On December 18, 2019, a federal appeals court in New Orleans ruled that the Affordable Care Act’s individual mandate is unconstitutional, calling into question the future of the entire law.
In a 2-1 decision, the court found that the individual mandate is no longer a tax since the penalty has been reduced to zero. As explained in an article by Kevin Daley with The National Interest, “the mandate is no longer raising revenue,” and therefore “cannot be justified as a tax.”
The article quotes the most important parts of the decision:
- “The individual mandate — most naturally read as a command to purchase insurance — was saved from unconstitutionality because it could be read together with the shared responsibility payment as an option to purchase insurance or pay a tax.”
- “It could be read this way because the shared responsibility payment produced revenue. It no longer does so.”
- “Therefore, the most straightforward reading applies: the mandate is a command.”
- “Using that meaning, the individual mandate is unconstitutional.”
Sent back to lower court
The 5th Circuit Court of Appeals did not make a decision on the rest of the health law. Instead, the three-judge panel sent the case back to U.S. District Judge Reed O’Connor, who ruled that the mandate was unconstitutional back in 2018. As Daley explains, the appeals court “ordered O’Connor to consider whether the mandate can be separated from the rest of the ACA. If O’Connor finds the mandate is essential to the operation of the law, then the entire statute may be struck down.”
Supreme Court asked to fast-track a decision
Following the ruling by the appeals court, and given the huge impact a decision by the lower court to strike down the law in its entirety could have, Kaiser Health News reports that “a group of Democratic state attorneys general have asked the Supreme Court to hear the case — in this term, which ends in June.” That would be shortly before the presidential election and would likely be a big issue for voters.
Shortly after the Democratic attorneys general made their request, hospital and insurance groups also asked the Supreme Court to intervene. As reported in Healthcare Dive, “lobbying groups for both the hospital and insurance industries filed amicus briefs” in which they urged “the Supreme Court to take on the controversial case seeking to overturn the Affordable Care Act.” According to the brief, these “groups argued the case creates enormous uncertainty for industry,” believing a quick decision would be beneficial for everyone.
The Trump administration disagreed, however. The Daily Caller News Foundation explains that the “administration told the Supreme Court there is no reason to fast-track its consideration of two petitions seeking review of a lower court decision that struck down the Affordable Care Act’s individual mandate.” This is a bit ironic given the urgency with which President Trump wanted the ACA repealed early on in his presidency.
Supreme Court decides not to hear the case
The answer from the Court came pretty quickly. As the Associated Press reports, on Tuesday, January 21, the Supreme Court refused “to consider a fast-track review of a lawsuit that threatens the Obama-era health care law, making it highly unlikely that the justices would decide the case before the 2020 election.” Instead, they will wait for the lower court ruling and could hear the decision on appeal, whatever Judge Reed O’Connor decides.
Still an issue in the election
It is important to note that, with or without a decision from the Supreme Court, this case will likely play a major role in the presidential debates. The possibility of the ACA being struck down will excite some voters and terrify others, and the discussion about a potential replacement plan will be that much more important. As always, what’s going on in our industry is a huge issue that’s important to all Americans, so it should be front and center on a lot of voters’ minds.