Submitted on Mon, 12/17/2018 - 00:00

As I am sure you have heard on the news, on Friday 12/14, a federal judge in a lower court in TX filed a decision that declared the Affordable Care Act to be unconstitutional. His decision hinged on the fact that last December's tax bill the fine for not obtaining health insurance was reduced to zero. The decision held that since that fine has bee reduced to zero, that "tax" has been functionally removed from the law.

The reason this argument matters is that when the Supreme Court evaluated the constitutionality of the ACA previously, it determined that in fact the government did have the authority to compel Americans to have health insurance coverage, citing the Constitution granting Congress the authority to tax and spend. In yesterday's decision, the judge determined that since the "tax" has been reduced to zero, that authority has been relinquished and therefore the whole law must be struck (because of the argument that the taxing authority granted to Congress was the sole reason that it was able to compel Americans to have health insurance--and that the existence of the entire law hinged upon the taxing authority).

The ruling will not impact the 2019 health insurance plans sold through the exchange/marketplace of healthcare.gov or the state equivalents. It also won't immediately affect Americans' health coverage. The most immediate impact could be upon whether or not states will continue to consider expanding Medicaid at a time when the effort might be for naught.

An appeal is inevitable and already being discussed by a group of states led by California. They are likely to argue that the amount of the fine is immaterial, and that the $0 amount is not the equivalent of repealing the tax/fine and that the law still contains (and has the authority to impose) a fine. Because of the high stakes, and the political aspect of the law, the appeal process is likely to make its way to the US Supreme Court. This will take time.

If the US Supreme Court upholds the argument that the entire Congressional authority hinges on whether or not there is a tax/fine of more than $0 imposed upon those who do not have health insurance coverage, then the entire law will be invalidated. If that is the case, Americans will lose pre-existing condition protections, the ability of folks to stay on their parents' health insurance up to age 26 and other provisions of the ACA that have recently become popular on both sides of the aisle and the preservation of which has been a PPS legislative priority.

In a closely watched case, Judge Reed O’Connor of the Federal District Court in Fort Worth, Texas ruled that the Affordable Care Act's individual mandate, which Republicans zeroed out with their tax bill, “can no longer be sustained as an exercise of Congress’s tax power.” And the rest of the law cannot be separated from that provision and is therefore invalid, he wrote.

The New York Times: Texas Judge Strikes Down Obama’s Affordable Care Act As Unconstitutional
A federal judge in Texas struck down the entire Affordable Care Act on Friday on the grounds that its mandate requiring people to buy health insurance is unconstitutional and the rest of the law cannot stand without it. The ruling was over a lawsuit filed this year by a group of Republican governors and state attorneys general. A group of intervening states led by Democrats promised to appeal the decision, which will most likely not have any immediate effect. (Goodnough and Pear, 12/14)

The Associated Press: Federal Judge Rules Health Care Overhaul Unconstitutional
In a 55-page opinion, U.S. District Judge Reed O’Connor ruled that last year’s tax cut bill knocked the constitutional foundation from under “Obamacare” by eliminating a penalty for not having coverage. The rest of the law cannot be separated from that provision and is therefore invalid, he wrote. Supporters of the law immediately said they would appeal. “Today’s misguided ruling will not deter us: our coalition will continue to fight in court for the health and wellbeing of all Americans,” said California Attorney General Xavier Becerra, who is leading a coalition of states defending the ACA. (Alonso-Zaldivar, 12/14)

Politico: Judge Rules Obamacare Unconstitutional, Endangering Coverage For 20 Million
“In some ways, the question before the Court involves the intent of both the 2010 and 2017 Congresses,” O’Connor wrote. “The former enacted the ACA. The latter sawed off the last leg it stood on.” (Demko and Cancryn, 12/14)

Texas Tribune: Federal Judge Rules Obamacare Unconstitutional, Handing Texas An Early Win
In a ruling that could throw the nation’s health care system into chaos, Fort Worth-based U.S. District Judge Reed O’Connor on Friday ruled that a major provision of the Affordable Care Act is unconstitutional — and that the rest of the landmark law must fall as well. In February, a Texas-led coalition of 20 states sued the federal government to end the health care law in its entirety, arguing that after Congress in December 2017 gutted one of its major provisions, the rest of the law was unconstitutional. (Platoff, 12/14)

Kaiser Health News: Judge Strikes Down ACA Putting Law In Legal Peril — Again
It is all but certain the case will become the third time the Supreme Court decides a constitutional question related to the ACA. In addition to upholding the law in 2012, the court rejected another challenge to the law in 2015. (Rovner, 12/14)