In late December, the U.S. Court of Appeals for the 5th Circuit struck down the individual mandate of the Affordable Care Act but ducked the central question – is the rest of the ACA valid after Congress zeroed out the tax penalty for not having health insurance?
The case was sent back to the lower court to reconsider how much of it survives; the lower court judge previously ruled the entire law unconstitutional. This move reduces the likelihood of the Supreme Court considering the case before the 2020 election, but the Democratic-led states defending the law might appeal directly to SCOTUS.
The case was brought by 18 Republican-led states and the ACA has been defended mainly by a coalition of Democratic attorneys general, as the Administration refuses to defend the law.
What the plaintiffs say: The ACA became unconstitutional when Congress adopted a tax bill in 2017 that eliminated the penalty for people who don’t have health insurance. This is based on the the Supreme Court’s reasoning that the ACA was constitutional under Congress’s taxing powers.
What the defendants say: In changing tax law, Congress lowered the ACA’s tax penalty to zero but did not eliminate it. Even if the penalty is invalidated, Congress did not hint in the tax law that it wanted to disrupt the rest of the ACA.
The immediate impact of the ruling: nothing. Congress has already removed the penalty.
But if the appellate ruling is upheld once it gets to the Supreme Court, other significant elements of the law are at risk — preexisting conditions protection, marketplace insurance subsidies, Medicaid expansion in 36 states, the ability to remain on parents’ insurance until age 26, and no-charge preventive care. The law is also impacts payment formulas for hospitals and doctors to move towards a value-based system.
The Supreme Court has upheld the ACA twice since it passed in 2010. But if it agrees with the appeals court ruling, it could upend our entire health care system.