The 5th Circuit Court of Appeals' reluctance to decide the fate of the Affordable Care Act cuts a break for the Republican lawmakers who sought to topple it while sowing uncertainty into healthcare markets that only recently found their footing.
The 5th Circuit ruled 2-1 on Wednesday that the already toothless individual mandate is unconstitutional but remanded the case back to a federal judge in Texas to determine how much of the landmark healthcare law must fall along with it. U.S. District Judge Reed O'Connor previously struck down the ACA in entirety.
What some observers saw as the appellate court's unwillingness to get its hands dirty ensures that the lawsuit, known as Texas v. U.S., will drag on beyond the 2020 presidential election. While the ACA remains the law of the land, the uncertainty around its future could once again wreak havoc on the individual health insurance exchanges.
"That means more uncertainty in the healthcare markets about the ACA's future, and it also means that it will be less evident to the voters what's going on, which will make the voters less able to hold the administration accountable at the polls for its efforts to undermine the law," said Abbe Gluck, a Yale University law professor.
What happens next is up in the air. California Attorney General Xavier Becerra said Wednesday that his state is prepared to appeal to the Supreme Court, but Thursday suggested the coalition of 20 Democratic states that defended the ACA in the face of the Republican state challenge would decide the next steps as a team.
Some legal experts doubt that the high court would take the case right away. If the Supreme Court decided to hear the case before O'Connor gets another swing at it, it's unlikely the justices would hold arguments before October. A decision would come down in 2021 in that situation, multiple experts said.
David Coale, a Texas-based appellate attorney at law firm Lynn Pinker Cox & Hurst, said it's more likely that the Supreme Court would want the 5th Circuit to first hear the case en banc. The Republicans, Democrats or individual plaintiffs in the lawsuit could ask for a hearing before all of the 5th Circuit judges, or one of the appellate judges themselves could move for one, he said.
If the case instead returns to the district court in Texas, it could be another year before O'Connor issues a second decision. The 5th Circuit tasked him "to employ a finer-toothed comb on remand" as he analyzes which ACA provisions could be severed from the individual mandate. Once he decides, the case would be appealed to the 5th Circuit again.
In the meantime, health insurers, hospitals and patients are stuck in limbo. Risk-averse health insurers could hike premiums or leave the individual market, as they did previously when the ACA's status was uncertain.
"When (insurers) get nervous they want to charge more because of the uncertainty and the risk they perceive of being in the market," Washington Insurance Commissioner Mike Kreidler said during a press conference on Thursday. "We have a competitive market, but at the same time they are not going to throw good money after bad if they think the risk has increased or is getting worse. That's what this court decision has done. It has raised the temperature right now."
Average ACA exchange premiums decreased for the first time in 2019, as insurers that left the market came crawling back.
Even though the 5th Circuit left the bulk of the healthcare law standing for now, most ACA supporters viewed the decision as a loss by sending the case back to a judge who already moved once to ax the law.
"The court sent the case to an extreme right-wing judge who has already made his intentions clear: to strike down as much of the ACA as possible," said Topher Spiro, vice president of health policy at the liberal Center for American Progress.
But there are bright spots for ACA supporters in the 5th Circuit's decision. Conservative and left-leaning legal experts alike had complained that O'Connor did not apply a settled legal doctrine called "severability" correctly when he ruled the ACA invalid in December 2018. That doctrine holds the decision to scrap a piece of a law or destroy the whole thing rests on what Congress would have wanted.
U.S. Circuit Judge Jennifer Elrod, a Republican appointee who wrote the majority opinion, noted that the lower court paid too much attention to the 2010 Congress' description of the mandate as "essential" and not enough to the 2017 Congress' intent when it got rid of the mandate but left the rest of the law on the books.
"It effectively told the district court: The test here is what the 2017 Congress wanted to do," Gluck said.
Many legal experts, including Gluck, have argued there's no question of what the 2017 Congress would have wanted because it's clear what it did: it zeroed-out the individual mandate and chose to keep the rest of the ACA. Whether the lower court changes its mind based on that legal test is unclear. "I'm not optimistic," she said.
The 5th Circuit's decision to remand to the lower court also suggests that it doesn't believe the entire ACA must fall. While the court wrote that O'Connor "cogently explains" why some major provisions, such as the protections for patients with pre-existing conditions, are linked to the individual mandate, he didn't explain how other provisions concerning restaurant menu guidelines and healthcare fraud were intended to work with the individual mandate.
"The basis of the decision suggests that, yes, they think some things are inseverable," said Katie Keith, a Georgetown University law professor. "But clearly they are open to some things being severed alongside the ACA. It's not entirely clear what, but they give us a couple of hints."