UPDATE: The fate of the #ACA will be decided within the next 50 days.

UPDATE 4/03/21: I've confirmed with a highly-trusted source that this isn't happening...at least not before the Supreme Court issues their ruling, anyway.

As noted below (scroll all the way down), it appears that a $1.00 penalty would be too small to make the reconciliation cut, which means the only way to #MootTheSuit via reconciliation would be to change the mandate back to an amount large enough to have a significant impact on the budget...which presumably means several hundred dollars.

I mean, if they're gonna do that, they might as well just restore it to the original $695/2.5% of income while they're at it.

I don't see that happening either since President Biden promised not to raise taxes on households earning less than $400K/year, and the Dems are loathe to fully restore the mandate at the federal level given the massive backlash it caused them back in 2010 anyway.

This would leave mooting the suit via regular Senate order, which presumably would require...you guessed it...killing the filibuster.

As far as I can tell, this means that the strategy is a) hope SCOTUS spares the ACA, or b) if they do strike most/all of it down, to revisit the filibuster then to see if Manchin, Sinema, etc. see saving healthcare coverage for tens of millions of people as being enough to change their POV.

UPDATE 4/05/21: OK, a small ray of light today: Apparently the Senate parliamentarian ruled today that the Dems can squeeze in an extra reconciliation bill this year. That wouldn't resolve the "$1.00 penalty is too small" issue, but it would give them some breathing room to go ahead and restore the mandate penalty to, say, $100 or $300 or whatever the minimum is in order to "count" as impacting the budget enough to get included in a reconciliation bill if necessary.

UPDATE 4/20/21: Given that the odds of #MootTheSuit happening prior to the SCOTUS ruling is virtually zilch, I've changed the headline. The current Supreme Court session runs through the end of June, and the next scheduled date for SCOTUS opinions to be issued is Thursday, April 22nd. The CA v. TX ACA decision may be announced then...or anytime between then and June 30th.

The federal lawsuit to strike down the entire Affordable Care Act was heard by the U.S. Supreme Court last November, a week after the election.

While the hearing happened on 11/10, the actual decision in the case isn't expected to be announced until sometime this spring (likely April or later).

There's no guarantee that they'll strike it down, even with a 6-3 conservative majority...but if they do, tens of millions of people would lose their healthcare coverage as soon as May 1st, 130 million Americans with pre-existing conditions would lose critical protections, and the entire U.S. healthcare system would be thrown into chaos...in the middle of a global pandemic.

Fortunately, the fact that they aren't expected to issue their ruling until April at the earliest gives Democrats a window of opportunity to render the entire case moot before the decision is announced at all, via one of three paths:

  • 1. Pass a simple bill changing the federal mandate penalty to an amount higher than $0.00.
  • 2. Pass a simple bill clarifying that the mandate is separate from the rest of the ACA.
  • 3. Pass a simple bill striking out the underlying mandate language itself.

University of Michigan law professors Nicholas Bagley & Richard Primus explained these solutions over two years ago, long before the case ever made it to the Supreme Court...but at the time, of course, it was hypothetical since none of these bills had any chance of passing the Senate and would obviously be vetoed by Trump if they somehow did anyway:

Congress could fix the problem by saving, severing, or sinking the mandate. First, Congress could make the mandate constitutional again by raising the penalty for not having insurance from zero dollars, where Congress set it in 2017, to one dollar. Second, Congress could declare the individual mandate severable from all other parts of the ACA. Third, it could repeal the mandate—something that might once have wrecked the ACA but that now would have little or no effect on the rest of the regulatory framework.

The first option—saving the mandate—would undo O’Connor’s complaint against the ACA, which is that the mandate can’t be justified as a tax now that Congress has reduced the “penalty” for not carrying insurance to zero.

...The second option—a statute declaring the mandate severable— would solve the problem by making explicit what should have been clear already: In setting the penalty at zero, Congress indicated that Obamacare can exist without a mechanism coercing people to buy insurance. Making that point explicit shouldn’t be necessary, but it would put a definitive stop to the litigation.

The third approach might be the simplest: Repeal the mandate. Without a penalty attached, the mandate isn’t doing anything anyhow. (Set aside here the debate about whether a mandate with a stiffer penalty might be good policy because, as matters stand, Congress is not going to enact that policy.)

It's my understanding that the second and third options would have to be done via regular order in the Senate, which means 60 votes with the filibuster or 51 without it...and since it appears that at least 2 Democratic Senators are pretty dead set on not killing the filibuster, that means neither of those are likely to happen, since the odds of getting 10 Republican Senators onboard is pretty much nonexistent.

That leaves the first option: Raising the federal mandate penalty back up again. Again, it doesn't necessarily have to be raised back to the original $695 per person; it could be set to as little as $1.00, which also underscores how absurd this case is.

Changing the mandate penalty directly impacts the federal budget, which is why it could be included as part of the pending COVID-19 relief bill being prepared for reconciliation. In fact, reconciliation is exactly how the mandate penalty was dropped to $0 in the first place four years ago.

As for the timing, it would be best if this were to be done before SCOTUS issues their ruling; doing so would pretty much immediately moot the entire issue (although if the penalty was ever dropped down to $0 again in the future, we'd presumably be right back where we are now). However, Professor Bagley has also corrected a misunderstanding of mine about the possibility of bumping the penalty back up again after SCOTUS' decision is issued:

When the Supreme Court declares a law unconstitutional, all it's saying is that it won't enforce the law. The executive branch goes along with that declaration, usually willingly. But the law still remains on the books. So adding a $1 mandate should still do the trick, even if the decision takes immediate effect.

But lots of people share your intuition: that what the Supreme Court does is "strike down" laws. And that intuition is REALLY strong. So if Dems were to say, "Well, we're adding a $1 penalty, that should fix it," they'd get pummeled over that. And I could imagine a skittish Machin or Sinema not wanting to go along with that.

In other words, Democrats could save the ACA by bumping the penalty back up to $1 or more...but it would cause political fallout.

Of course, not saving the ACA when they could do so would cause far more political fallout, to say the least...and I'm pretty sure Joe Manchin and/or Kirsten Sinema would face a far bigger backlash from not doing so under those circumstances than they would by doing so.

All that being said, it would still be far better to #MootTheSuit RIGHT NOW, when they have a larger reconciliation bill in the works which even includes beefing up the ACA as part of it. And if they don't include it in this one, they'd have to use up their second reconciliation option to address the problem later on (the Senate usually only gets to use reconciliation once per year, but it was never used last year so apparently the Dems have a spare).

UPDATE: Oh for heaven's sake:

I am told by budget folk more expert than i am (and i am pretty expert - have covered 15 reconciliation bills) that a $1 penalty might not pass muster either because it would not have a large enough impact on the budget. eliminating it obviously had a big effect.

— julie rovner (@jrovner) February 3, 2021

This is a concern I’ve also heard @larry_levitt raise in regards to having a “meaningful” penalty/dollar amount.

— Andrew Kelly (@askellyphd) February 3, 2021

(sigh) If that's true, and if the minimum amount required turns out to be, like $500 or whatever, then they might as well just restore it to the full $695 / 2.5% of income after all.