Justice Department Declares Obamacare Individual Mandate Unconstitutional

Written by: Stefan M. Kløvning – Twitter: @MisesRevived

Washington D.C., USA – Obama’s signature legislation Patient Protection and Affordable Care Act (colloquially known as Obamacare), has been put under tough pressure by the Trump administration once again as the Justice Department on Thursday declared that the requirement to buy healthcare would be unconstitutional after the Tax Cuts and Jobs Act comes into effect in 2019, which will reduce the individual mandate tax penalty to $0.00.

Trump has made it clear since his election campaign that an important goal for his presidency is to repeal and replace Obamacare, which his administration has failed multiple times to do. The tax reform seems to have been a calculated move by the Trump administration to justify the recent decision by the Justice Department as Trump exclaimed after the bill had passed that ‘we have essentially repealed Obamacare.’

Even then, the bill in itself wasn’t enough to declare Obamacare unconstitutional. The decision was made in light of the lawsuit by a coalition of 20 Republican states against the federal government arguing that since the tax reform bill would make the individual mandate penalty void and that the rest of the law should be invalidated because it hinges on that very mandate. Many of these states took the same position in the Supreme Court in 2012. According to Politico, conservatives were stunned when Chief Justice John Roberts argued that Obamacare wasn’t valid under the Commerce Clause, but rather because the penalty was a tax. Without there being any government revenue by the individual mandate penalty anymore, the conservatives argue that the nullification of the justification makes the individual mandate unconstitutional.

Attorney General Jeff Sessions wrote to House of Representatives Speaker Paul Ryan defending his decision:

After careful consideration, and with the approval of the President of the United States, I have determined that, in Texas v. United States, the department will not defend the constitutionality of [the individual mandate], and will argue that certain provisions of the Affordable Care Act (ACA) are inseverable from that provision.

The Attorney General did not indicate in this letter that the entirety of Obamacare doesn’t pass the requirements for being declared constitutional. The ‘certain provisions’ they won’t defend refer mostly to the pre-existing conditions provision, and one forbidding insurers from charging people in the same community different rates based on gender, age, health status, and other factors.

The Justice Department has received a lot of backlash for the decision, as would be expected. Emeritus professor at Washington & Lee University Timothy Jost argued that nothing would happen based on the decision yet, but if the judge buys the argument of the administration and the ruling is upheld on appeal, ‘52 million Americans with preexisting conditions could face denial of coverage or higher premiums. The administration’s argument would also allow insurers to charge women, older people, and people in certain occupations higher premiums.’ Additionally, he proclaims that it would not only ‘jeopardize’ the coverage for consumers in the individual market, but that those with pre-existing conditions who have employer-sponsored coverage may not be able to get individual market coverage if they lost or left their jobs.

Trump declared Obamacare as ‘dead’ in April. Although it still persists attacks from the Republicans, one may wonder if this calculated move by the Trump administration will ultimately lead to the actual ‘death’ of Obamacare, and what may come in its place.