But the court
raised the possibility that much of the ACA could survive the death of the
individual mandate provision.
By Jacqueline Thomsen | December 18, 2019 at 05:14 PM | The original version
of this story was published on ThinkAdvisor
A three-judge panel
at the 5th U.S. Circuit Court of Appeals Wednesday that the Affordable Care
Act’s individual mandate is unconstitutional, but the panel left open the
possibility that much, or even most, of the Obama-era law could survive the
death of the mandate provision.
The court sent the
case, Texas v. United States, back down to the district court, so that the
district court look again at whether the individual mandate provision can be
removed from the rest of the ACA.
The panel also
found that:
·
The individual mandate provision is now an ordinary law, not a
tax, because the mandate violation penalty has been zeroed out.
·
A group of states that opposes the individual mandate has
standing to challenge the provision.
·
A group of states that supports the provision has standing to
defend it.
The history
The ACA individual
mandate provision, or “individual shared responsibility” provision, initially
required many people to own what the government classifies as solid major
medical coverage or else pay a penalty. Congress passed a tax bill in 2017 that
included a provision setting the penalty at zero.
ACA critics
challenged the mandate through a case that reached the Supreme Court in 2012.
In a ruling on that
case, the Supreme Court held that a federal law that blocks challenges to new
taxes protected the individual mandate provision, because the penalty was a
tax.
Critics of the
provision say that, now the new tax law has set the individual mandate penalty
at zero, the individual mandate is no longer a tax and can no longer benefit
from the legal protection accorded to federal taxes.
In 2012, ACA
supporters argued that keeping the individual mandate penalty in place was
vital to helping the rest of the ACA expand access to health coverage and
lower the cost, by pushing many relatively young, healthy people to pay for
coverage.
Most ACA
health coverage programs came to life in 2014. Now that the programs have
been in place for more than five years, some insurers and others have suggested
that the ACA system seems to be strong enough to continue to operate, at least
temporarily, without the use of an official individual mandate.
The players
Texas Attorney
General Ken Paxton is leading a coalition of states that has challenged the ACA
individual mandate.
California Attorney
General Xavier Becerra is leading a coalition of states that’s defending the
law.
Democrats now
control the U.S. House of Representatives, and the House has been arguing in
support of the individual mandate and the rest of the ACA.
The Justice
Department originally asked the courts to declare the ACA individual mandate
unconstitutional but to leave most of the rest of the law intact. The
department later moved to drop efforts to defend the ACA.
U.S. District Judge
Reed O’Connor of the Northern District of Texas ruled in December 2018 that the
2017 tax law, which eliminated the penalty for individual mandate
violations, rendered the entire health care law unconstitutional.
The 5th Circuit ruling
The 5th Circuit
panel has sided with the individual mandate provision’s critics on the
current nature of the mandate.
“The individual
mandate is unconstitutional because it can no longer be read as a tax, and
there is no other constitutional provision that justifies this exercise of
congressional power,” according to an opinion by Judge Jennifer Walker Elrod.
Elrod writes that
the 5th Circuit decision “breaks no new ground,” as the mandate was “originally
cognizable as either a command or a tax. Today, it is only cognizable as a command.”
Judge Carolyn
Dineen King writes that she agrees with the bulk of the majority’s ruling but
dissents on “remanding on severability,” or the move to ask the court whether
the individual mandate provision can be split from the rest of the ACA.
Many ACA critics
argue that the ACA contains no severability provision, and that, if one
provision is found to be unconstitutional, the rest of the law must of the law.
The ACA includes some provisions with a direct effect on ordinary major medical
insurance, but others — such as funding for efforts to fight flu pandemics, and
a provision that’s phasing out the Medicare Part D drug program “donut” hole,
or gap in coverage between when ordinary benefits end and catastrophic benefits
begin — that have nothing to do with ordinary commercial health coverage.
King says the
severability of the ACA individual mandate provision is an issue the panel
could review de novo.
“Regardless of
whether the ACA is good or bad policy, it is undoubtedly significant policy,”
King wrote. “It is unlikely that Congress would want a statute on which
millions of people rely for their health care and livelihoods to disappear
overnight with the wave of a judicial wand.”
The three-judge
panel seemed wary of the law during oral arguments back in July. The only judge
appointed by a Democratic president, King, did not ask any questions during
arguments.
The two
Republican-appointed judges, Elrod and Kurt Engelhardt, peppered attorneys from
all parties with questions, including whether the individual mandate could be
severed from the rest of the ACA.
Some legal experts
suggested that the panel could rule to strike down the individual mandate,
while ruling in favor of keeping the rest of the law in place.
Shortly before oral
arguments were held, the panel raised the question of whether the states and
the House had standing in the case. That debate over standing took a
significant amount of time during the oral arguments.
The future
The 5th Circuit’s
decision likely sets the groundwork for former U.S. Solicitor General Don
Verrilli, who was hired by the House for the current litigation, to return to
the Supreme Court. Verrilli successfully defended the ACA when a challenge to
the law came up at the Supreme Court in 2012.
Some thought the
case would come up at the Supreme Court at the height of the 2020 election
campaign season. The new ruling sending the case back to the district court
could slow the progress of the case.
The Washington Post
reported in October that federal officials are planning
to try to moderate the effects of any ruling with major effects on the ACA by
asking for a stay.
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