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Circuit Court Issues Ruling on ACA Individual Mandate

December 19, 2019

Circuit Court Issues Ruling on ACA Individual Mandate

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Ivy Baer, Senior Director and Regulatory Counsel

The U.S. Court of Appeals for the Fifth Circuit Dec. 18 issued a 2-1 ruling in Texas v. United States that affirmed that once Congress reduced the Affordable Care Act (ACA P.L. 111-148 and P.L. 111-152) penalty for failure to obtain insurance to zero dollars, the individual mandate became unconstitutional.

The Court did not answer the question of whether this made the entire ACA unconstitutional or whether the provision was “severable” from the rest of the ACA, therefore leaving the remainder of the law to stand. Instead, the Court sent the case back to the District Court for more analysis about the issue of severability.

The decision follows a Dec. 14, 2018, ruling from the U.S. District Court for the Northern District of Texas that found that the individual mandate provision of the ACA was unconstitutional since the penalty for failing to maintain minimum coverage was reduced by Congress to zero on Jan. 1, 2018. The Court further ruled that the individual mandate could not be severed from the remaining provisions of the ACA, thereby invalidating the entire law [see Washington Highlights, Dec. 21, 2018].

The AAMC, along with the American Hospital Association, the Federation of American Hospitals, The Catholic Hospital Association, and America’s Essential Hospitals, submitted an amicus brief in support of the constitutionality of the ACA on June 14, 2018 [see Washington Highlights, April 5].

The AAMC previously submitted an amicus brief expressing concern about a number of provisions of the ACA that would be considered null and void if the plaintiffs were successful, including protections for patients with preexisting conditions [see Washington Highlights, June 15, 2018]. Since initial challenges to the ACA started in 2011, the AAMC has submitted briefs in support of the ACA.

Democratic attorneys general intervened in the case and have indicated that they will appeal the decision to the Supreme Court. It is not known if, or when, the Supreme Court will hear the appeal.

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