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President Obama flouted legal norms to implement Obamacare. Now Trump may go further.

Wednesday, February 1, 2017

Did President Obama hand the ACA’s enemies a weapon by over-relying on executive power?

By Nicholas Bagley

This month, Kellyanne Conway, senior adviser to President Donald Trump, was asked whether the administration would refuse to enforce the Affordable Care Act’s individual mandate — the requirement that people get health insurance or pay a penalty. “He may,” she said, instantly sending a shiver of fear down the spines of health reform’s supporters. Without the mandate, insurance markets in many states will teeter; some will probably collapse.

Would it be legal for Trump to decline to enforce the mandate?

The short answer is no. The longer answer is more complicated, but it’s also instructive. At key points, President Barack Obama delayed aspects of the ACA in an effort to put health reform on a sound footing. The delays were classic examples of executive overreach; they never should have happened. The Republican-led House of Representatives even sued the president over them.

And now the shoe is on the other foot. With Trump in office, some of Obamacare’s fiercest critics seem almost giddy at the prospect that he might use the same weapon against the act. Pick your favorite tagline: payback is a bitch, what goes around comes around, “I learned it from watching you, Dad!”

What Trump has hinted at, however, would be a far greater overreach than Obama ever attempted. But Obamacare’s critics are unlikely to care. There’s an important lesson here about the accretion of executive power in the 21st century, how law is enforced outside the courts, and what presidential power might look like in an age of Trump.

Obama used executive power to delay an unpopular part of the ACA

The story begins in the summer of 2013. Three years earlier, Democrats had pushed the ACA through on a party-line vote, only to watch Republicans retake the House of Representatives in a midterm election that President Obama called a “shellacking.” The reform bill was slated for full implementation in 2014, but public support was eroding in the face of unremitting Republican hostility.

To dampen the opposition, the Obama administration decided to delay the implementation of the employer mandate for one year. This mandate, which penalizes employers that don’t provide their employees with health insurance, along with the individual mandate, was among the most vilified provisions of Obamacare. “In our ongoing discussions with businesses,” wrote Valerie Jarrett, senior adviser to the president, in announcing the delay, “we have heard that you need the time to get this right. We are listening.”

The decision was front-page news. It was also controversial. Under the Constitution, the president has a duty to “take Care that the Laws be faithfully executed.” Could the president really disregard the ACA’s instruction about when the mandate would take effect?

To defend the delay, the administration argued that the Internal Revenue Service had made a habit, over three presidential administrations, of extending “transition relief” from new tax statutes. That relief gave taxpayers a chance to make the business adjustments necessary to calculate and pay the tax. Since Congress had never objected to the practice, the argument ran, Congress must have thought the delays didn’t constitute the faithless execution of the law; its acquiescence blessed the practice.

This wasn’t a strong argument. The previous delays were usually for days or weeks, at most six months, and concerned narrowly targeted taxes without a lot of revenue at stake. Sure, Congress didn’t object. But that’s probably because it didn’t notice or didn’t care enough to make a stink about it. It was fiction to think that Congress had approved the open-ended power to delay tax statutes. If there were any doubt about that, its fury over the delay of the employer mandate should have dispelled it.

But the Obama administration went ahead anyway. No one immediately sued, probably because no one had standing to object that someone else wasn’t being taxed. (When the House of Representatives later attempted to challenge the delay in court, its challenge was promptly dismissed for want of standing.) Emboldened, the administration delayed the mandate for a second year for midsize employers.

A second aggressive executive move by Obama: fixing the “if you like your plan, you can keep it” mess

Then came a second crisis, and a second presidential intervention. In the fall of 2013, people started getting insurance-cancellation notices, contradicting President Obama’s oft-repeated promise that “if you like your plan, you can keep it.” The ACA had established baseline rules about what counted as minimal coverage, and some of the old plans were now illegal. So insurers had to drop them.

Under intense pressure from an outraged public — and from Republicans making hay of the broken pledge — the Obama administration came up with an “administrative fix.” State insurance commissioners, who have front-line responsibility for overseeing health insurance, were told that they didn’t need to apply the ACA’s new rules to old health plans. At first, the fix delayed the ACA for 10 months; the administration later extended that by another two years.

The law was clear that these plans could not be sold. To defend this delay, the administration invoked its enforcement discretion. Because the executive branch can’t enforce every law to the hilt, it argued, it’s okay under the Take Care Clause to temporarily suspend enforcement in order to smooth a new program’s implementation.

This argument never saw the inside of a courtroom — again, standing was a roadblock. But it also wasn’t a good argument. Yes, the executive branch must make hard choices about how to marshal its limited resources. We don’t want FBI agents ticketing jaywalkers if it means they can’t stop the next terrorist attack. There’s a big difference, however, between setting priorities and suspending a law outright.

After all, the Obama administration could have quietly deprioritized ACA enforcement. Had it done so, however, insurers would still have felt obliged to follow the law — and plans would still have been canceled. Fixing the “like it, keep it” problem required the administration to publicly commit to non-enforcement. In so doing, the administration licensed the regulated community to ignore a congressional statute, a move that was inimical to the Take Care Clause.

It also set a worrisome precedent. Although I’m a supporter of Obamacare, I raised alarms about the delays in the New England Journal of Medicine:

A future administration that is less sympathetic to the ACA could invoke the delays as precedent for declining to enforce other provisions that it dislikes, including provisions that are essential to the proper functioning of the law. The delays could therefore undermine the very statute they were meant to protect—and perhaps imperil the ACA’s effort to extend coverage to tens of millions of people.

A Republican president’s refusal to enforce the individual mandate was exactly what I feared most.

Fairly or not, what went around is coming around

And guess what’s happening now? Trump got the message that he doesn’t need Congress to change the ACA. His very first executive order told his subordinates to consider delaying the implementation of any and all of the ACA’s taxes. And remember: The individual mandate, the Supreme Court famously concluded, is a tax.

But if it wasn’t legal for the Obama administration to delay the law, it wouldn’t be legal for the Trump administration to do so, either. Last I checked, two wrongs don’t make a right.

Trump is also contemplating going further than Obama ever did. Obama’s delays offered transition relief from laws that hadn’t yet taken effect. They didn’t suspend laws that were already in force. And it’s not as if Congress acquiesced to the practice of delaying statutes. To the contrary, congressional Republicans objected repeatedly and angrily, opening themselves to the charge of hypocrisy if they defend Trump’s illegal actions.

I doubt any of this will trouble Trump, however, and, again, experience with the Obama delays suggests why. At the bottom, law is a set of social practices that tell us what’s permissible in a given community. That’s what makes the rule of law robust: the widespread belief that certain things are just not done means the president pays a political price for transgressing legal limits. But it’s also what makes the rule of law so fragile. If the social practice of condemning violations decays, the rule of law decays with it.

During the Obama era, however, almost no left-leaning lawyers spoke out against the delays. Some even defended them: Tim Jost and Simon Lazarus argued, for example, that the “postponements are not refusals to enforce the ACA but temporary course corrections in the interest of effective implementation.” Never mind that this set the stage for a future president to suspend other parts of Obamacare by claiming, however speciously, that it’s the only way to prevent it from collapsing.

At the same time, right-leaning lawyers spun the delays into a larger narrative about Obama’s perfidy and lawlessness. That narrative is exaggerated: As I’ve argued, the record, taken as a whole, “refutes the claim that President Obama has systematically disregarded the ACA’s text or displayed contempt for legal constraints.” But Republicans ran with it anyhow.

I fear we’re about to witness a jarring role reversal. Leftie lawyers will scream about legal violations, both when they happen and when they don’t. Rightie lawyers will offer defenses or stay mute. Lacking trusted mediators, the public will dismiss all this law talk as so much partisan bickering. And Trump will be Trump, law be damned.

Unlike Obama, Trump doesn’t face a hostile Congress

Recent press reports have suggested that Trump “plans to use his administrative powers to dismantle large swaths of the health law well before Congress passes a replacement package.” But there are also reasons Trump might hold off.

Obama tested the limits of executive power because he faced a hostile Congress bent on sabotaging the ACA. Trump doesn’t have that problem: He and Congress are on the same team. Why delay the individual mandate when Congress can end it?

Other parts of the ACA may be more vulnerable to delays. Through the reconciliation process, congressional Republicans can repeal taxes, including the individual mandate, without worrying about the Senate filibuster. But they can’t repeal rules that directly regulate health insurance. One of those rules, for example, requires health plans to cover the “essential health benefits.” Republicans hate that rule — making it a prime target for an administrative attack by Trump.

That said, I worry less about the illegal things Trump might do than all the legal things he can do. To implement health reform, federal agencies wrote hundreds of rules, issued reams of guidance, and made millions of decisions. All of those efforts were undertaken in service of covering the uninsured.

The Trump administration doesn’t appear to share that goal. Dismantling the ACA through the executive branch couldn’t happen overnight: Lots of ACA rules can be revoked or revised only through a lengthy, complex process.

But Trump has four years. He can do a lot of damage in that time, all within the bounds of the law. If he breaks the law, he can do even more. And, in a small way, President Obama made it easier for him to do so.