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TX Judge Rules ACA Unconstitutional in Highly Charged Court Case

In a contentious court case in Texas, a judge ruled that the ACA is unconstitutional due to an overreach of Congressional authority.

Affordable Care Act lawsuit

Source: Thinkstock

By Jennifer Bresnick

- In a highly politically court case brought by a number of Republican officials, US District Judge Reed O'Connor has issued a ruling stating that the Affordable Care Act as a whole is unconstitutional.

The ruling stems from the notion that since the individual mandate to purchase health insurance is integral to the law’s intent, determining that the mandate was an overreach of Congressional power to begin with means the rest of the law is now invalid.

The somewhat creative interpretation of a case that the federal government declined to defend due to its political ideology will not affect the implementation of the Affordable Care Act for the moment, nor will it alter the Marketplace open enrollment periods still in effect in many states.

The ruling will undoubtedly be appealed, and is likely to meander through the court system until it reaches the Supreme Court at some future date.

The Center for Medicare and Medicaid Services (CMS) issued a brief statement following the ruling, reiterating that the law will remain in full effect for now.

READ MORE: CMS Relaxes Affordable Care Act Health Plan Regulations

“The recent federal court decision is still moving through the courts and the work of the Innovation Center will continue unchanged,” the agency stated.  

“We remain committed to our current and future models as well as our focus on better health outcomes at lower cost.”

While the decision will not have any immediate effect on the day-to-day provisions of the ACA, it will certainly add to confusion and uncertainty about the future of a law that has been subject to multiple legal challenges and intense manipulation in the political sphere.

Republican lawmakers have failed several times to repeal the law through Congressional actions, leaving a coalition of GOP governors and attorneys general to try to achieve their aims through the courts.

The plaintiffs were helped by the fact that the Trump Administration’s Department of Justice failed to take on its duty of offering a defense of the law, a decision that enforced the appearance that the case was largely motivated by politics.

READ MORE: Affordable Care Act Changes May Bring a Rocky 2018 for Payers

In the ruling, Judge O’Connor begins by stating that courts are not “tasked with, nor are they suited to, policymaking.” 

He then continues by using his judicial position to attempt to change the policies upheld by Congress, arguing that lawmakers fundamentally superseded their authority by implementing the individual mandate, later repealed by the Tax Cuts and Jobs Act of 2017 (TCJA).

“If a party shows that a policymaker exceeded the authority granted it by the Constitution, the fruit of that unauthorized action cannot stand,” he says.

“Here, the Plaintiffs allege that, following passage of the TCJA, the Individual Mandate in the ACA is unconstitutional. They say it is no longer fairly readable as an exercise of Congress’s Tax Power and continues to be unsustainable under the Interstate Commerce Clause. They further urge that, if they are correct, the balance of the ACA is untenable as inseverable from the Invalid Mandate.”

In 2012, a Supreme Court ruling found that the individual mandate could be interpreted as an excessive of Congressional taxation power.  O’Connor believes that the subsequent repeal of that tax means that nothing related to the defunct tax could be legal or enforceable.

READ MORE: 20.5 Million More Insured Since Start of Affordable Care Act

In theory, the ruling could have a drastic effect on the health insurance landscape: Medicaid expansion would be deemed illegal; young people would not be able to stay on their parents’ insurance until age 26; and the mandate to offer an essential benefits package would no longer apply. 

And the protection of coverage for individuals with pre-existing conditions, which the GOP superficially embraced as a midterm election issue thanks to its overwhelming popularity among voters, would not need to be enforced.  

Whether or not these potentialities take effect will depend on additional court actions in the coming months.  No doubt the ACA will continue to face challenges for the foreseeable future, leaving healthcare payers – and tens of millions of consumers – in anxious limbo as lawsuits are argued and new bills are presented to lawmakers.

Editor's note: On November 17, HHS Secretary Alex Azar issued the following statement on the ruling:

“The recent US District Court decision regarding the Affordable Care Act is not an injunction that halts the enforcement of the law and not a final judgment. Therefore, HHS will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision. This decision does not require that HHS make any changes to any of the ACA programs it administers or its enforcement of any portion of the ACA at this time.” 

“As always, the Trump Administration stands ready to work with Congress on policy solutions that will deliver more insurance choices, better healthcare, and lower costs while continuing to protect individuals with pre-existing conditions.”

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