Appeals Court Rules ACA's Individual Mandate Is Unconstitutional

Alicia Ault

December 18, 2019

A federal appeals court has ruled that the individual mandate of the Affordable Care Act (ACA) is unconstitutional, but the panel sent the case back to a lower court to decide how much of the remainder of the law could topple along with it.

The three-judge panel of the New Orleans-based US Fifth Circuit Court of Appeals said, "The individual mandate is unconstitutional because, under [a previous ruling, National Federation of Independent Business v Sebelius], it finds no constitutional footing in either the Interstate Commerce Clause or the Necessary and Proper Clause."

The ruling upholds a December 2018 US District Court decision in which Judge Reed O'Connor found that the individual mandate that most Americans must have health insurance or pay a fine was unconstitutional, and that without it the ACA itself was invalid.

In sending the case back to a Texas district court, however, the federal panel is asking for a central question to be resolved: whether the individual mandate is "severable" from the rest of the law, leaving it intact.

If the district court eventually decides that the individual mandate cannot be severed from the rest of the ACA, the entire law will likely be ruled invalid, and some 24 million Americans could lose health coverage.  

"Today's ruling is the result of the Trump Administration and congressional Republicans attempting to make dangerous health policy using the courts since they failed to succeed in Congress," House Ways and Means Committee Chairman Richard E. Neal (D-MA) said in a statement. "This is a blow to our nation's health care system and the millions of Americans who have gained coverage and protections under the Affordable Care Act. Democrats will continue to fight to protect Americans' access to quality, affordable care."

Some groups are applauding the decision, though. The Citizens' Council for Health Freedom (CCHF), which filed an amicus brief with the Fifth Circuit arguing against the ACA, said it wants more.

"We are pleased with the Fifth Circuit Court of Appeals ruling, but it didn't go far enough," said Twila Brase, president and cofounder of CCHF, in a statement. "The individual mandate cannot be severed from the rest of the 2,700-page Affordable Care Act, thus the court should have ruled that the entire law is invalid, as the lower district court found.

"As the Court notes in the first paragraph of the ruling, we argued in our Amicus Brief, filed jointly with the Association of American Physicians and Surgeons, that the Act 'has deprived patients nationwide of a competitive market for affordable high-deductible health insurance,' leaving 'patients with no alternative to…skyrocketing premiums,' " Brase added. "Sending it back to the lower court, which already ruled the right way, continues to deprive citizens and patients of the affordable coverage that freedom from Obamacare would bring."

Future Uncertain

The ruling in Texas v Azar is not a surprise, as during oral arguments in July, as reported by Medscape Medical News, at least two of the three judges — Jennifer Walker Elrod, appointed by President George W. Bush in 2007, and Kurt Engelhardt, appointed by President Donald J. Trump in 2018 — appeared to be more receptive to the arguments of a group of 18 Republican states and two individuals seeking to invalidate the ACA.

Judge Carolyn Dineen King, appointed by President Jimmy Carter in 1979, did not comment during the hearing.

The Trump administration chose not to defend the ACA, but it does not seem entirely prepared for what might happen if the law is overturned. In a briefing before the Fifth Circuit hearing, the administration argued that, if ultimately the law is ruled unconstitutional, it should be struck down only in the states seeking to overturn the law.

"A lot of this has to get sorted out — it's complicated," said August E. Flentje, a US Department of Justice lawyer, at the oral arguments in July.

For now, though, the ACA remains.

"In 2012, the Supreme Court upheld Obamacare, despite serious constitutional issues with the federal government forcing Americans to purchase a product from a private company. Until an ultimate decision is made by the Supreme Court or Congress decides otherwise, the Affordable Care Act will remain the law of the land," Senate Finance Committee Chairman Chuck Grassley (R-IA), said in a statement.

And those who have led the court battle to keep the ACA intact plan to keep fighting. "For now, the President got the gift he wanted — uncertainty in the healthcare system and a pathway to repeal — so that the healthcare that seniors, workers and families secured under the Affordable Care Act can be yanked from under them. This decision could take us to a dangerous and irresponsible place, not just for the 133 million Americans with pre-existing conditions, but for our seniors who use Medicare, our children under the age of 26, and the 20 million additional Americans covered directly through the ACA marketplace. California will move swiftly to challenge this decision because this could mean the difference between life and death for so many Americans and their families," California Attorney General Xavier Becerra said in a statement.

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