Texas Judge Rules ACA Unconstitutional
The judge says the Affordable Care Act individual mandate is unconstitutional and can't be separated from the rest of Obamacare.
By Allison Bell | December 17, 2018 at 10:07 AM
A lower court judge in Texas has issued a ruling that could lead to all of the Patient Protection and Affordable Care Act of 2010 (PPACA) — the main part of the Affordable Care Act (ACA) statutory package —being tossed out.
U.S. District Judge Reed O’Connor said last Friday that the PPACA provision requiring many individuals to own health coverage is now an unconstitutional requirement for people to buy health coverage, not a tax that complies with the U.S. Constitution.
Because PPACA contains no “severability clause,” or provision that lets the rest of PPACA survive if one part of PPACA is nullified, all of PPACA is invalid, O’Connor writes in an opinion explaining his ruling on the case, Texas et al. v. USA (Case Number 4:18-cv-00167-O).
“All told, Congress stated three separate times that the individual mandate is essential to the ACA,” O’Connor writes. “That is once, twice, three times and plainly. It also stated the absence of the individual mandate would ‘undercut its “regulation of the health insurance market.”
The ACA package is made up of PPACA and a second law, the Health Care and Education Reconciliation Act of 2010 (HCERA). O’Connor does not mention HCERA in his opinion.
O’Connor refers to the “900-plus pages” of the ACA legislative text, but, in his opinion, he appears to write only about the ACA provisions relating directly to health insurance, not, for example, about the sections that relate to funding for efforts to fight flu pandemics and subsidize training for health care providers who work with older patients. He refers to the non-major medical insurance provisions, collectively, as “hundreds of minor provisions.”
O’Connor was appointed to be a judge by President George W. Bush.
The U.S. Supreme Court ruled earlier that the ACA individual mandate was integral to the ACA, and that it was constitutional, because it was a tax that was protected by the federal Anti-Injunction Act.
Congress included a provision in the Tax Cuts and Jobs Act of 2017 that set the individual mandate penalty at $0. Texas and other states sued, arguing that the elimination of the penalty had converted the individual mandate provision into a bare requirement to buy coverage. Texas and the other plaintiffs asked the court to throw out all of the ACA.
The administration of President Donald Trump has asked the court to throw out only the ACA provisions that the administration Sees as being closely related to the purpose of the individual mandate, such as the ACA ban on the use of personal health information other than age in insurer decisions about whether to sell coverage, and the ACA ban on use of personal health information other than age, location, tobacco use and wellness program participation in health coverage pricing decisions.
O’Connor issued the ruling at a time when health insurers have already locked in benefits and prices for 2019 health coverage and are almost done with ordinary applicant enrollment for 2019 coverage.
The ACA individual major medical open enrollment period started Nov. 1 in most of the country and is set to end tomorrow in most of the country.
Will this really take effect now?
Bloomberg is reporting that White House officials told it they expect the effects of the ruling to be put on hold while the ruling is appealed.
Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, emphasized in a tweet that the decision is still moving through the courts.
“The exchanges are still open for business and we will continue with open enrollment,” Verma said in the tweet. “There is no impact to current coverage or coverage in a 2019 plan.”
Congress might be able to reverse the broad effects of the ruling by setting the individual mandate penalty at $10, or some other value other zero, or by adding a severability clause to PPACA.
Matt Eyles, president of America’s Health Insurance Plans (AHIP), said in a statement that he believes the district court ruling is misguided and wrong.
“This decision denies coverage to more than 100 million Americans, including seniors, veterans, children, people with disabilities, hardworking Americans with low incomes, young adults on their parents’ plans until age 26, and millions of Americans with pre-existing conditions,” Eyles said in the statement.
Eyles said he expects the new ruling to be just the first step in a lengthy legal process.
“AHIP will continue to engage as this decision is appealed,” Eyles said. “Putting aside this decision, health insurance providers will continue to work hard to ensure the people they serve have confidence that their coverage remains a strong and stable resource to improve their well-being and security.”
Josh Blackman, a law professor, has posted a public copy of the opinion here.
— With information from Tom Korosec and Kartikay Mehrotra of Bloomberg.