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Analysis

Judge Rules ACA's Individual Mandate Unconstitutional, Declaring Entire Law Invalid

By Steven Porter and John Commins  
   December 14, 2018

The highly anticipated ruling came just a day before the end of open enrollment for the 2019 benefit year.

A federal District Court judge in Texas on Friday handed Republican state attorneys general a victory in their challenge to the Affordable Care Act, ruling that the entire law was rendered invalid by Congress zeroing out the penalty tied to its individual mandate.

The highly anticipated ruling, which follows a hearing held more than three months ago, came just a day before the end of open enrollment for ACA plans on the federally facilitated exchange for the 2019 benefit year.

While opponents of the sprawling legislation are sure to cheer the ruling, its defenders immediately denounced the decision as rooted in partisan bias. Even some legal scholars who have argued against certain provisions of the ACA in past legal challenges have rejected the judge's decision.

"District court judge strikes down ACA, mangling multiple legal doctrines in the process. I doubt this opinion will survive appeal," said Jonathan H. Adler, director of the Center for Business Law & Regulation at Case Western Reserve University School of Law in Cleveland, in a tweet.

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Democratic attorneys general from 16 states who intervened in the case are expected to appeal the ruling to the Fifth Circuit Court in New Orleans, where some see an uncertain future.

"Although frankly I think the argument is ridiculous, there is some chance the Fifth Circuit would uphold it," Timothy Jost, a health law expert and professor emeritus at Washington and Lee University School of Law, told HealthLeaders prior to Friday's ruling. "The Fifth Circuit, last time I checked, had as many Trump appointees as from prior Democratic presidents."

Given the high stakes and parties involved, the ruling could easily find its way to the Supreme Court.

"I think the Supreme Court would very likely reverse, but we do have a fairly conservative court at this point," Jost said. "I am not absolutely sure if they would."

Timed to Limit 'Chaos'?
 

Even if the judge's decision is ultimately overruled on appeal, the timing could add to confusion for Americans seeking coverage under the law in an open-enrollment period that's been lagging behind last year's sign-up numbers.

"It is curious that this court decision is being issued the night before the last day of ACA open enrollment, which is expected to be the biggest day of signups," Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, said in a tweet, noting that the law is still in effect, so consumers should still sign up for coverage.

The timing could be explained by a request from the Department of Justice, which warned in early September that an immediate injunction to invalidate the law would create "chaos" in the healthcare markets. So the DOJ asked the judge to hold off until January, after both open enrollment and November's midterm elections.

The plaintiffs' case, filed in February, centered on what they claim is the inseverability of the ACA's individual mandate—which the Supreme Court upheld in 2012 as a tax—from the rest of the law. Since the mandate's tax penalty for noncompliance will drop to $0 on January 1, 2019, the mandate must be unconstitutional and the entire ACA must be invalid, too, the plaintiffs argued successfully at the District Court level.

While the DOJ continues to represent the defendants in this lawsuit, it has also sided against key provisions of the law, agreeing that the individual mandate was rendered unconstitutional but arguing that only a handful of the ACA's other provisions are inseparable from the mandate.

About Those Politics
 

Andy Slavitt, former acting administrator of the Centers for Medicare & Medicaid Services in the Obama administration, called Friday's development "a highly political ruling in concert with Trump."

President Trump, meanwhile, celebrated the decision.

"As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster!" Trump wrote in a tweet. "Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!"

The judge who issued Friday's ruling, U.S. District Judge Reed O'Connor in Fort Worth, was appointed to the court by President George W. Bush and is regarded as a conservative jurist. He and the ACA have history.

In late-2016, O'Connor ruled against the Obama administration's interpretation of an ACA provision banning sex discrimination. The government had sought to prohibit insurers, doctors, or hospitals from discriminating against transgender patients or women with an abortion in their medical history, but O'Connor blocked the government from enforcing that interpretation. (Another hearing in that case is scheduled for next Wednesday.)

Despite the president's celebratory tone, the White House said in a statement the law will remain in place until the appeals process is completed.

Federal Judge Rejects Entire ACA, Declaring Individual Mandate Unconstitutional by HLMedit on Scribd


KEY TAKEAWAYS

The entire ACA is invalid because Congress reduced to $0 the tax penalty tied to its individual mandate, a federal judge ruled.

President Trump celebrated the decision and called for lawmakers to pass a replacement.

The ACA continues to be active law, pending the appeals process, the White House said.

The legal fight is widely expected to reach the Supreme Court.

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