law’s individual mandate and associated fine for going uninsured was actually a tax, which Congress has the power to lay and collect. But a sweeping Republican tax reform package passed in December – in addition to overhauling the tax code – repealed the Obamacare penalty, a deeply unpopular fine paid by individuals who in many cases can’t afford insurance coverage.
The new lawsuit contends that since the high court’s 2012 ruling in favor of Obamacare hinges on the individual mandate being defined as a tax, then the individual mandate is unconstitutional now that the tax is gone. Since there is no “severability” clause in the law, striking down the individual mandate would strike down the entire law, the states argue.
When delivering its infamous ruling in the 2012 NFIB v. Sebelius case, the Supreme Court’s majority wrote that without the penalty – interpreted as a tax in the court’s tortured majority opinion – the individual mandate was an unconstitutional exercise of federal authority.
“The commerce power, Chief Justice Roberts explained, gives Congress the power to regulate commerce, and not to compel commerce, as Obamacare does,” Texas Attorney General Ken Paxton said in a statement.
“Since the Supreme Court has already held that Congress has no authority to impose such a mandate on Americans, absent invoking its taxing authority, the ACA is now unconstitutional,” the Wisconsin Department of Justice stated in a press release.
Obamacare’s very existence rests upon the “flimsy support of of Congress’ authority to tax. Congress has now kicked that flimsy support from beneath the law,” Paxton said.
“Obamacare’s irrational design wreaks havoc on health insurance markets,” Wisconsin Attorney General Brad Schimel said in a similar statement.
Obamacare has made a mess of the individual insurance market in Wisconsin and across the country. In 2018, premiums on the individual market spiked by 36 percent in Wisconsin. The year before, the increase was nearly 16 percent.
Insurers are also fleeing the market in droves, forcing 75,000 Wisconsinites off their plans last year alone. Deductibles are so high that many people who have the unaffordable coverage can’t even afford to see a doctor.
“Obamacare causes premiums to rise and coverage to fall, forcing Wisconsin and other states to take extreme, costly measures to protect their citizens’ health and pocketbooks,” Schimel said in the statement.
In response to this year’s 36 percent increase in premiums and growing market instability, Gov. Scott Walker on Tuesday signed a “reinsurance” plan designed to stanch the bleeding endured by Obamacare enrollees in Wisconsin. Under the plan, the state will cover up to 80 percent of private insurance companies’ claims that fall between $50,000 and $250,000. Administration officials say this would create an incentive for insurers to hold costs to below that upper limit.
But the plan will still cost taxpayers a lot of money – $200 million per year, with $50 million coming from the state budget and $150 million coming from the feds. The $50 million state portion will be paid for by savings in the state’s behemoth Medical Assistance program, officials say.
“Our Health Care Stability Plan is our solution to Washington’s failure; we want to provide health care stability and lower premiums for Wisconsin,” Walker said in a statement Tuesday when he signed legislation enacting the reinsurance plan.
“Gov. Walker did authorize the lawsuit because it questions the constitutionality of Obamacare,” Walker spokeswoman Amy Hasenberg told MacIver News. But she added that as long as Obamacare remains law, the state will continue to take steps to help Wisconsin families struggling under Obamacare.
“This is why Governor Walker created his Health Care Stability Plan which will help bring premiums down for those on the individual marketplace, and create stability for seniors and those with preexisting conditions,” Hasenberg said.
“With the passage of Governor Walker’s full Health Care Stability Plan, Wisconsin will have protections in place to ensure coverage for those under Obamacare if the law is eliminated,” she said.
Such plans aimed at cleaning up after Obamacare may not be necessary for long if the Supreme Court agrees with the 20 plaintiff states – and itself in the NFIB v. Sebelius decision – and strikes down the law.
Other states taking part in the lawsuit are Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Utah, and West Virginia.