Those Obamacare Nullification Amendments Could Make a Big Comeback Post-SCOTUS

States like Ohio might be constitutionally prohibited from moving on state exchanges

Sisters and Tea Party members of Atlanta, Georgia, Judy Burel (L) and Janis Haddon (R), protest the Obamacare in front of the U.S. Supreme Court March 27, 2012 in Washington, DC. 
National Journal
March 2, 2015, 3 p.m.

Every­body laughed off the con­sti­tu­tion­al amend­ments that a hand­ful of states ad­ded over the past few years — pro­hib­it­ing the im­ple­ment­a­tion of the Af­ford­able Care Act, spe­cific­ally the in­di­vidu­al and em­ploy­er man­dates — as mean­ing­less mes­saging meas­ures.

But if the Su­preme Court rules in King v. Bur­well to in­val­id­ate tax cred­its on the 30-plus states that used the fed­er­al Health­ web­site, it might not be so funny.

If the Court dis­al­lows tax cred­its on the fed­er­al ex­change, most states could pre­vent their res­id­ents from los­ing fin­an­cial help by cre­at­ing their own ex­change. They might not, but they could. Prob­lem solved.

But for this hand­ful of states, that might not be as easy as it sounds. Those con­sti­tu­tion­al amend­ments that were seem­ingly use­less at the time could gum up the works. Some of the law’s op­pon­ents already have ar­gued that the amend­ments would pro­hib­it those states from set­ting up an ex­change — in ef­fect, for­bid­ding them from fix­ing the law with­in their bor­ders.

Alabama, Ari­zona, Ohio, Ok­lahoma, and Wyom­ing have passed anti-Obama­care amend­ments, ac­cord­ing to the Na­tion­al Con­fer­ence of State Le­gis­latures. And more than 1 mil­lion people in those five states would lose tax cred­its if the high court rules against the Obama ad­min­is­tra­tion later this year, ac­cord­ing to es­tim­ates from the Kais­er Fam­ily Found­a­tion.

The state amend­ments, which the con­ser­vat­ive ad­vocacy group Amer­ic­an Le­gis­lat­ive Ex­change Coun­cil helped to ad­vance, don’t say any­thing spe­cif­ic about es­tab­lish­ing an ex­change. But read between the lines, and the states could run in­to yet an­oth­er round of Obama­care law­suits if they try to sidestep the court’s de­cision.

And if noth­ing else, the law’s op­pon­ents have proven li­ti­gi­ous.

Take Ohio’s amend­ment, with the ne­ces­sary caveat that each state’s meas­ure is dis­tinct and ex­ists in its own leg­al set­ting. It pro­hib­its any state or fed­er­al law from com­pel­ling — with, for ex­ample, the man­date pen­al­ties — any­body from par­ti­cip­at­ing in a health care sys­tem. At the mo­ment, that doesn’t mat­ter — the U.S. Con­sti­tu­tion’s Su­prem­acy Clause means that the Af­ford­able Care Act trumps any state-level meas­ures to stop it.

If the court rules against the Obama ad­min­is­tra­tion and nixes the tax cred­its, though, the man­dates are ef­fect­ively neutered. The em­ploy­er man­date in par­tic­u­lar is triggered by the cred­its. No tax cred­its, no pen­al­ties — and no prob­lem with the freshly amended state con­sti­tu­tion, though there will be the tens of thou­sands who lose fin­an­cial help to pay for in­sur­ance.

But if the state moved to set up an ex­change, thereby sub­ject­ing its res­id­ents to the man­date pen­al­ties again, op­pon­ents could ar­gue that it was vi­ol­at­ing the con­sti­tu­tion­al amend­ment, which passed in 2011 with a nearly two-thirds vote.

“That is the po­ten­tial prob­lem,” said Jonath­an Adler, a law pro­fess­or at Case West­ern Re­serve Uni­versity who helped craft the cur­rent chal­lenge to the Health­ sub­sidies. “Tax cred­its trig­ger the em­ploy­er man­date pen­al­ties and al­ter the in­cid­ence of the in­di­vidu­al man­date pen­alty.”

Ohio Gov. John Kasich hasn’t ruled out try­ing to set up an ex­change. “There are a lot of op­tions you have to think about,” he told Bloomberg Polit­ics’ Dav­id Wei­gel. But if he did, he could be ask­ing for trouble. The con­ser­vat­ive 1851 Cen­ter for Con­sti­tu­tion­al Law in Colum­bus already ar­gued in 2012 that the state’s con­sti­tu­tion­al amend­ment pre­ven­ted the es­tab­lish­ment of a state-based ex­change.

“Ohioans cre­ated a likely-in­sur­mount­able leg­al hurdle to state of­fi­cials im­ple­ment­ing Obama­care in Ohio through an Obama­care-com­pli­ant state health care ex­change,” the group wrote.

A few of the law’s sup­port­ers con­sul­ted by Na­tion­al Journ­al be­lieved that state of­fi­cials should have the leg­al lee­way to cre­ate an ex­change des­pite the amend­ment. “The Ohio stat­ute is worded in a way that would seem to give the gov­ernor a lot of flex­ib­il­ity,” said Nich­olas Bagley, a law pro­fess­or at the Uni­versity of Michigan.

Over­all, 8 mil­lion people could lose their health in­sur­ance if the Su­preme Court rules against the Obama ad­min­is­tra­tion. That’s prob­ably why some gov­ernors like Kasich haven’t com­pletely ruled out set­ting up a state ex­change as a post-de­cision work­around.

But if Kasich wanted to amend the state con­sti­tu­tion again to avoid any leg­al chal­lenges, he’d need 60 per­cent of the Re­pub­lic­an-dom­in­ated le­gis­lature to sign off on it, and then a ma­jor­ity of the elect­or­ate, which over­whelm­ingly voted four years ago to ap­prove the cur­rent amend­ment. It’s a sim­il­ar ar­range­ment in the oth­er states: A multi-step pro­cess, in­volving either law­makers or pe­ti­tion­ers pro­pos­ing the new amend­ment al­low­ing for a state ex­change, and then a ma­jor­ity of voters ap­prov­ing it.

No mat­ter how things might change in a post-King uni­verse, that’s a tall or­der.

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