While the Obama-era law remains in effect, here’s how the ruling may impact the future of the Affordable Care Act (ACA).
On Friday, Dec. 14, 2018, Texas Federal Judge Reed O’Connor ruled the ACA’s mandate to buy insurance unconstitutional as it “is no longer fairly readable as an exercise of Congress’s Tax Power and continues to be unsustainable under the Interstate Commerce Clause,” according to Judge O’Connor’s 55-page decision.
Judge O’Connor’s ruling is partly credited to the principles established in the 2012 NFIB v. Sebelius decision, in which NFIB was a lead plaintiff. The decision challenged the constitutionality of the individual mandate under the ACA that required individuals to obtain a minimum level of health insurance coverage or face a penalty charge. In NFIB v. Sebelius, the Supreme Court upheld the individual mandate under Congress’ taxing power.
Judge O’Connor’s ruling comes one year after the ACA’s individual mandate penalty was repealed through the Tax Cuts and Jobs Act. Using the mandate’s elimination as support for his decision, Judge O’Connor argued that the zeroed penalty makes the taxing power recognized in NFIB v. Sebelius inapplicable and leaves the ACA individual mandate without a constitutional basis.
Judge O’Connor further ruled that the unconstitutional individual mandate was an essential part of the ACA, without which the rest of the ACA would not work, so he held that the entire ACA was invalid.
In California, state Attorney General Xavier Becerra voiced the state’s intent to seek to overturn the decision. David Addington, NFIB’s Senior Vice President and General Counsel says the case is likely to end up in the U.S. Court of Appeals for the Fifth Circuit and, perhaps, thereafter in the U.S. Supreme Court. “The ultimate word from the courts on the constitutionality of the Affordable Care Act may not come for some time,” says Addington.
Despite Judge O’Connor’s decision, the ruling does not currently affect 2019 enrollment coverage, according to Healthcare.gov.
