A federal judge has ruled that the entirety of the Affordable Care Act aka Obamacare is unconstitutional, though he did not order a remedy and an appeal is already being assembled.
Texas v. United States was filed in February in U.S. District Court for the Northern District of Texas, seeking declaratory and injunctive relief from the ACA on several grounds, including that, in its 2012 National Federation of Independent Business (NFIB) v. Sebelius decision that was widely thought to have “saved” the law, “a majority of the Supreme Court held that Congress lacks the constitutional authority to compel citizens to purchase health insurance.” (The Court ruled in NFIB that ACA’s individual mandate was legitimate only as a tax, which was under the power of Congress.)
Texas plaintiffs further argued that when President Trump signed the Tax Cuts and Jobs Act of 2017 in December of last year, which among other things reduced the mandate penalty for not buying insurance to $0, it was retaining the individual mandate “without any accompanying exercise of Congress’s taxing power, which the Supreme Court already held that Congress has no authority to enact.”
To the argument that the absence of an actual penalty invalidated that complaint, Judge O’Connor countered, “a showing of economic injury is not required” as the plaintiff’s rights, including the right not to “maintain ACA-compliant health insurance coverage,” were at issue.
Plaintiffs further argued that “not only is the individual mandate now unlawful, but this core provision is not severable from the rest of the ACA” — that is, everything in the law, including the exchanges and coverage of pre-existing conditions, was unconstitutional and had to be thrown out.
In his December 14 decision, Judge Reed O’Connor agreed: “The saving construction in NFIB was available only because [the mandate] triggered a tax,” he wrote. “And [the mandate] was a tax because it produced some revenue for the Government… Under the law as it now stands, the Individual Mandate no longer ‘triggers a tax’ beginning in 2019” — therefore “the Individual Mandate cannot be upheld under Congress’s Tax Power.”
The judge further found that the Congress that passed the ACA “expressed through plain text an unambiguous intent that the Individual Mandate not be severed from the ACA” — citing passages of the law such as “the [mandate] requirement is an essential part of this larger regulation of economic activity, and the absence of the requirement would undercut Federal regulation of the health insurance market.” Thus, he ruled, the whole of the law had to be thrown out with the mandate.
The Trump administration had tacitly endorsed the plaintiffs in legal filings and in a letter from then-Attorney General Jeff Sessions to then-Speaker of the House Paul Ryan, in which he said “[the mandate] will be unconstitutional when the Jobs Act’s amendment becomes effective in 2019.” While maintaining that most of the rest of the law was severable from the mandate and thereby salvageable, Sessions said the popular pre-existing conditions features – guaranteed issue and community rating – were not. This left much of the heavy lifting for the defense to be performed by states that joined the case as Intervener-Defendants. (The plaintiffs were also joined by other states.) After the ruling, President Trump tweeted his approval.
This was a declaratory judgment rather than an injunction, so no government action — such as shutting down exchanges or permitting insurers to refuse or increase prices on coverage based on pre-existing conditions — was called for. Some parties, including California Attorney General Xavier Becerra, have already declared their intention to fight the ruling, which is expected to go next to the 5th U.S Circuit Court of Appeals and thence to the Supreme Court.