Appeals Court Invalidates ACA Mandate But Doesn’t Pull Plug On Obamacare Yet

on November 1, 2017 in Miami, Florida.
A computer screen shows the enrollment page for the Affordable Care Act on November 1, 2017 in Miami, Florida. (Photo by Joe Raedle/Getty Images)
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December 18, 2019 5:10 p.m.

In a highly anticipated case, the U.S. Fifth Circuit of Appeals ruled on Tuesday that the Affordable Care Act’s individual mandate is unconstitutional. But it stopped short of killing off all of Obamacare, kicking the case back down to the district court for further proceedings.

The prospect of the ACA being killed outright has been drowned out by the Trump impeachment drama. But the political and social implications of losing a major component of U.S. health care policy less than a year before the next presidential election are dramatic.

While the appeals court stopped short of declaring the ACA completely defunct as a matter of law, the remand sends it to back to a district judge who has been deeply hostile to the law.

It is not clear yet whether the next round of district court proceedings will be complete before the election.

The decision was 2-1, with Judges Jennifer Walker Elrod and Kurt D. Engelhardt in the majority. Judge Carolyn Dineen King dissented.

The three-judge appeals panel tackled the threshold legal questions of whether the plaintiffs had suffered an actual injury and had standing to sue. But of greater substantive interest was whether the ACA’s individual mandate was constitutional and, most consequentially of all, whether the ACA would collapse if the mandate were struck down.

The court found that the mandate was unconstitutional because as a result of the 2017 GOP-led repeal of the mandate’s federal tax penalty, the mandate “can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.”

The majority argued that because the mandate’s tax penalty had been nullified and no longer produces revenue, “the mandate is a command” and therefore unconstitutional.

In an earlier Supreme Court case, Chief Justice John Roberts upheld the mandate as a tax in a major win for the Obama administration. The GOP repeal of the tax penalty and the looming decision in this case created an ironic predicament for Republicans: the ACA could go away-and millions of people lose insurance coverage in the run-up to the 2020 election.

The appeals court chose not to decide whether the rest of the ACA would die as a result of their ruling on the mandate, choosing instead to pass the suit back to U.S. District Court for the Northern District of Texas.

The reason for that decision, the court majority explained, is that “it is no small thing for unelected, life-tenured judges to declare duly enacted legislation passed by the elected representatives of the American people unconstitutional.”

The far-reaching legal challenge to Obamacare was launched by more than a dozen Republican-controlled states and two individual plaintiffs from Texas. Several Democratic-controlled states later joined the case as defendants because the Trump administration was not aggressively defending the federal law.

Read the ruling below:

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