Julie Rovner, Kaiser Health News
December 14, 2018
The future of the Affordable Care Act is threatened — again — this time by a ruling Friday from a federal district court judge in Texas.
Judge Reed C. O'Connor struck down the law, siding with a group of 18 Republican state attorneys general and two GOP governors who brought the case. O'Connor said the tax bill passed by Congress last December effectively rendered the entire health law unconstitutional.
That tax measure eliminated the penalty for not having insurance. An earlier Supreme Court decision upheld the ACA based on the view that the penalty was a tax and thus the law was valid because it relied on appropriate power allowed Congress under the Constitution. O'Connor's decision said that without that penalty, the law no longer met that constitutional test.
"In some ways, the question before the Court involves the intent of both the 2010 and 2017 Congresses," O'Connor wrote in his 55-page decision. "The former enacted the ACA. The latter sawed off the last leg it stood on."
The decision came just hours before the end of open enrollment for ACA plans in most states that use the federal healthcare.gov insurance exchange. It is not expected that the ruling will impact the coverage for those people — the final decision will likely not come until the case reaches the Supreme Court again.
Seema Verma, the administrator of the Centers for Medicare & Medicaid Services, which oversees those insurance exchanges, said in a tweet: "The recent federal court decision is still moving through the courts, and the exchanges are still open for business and we will continue with open enrollment. There is no impact to current coverage or coverage in a 2019 plan."
The 16 Democratic state attorneys general who intervened in the case to defend the health law immediately vowed to appeal.
"The ACA has already survived more than 70 unsuccessful repeal attempts and withstood scrutiny in the Supreme Court," said a statement from California Attorney General Xavier Becerra. "Today's misguided ruling will not deter us: our coalition will continue to fight in court for the health and wellbeing of all Americans."
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.
It is hard to overstate what would happen to the nation's health care system if the decision is ultimately upheld. The Affordable Care Act touched almost every aspect of health care, from Medicare and Medicaid to generic biologic drugs, the Indian Health Service, and public health changes like calorie counts on menus.
The case, Texas v. United States, was filed in February. The plaintiffs argued that because the Supreme Court upheld the ACA in 2012 as a constitutional use of its taxing power, the elimination of the tax makes the rest of the law unconstitutional.
In June, the Justice Department announced it would not fully defend the law in court. While the Trump administration said it did not agree with the plaintiffs that the tax law meant the entire ACA was unconstitutional, it said that the provisions of the law guaranteeing that people with preexisting health conditions could purchase coverage at the same price as everyone else were so inextricably linked to the tax penalty that they should be struck.
The administration urged the court to declare those provisions invalid beginning Jan. 1, 2019. That is the day the tax penalty for not having insurance disappears.
The protections for people with preexisting conditions was one of the top health issues in the midterm elections in November. While the issue mostly played to the advantage of Democrats, one of the Republican plaintiffs, Missouri Attorney General Josh Hawley, defeated Democratic incumbent Sen. Claire McCaskill. Another plaintiff, West Virginia Attorney General Patrick Morrisey, lost to Democratic incumbent Sen. Joe Manchin.
President Donald Trump was quick to take a victory lap, and pressed Senate Majority Leader Mitch McConnell (R-Ky.) and the presumed incoming House Speaker Nancy Pelosi (D-Calif.) to fix the problem. He tweeted Friday night that "As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!"
But congressional leaders were quick to point out that the suit is far from over.
"The ruling seems to be based on faulty legal reasoning and hopefully it will be overturned," said a statement from Senate Minority Leader Chuck Schumer (D-N.Y.).
Many legal experts agreed with that. "This is insanity in print, and it will not stand up on appeal," tweeted University of Michigan Law School professor Nicholas Bagley, an expert in health law.
Even some conservatives were left scratching their heads. "Congress acted last year to repeal the mandate, but leave everything else in place and the courts should have deferred to that," tweeted former congressional GOP aide Chris Jacobs.