Court Finds That the ACA Is Unconstitutional, But the Law is Still in Effect
No doubt you have heard by now about the recent ruling in a case challenging the constitutionality of the Affordable Care Act (ACA), Texas v. United States (also known as Texas v. Azar). A federal district court in Texas held that the entire ACA is unconstitutional because the law is premised on the congressional taxing power, and the tax penalty for not having insurance was effectively repealed in 2017 (by reducing the tax penalty to zero). The taxing power was the basis of the 2012 Supreme Court decision (NFIB v. Sebelius) to uphold the ACA. See Texas Judge Strikes Down ACA as Unconstitutional, But Long Legal Path Remains (FierceHealthcare, Friday, 12/14/18).
Since the court announced its decision on the eve of the last day of this year’s federal open-enrollment season, HHS issued a statement the following day: “The district court decision in Texas v. Azar is still moving through the courts. The Marketplaces are still open for business, and we will continue with open enrollment. There will be no impact to enrollees’ current coverage or their coverage in a 2019 plan.” In a December 17 statement, HHS again said the law is still in effect because the court did not issue an injunction to halt its implementation.
Legal scholars from both sides of the political spectrum seem to agree that the Texas court’s ruling is not well-justified – particularly the holding that the entire law is unconstitutional, since much of the ACA is completely operational without the “individual mandate,” including the Medicaid expansion, various Medicare provisions, and modifications to the Indian Health Service. See Legal Experts Rip Judge’s Rationale for Declaring Obamacare Law Invalid (Washington Post, 12/15/18).
The plaintiffs in the Texas case are attorneys-general from 20 Republican-led states, led by the Texas attorney-general. The defendant is the United States, which normally defends an existing law, but the Trump administration actually agreed with the plaintiffs in part. The administration did not go so far as to argue that the entire law should be invalidated, however. Attorneys-general from a number of Democratic-led states (and DC) were granted the right to intervene as parties to the case, arguing that the entire law should be upheld. Those 17 attorneys-general filed a brief on December 17 asking the judge to clarify that the ACA will remain in effect until appeals are completed. They asked the judge to act on the request by December 21, and to take the legal steps necessary for them to file an appeal. See Coalition of State AGs Challenge Ruling of Unconstitutional ACA (Healthpayer Intelligence, 12/18/18).
The case will be appealed to the U.S. Court of Appeals for the 5th Circuit, and then may be further appealed to the Supreme Court, which would not be able to hear it until its term beginning in October 2019. See Controversial Ruling on Health Care Law Could Face a Skeptical Supreme Court — If It Gets There (Washington Post, 12/17/18).
Congress could amend the ACA in order to make the case moot; for example it could re-impose a tax penalty of any size. The current Congress will not have time to do so, and it is unclear what will happen in the future. Congress Could Get Rid of ACA Lawsuit, But Won’t (Axios, 12/18/18).
See also Court Decision to Invalidate the Affordable Care Act Would Affect Every American (blog of the Commonwealth Fund, 12/17/18).
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