Texas v. Azar Will Tackle 3 Subjects on Affordable Care Act

July 08, 2019 - On July 9, the Fifth Circuit Court of Appeals will hold hearings on the constitutionality of the individual mandate in Texas v. Azar, the Kaiser Family Foundation (KFF) reports.

The hearing on Tuesday is expected to cover three subjects: the parties’ standing to invoke the court’s jurisdiction, the constitutionality of the Affordable Care Act’s individual mandate, and — if the mandate proves unconstitutional — the validity of the Affordable Care Act as a whole.

Standing

The plaintiffs are 18 states — led by Texas — plus two individuals and the federal government. The plaintiffs argue that the entire Affordable Care Act is unconstitutional. They are opposed by 21 states, the state intervenor-defendants, which support the law’s constitutionality.

Both of the Texas residents who joined the suit have already been approved as having standing. They claim that the individual mandate compels them to acquire insurance and resulted in higher Medicaid and CHIP costs and administrative burden. The state intervenor-defendants point to the 2017 Tax Cuts and Jobs Act (TCJA) as reason to deny standing. Under TCJA, the penalty for not obtaining health insurance was reduced to $0, so the Texan residents will not experience any negative effects from rejecting coverage.

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Meanwhile, the 5th Circuit has called into question the standing of the state intervener-defendants, asking for supplemental briefs on the subject that will serve as the first topic of discussion on Tuesday. If the state intervener-defendants are seen to have no standing, the Texas v. US appeal may be declared moot, potentially leaving the Affordable Care Act untouched.

Individual Mandate’s Constitutionality

“The ACA’s individual mandate is unconstitutional,” the plaintiffs stated “That conclusion follows ineluctably from NFIB v. Sebelius, where a majority of the Supreme Court concluded that the Commerce Clause and the Necessary and Proper Clause do not permit Congress to mandate the purchase of health insurance.”

In NFIB v. Sebelius, the mandate’s constitutionality was upheld because the Supreme Court considered Congress to be exercising its right to tax, the plaintiffs acknowledged. However, the TCJA reduced the penalty to $0 for anyone who refused to comply. At $0, the mandate no longer contributes to the government’s revenue and is not a tax.

“Stripped of its tax status, the individual mandate is nothing more than an unconstitutional congressional mandate to purchase health insurance,” the plaintiffs concluded.

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In reply, the state intervenors-defendants argued that the Supreme Court did not declare the mandate constitutional merely as a tax, but rather that the mandate remains constitutional in the same way that “sense of the Congress” resolutions are constitutional — as “equivalent to “non-binding, legislative dicta.’”

The state intervenors-defendants have reiterated that courts are intended to try to preserve statutes as far as possible.

Further, the state intervenors-defendants say that the penalty, currently set to $0, could be raised in the future and they cite cases in which taxes produced no revenue for the federal government yet were not ruled unconstitutional.

“The amended Section 5000A can reasonably be construed as encouraging (but not requiring) the purchase of health insurance, or as an exercise of the taxing power where Congress has temporarily decided to suspend collection,” the state intervenor-defendants concluded. “Section 5000A need not — and therefore must not — be interpreted ‘as a standalone command that [is] unconstitutional under the Interstate Commerce Clause.’”

Affordable Care Act’s Constitutionality

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To support the idea that the mandate’s fall requires the Affordable Care Act’s collapse, the plaintiffs cite three Congressional statements about the minimum essential insurance coverage requirement that each lead with “the requirement is essential.”

“Congress thus stated in the statutory text that the ACA’s provisions are ‘closely intertwined,’ such that ‘the guaranteed issue and community rating requirements would not work without the coverage requirement [i.e., the individual mandate],’” the document stated.

If the requirement is essential to the Affordable Care Act but the requirement is unconstitutional, they argue, then the entirety of the law should be discounted.

The state intervenors-defendants elaborate that “when a court concludes that a statute is unconstitutional, it generally tries ‘to limit the solution to the problem. “When a court holds one part of a statute unconstitutional,” they continued, “it will generally ‘sever its problematic portions while leaving the remainder intact.’”

If Congress had wanted to rule the Affordable Care Act entirely unconstitutional, they would not have let the rest remain untouched. The district court’s analysis of the circumstances was “flawed” and should be reversed, the state intervenors-defendants concluded.

The Affordable Care Act’s many provisions has significantly impacted the individual insurance market, private insurance, Medicare, Medicaid, prescription drug coverage, and more.

“All of these provisions could be overturned if the trial court’s decision is upheld, and it would be enormously complex to disentangle them from the overall health care system,” KFF states.

After almost a decade of integration into nearly every facet of modern American healthcare, the Affordable Care Act has had seen mixed results.

In 2018, The Commonwealth Fund conducted a study to evaluate the effects of the Affordable Care Act over the course of its first eight years.

The results demonstrated that fewer adults ages 19 to 64 were uninsured and the duration of coverage gaps had shortened since the ACA was enacted. The adult uninsured rate had remained at 12.4 percent since the organization’s 2016 survey.

The ACA also improved access to care and also found that continuously insured adults were more likely to get preventive care and screenings — even if the individual was underinsured.

Despite these advances, the Affordable Care Act left 45 percent of US adults 19-64 inadequately insured — nearly the same percentage as in 2010.

Additionally, more people who had coverage were underinsured in 2018 as opposed to 2010, particularly those with employer plans. The study showed that 44 million were underinsured because of high out-of-pocket costs and deductibles, a significant increase from 29 million in 2010.

While the percentage of long-term uninsured individuals dropped around 20 percentage points, the number of those who had been uninsured six months or less climbed to 20 percent, nearly double the 2010 survey results.

The oral arguments are scheduled to begin at 1PM CT on Tuesday.