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SCOTUS Upholds ACA in California v. Texas Case

Analysis  |  By Jack O'Brien  
   June 17, 2021

In a 7-2 decision, the Court ruled that the plaintiffs do not have standing to sue over the landmark healthcare law's individual mandate.

The U.S. Supreme Court dismissed another challenge to the Affordable Care Act (ACA) in its Thursday morning ruling in the case of California v. Texas.

In a 7-2 decision, the Court ruled that the plaintiffs do not have standing to sue over the landmark healthcare law's individual mandate.

The Court's majority opinion was delivered by Justice Stephen Breyer; the two dissenting justices were Samuel Alito and Neil Gorsuch.

This marks the ACA's third time surviving a major Supreme Court challenge, following a 5-4 ruling in National Federation of Independent Business v. Sebelius in 2012 and a 6-3 ruling in King v. Burwell in 2015.

Related: Healthcare Stakeholders React to SCOTUS Upholding ACA for Third Time

The Court ruled that states challenging the ACA have not suffered an "injury fairly traceable to the defendant’s allegedly unlawful conduct."

"For these reasons, we conclude that the plaintiffs in this suit failed to show a concrete, particularized injury fairly traceable to the defendants’ conduct in enforcing the specific statutory provision they attack as unconstitutional," Breyer wrote in his opinion. "They have failed to show that they have standing to attack as unconstitutional the Act’s minimum essential coverage provision. Therefore, we reverse the Fifth Circuit’s judgment in respect to standing, vacate the judgment, and remand the case with instructions to dismiss."

The Court did not rule on the validity of the individual mandate or the issue of severability.

Timeline of California v. Texas

Thursday's ruling brings an end to a legal saga that began nearly four years ago when the individual mandate was zeroed out as part of the Tax Cuts and Jobs Act of 2017 (TCJA).

In December 2018, U.S. District Judge Reed O'Connor in Fort Worth ruled that the entire ACA was unconstitutional because the individual mandate is invalid, citing the elimination of its financial penalty as part of the TCJA.

In March 2019, the Department of Justice dropped its partial defense of the ACA . This change in legal approach was criticized by several hospital groups, including the American Hospital Association, which called it "unprecedented and unsupported by the laws or the facts."

The Fifth Circuit Court of Appeals heard arguments in July 2019 and ruled in a split decision in December 2019 that the individual mandate is unconstitutional but did not strike down the law.

Following that ruling, then-California Attorney General Xavier Becerra, who led a coalition of nearly 20 states in defense of the law, filed a petition of certiorari with the Supreme Court to hear the case on an expedited basis.

In March 2020, the Court agreed to hear the case.

The DOJ argued in official court filings in June 2020 that the ACA must be struck down in its entirety.

In November 2020, days after the presidential election, the Supreme Court heard oral arguments in the case.

This is a developing story that will be updated as more information becomes available.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

Photo credit: WASHINGTON DC - CIRCA MARCH 2015: The interior of the United States Supreme Court has nine chairs for nine justices. The court is located in Washington DC. / Editorial credit: stock_photo_world / Shutterstock.com


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