Appeals court strikes down individual mandate, but not entire ACA

The Fifth Circuit Court of Appeals has ruled that the individual mandate of the Affordable Care Act is unconstitutional, but has not invalidated the entire law.

In a 2-1 decision, the court ordered the Texas District Court, where the case originated, to reconsider its ruling invalidating the healthcare law.

The remaining provisions of the ACA, and the law, continue to remain in effect.

California Attorney General Xavier Becerra said, "California will move swiftly to challenge this decision."

WHY THIS MATTERS

Coverage remains in effect for the millions of Americans who purchased plans through the ACA for 2020.

Insurers can continue to remain in the market.

But America's Health Insurance Plans said it would rather the appeals court had struck down the entire law, rather than send it back to the district court which already made the decision that the law is unconstitutional.

"We had hoped the appeals court would have ruled outright that the entire ACA is valid, rather than returning the case back to the district court," said AHIP President and CEO Matt Eyles. "The district court's original decision to invalidate the entire ACA was misguided and wrong – and if the district court reaches the same conclusion as before, it will be misguided and wrong again." 

THE LARGER TREND

In December, a federal court in Texas found the entire ACA must be invalidated on the basis that it is inseverable from the individual mandate.

Congress got rid of the individual mandate in 2017, ending the tax penalty for those who decide not to buy health insurance.

The Supreme Court previously ruled that the ACA is constitutional because the government has the authority to tax individuals. Without that penalty, the entire law is moot, was the argument presented by Texas and 19 other Repubican-led states before the Fifth Circuit Court of Appeals in New Orleans.

California and other Democratic-led states and the House of Representatives  defended the law, arguing that Congress never intended to strike down the ACA in its entirety when it eliminated the tax penalty for individuals who did not get insurance.

Without the ACA, millions of individuals would lose coverage and all health insurance markets, not just the marketplace, would be impacted, according to America's Health Insurance Plans, in a brief filed with the appeals court.

Providers would certainly see more uncompensated care. Since being enacted, the number of people without health insurance has decreased by over 20 million, AHIP said.

The ACA has restructured the individual and group markets for purchasing private health insurance, expanded Medicaid and reformed Medicare, including the resurrection of Medicare Part D's prescription drug donut hole, AHIP said. Health insurers have invested immense resources into adjusting their business models, developing new lines of business, and building products to implement and comply with these reforms.

Striking down the ACA would end the guarantee of coverage for those with preexisting conditions, the assurance that individuals could stay on their parent's plans until age 26, the prohibition on annual lifetime benefit limits and the provision of preventative care at no out-of-pocket cost. It would abolish the premium tax credits and cut funding for expanded Medicaid programs in the 37 states that have adopted Medicaid expansion, AHIP said.

ON THE RECORD

California Attorney General Xavier Becerra said, "This decision could take us to a dangerous and irresponsible place, not just for the 133 million Americans with pre-existing conditions, but for our seniors who use Medicare, our children under the age of 26, and the 20 million additional Americans covered directly through the ACA marketplace. California will move swiftly to challenge this decision, because this could mean the difference between life and death for so many Americans and their families."

Ways and Means Committee Chairman Richard E. Neal, D-MA, said, "Democrats will continue to fight to protect Americans' access to quality, affordable care."

AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond said, "While today's ruling is disappointing, the important takeaway is that the 5th Circuit's action today doesn't immediately harm anyone's health care coverage. The court's decision does however leave Americans' future health benefits in limbo by not resolving this challenge."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com