The federal judge in Fort Worth who recently entered final judgment finding the Affordable Care Act unconstitutional now paves the way for the case to move to the Fifth Circuit Court of Appeals. And as the attorney who argued the case on behalf of the individual plaintiffs, I am confident that the Fifth Circuit will affirm U.S. District Judge Reed O’Connor’s ruling.
In 2017, Congress eliminated the sole basis that initially saved the ACA when it amended the “shared responsibility payment” (the individual mandate penalty). And the Supreme Court already recognizes that the remaining individual mandate is unconstitutional, cannot be severed from the ACA as a unified whole, and the law in its entirety must be struck down.
The basis for last month’s decision was established by the U.S. Supreme Court itself, in NFIB v. Sebelius. In NFIB, Chief Justice John Roberts rejected the government’s claim that the Commerce Clause of the U.S. Constitution made the Affordable Care Act legitimate; instead, while recognizing the individual mandate unconstitutional, Roberts found a way to save the ACA by construing the separate shared responsibility payment requirement as constitutional under Congress’s power to tax.
His reasoning was that the shared responsibility payment, borne by those who failed to buy qualifying insurance, was a source of revenue to the federal government, and therefore a tax. On this one point, and this one point alone, the ACA was saved.
But in 2017, the Tax Cuts and Jobs Act set that shared responsibility payment at zero — meaning that it no longer generates revenue and can no longer be considered an exercise of taxing power. And without that tax, by Roberts’ own logic, the ACA cannot be saved from its unconstitutional remainder.
That’s what we at the Texas Public Policy Foundation, along with the attorneys general of 20 states, argued before Judge O’Connor, and he agreed. He further ruled that the individual mandate is an integral part of the ACA, and can’t be separated out.
“The Supreme Court’s only reasoning on the topic thus supports what the text says: The Individual Mandate is essential to the ACA,” he wrote.
His reasoning is very straightforward. Yet his ruling is now being decried by Democrats — and even some Republicans — as an unjustifiable political attack on President Obama’s signature achievement.
And they warn that millions will be impacted.
“The District Court’s ruling poses a dangerous threat to the healthcare of millions of Americans,” California Attorney General Xavier Becerra said.
The truth is that the law remains in effect during the appeals process, and that process will take two years or more, in all likelihood. And nothing is final until all appeals have been exhausted. That’s how our legal system works.
As for the “millions of Americans” Becerra cites, let’s all remember that millions of Americans — like my clients — have already been harmed by the ACA. They have lost their chosen physicians and they have lost their affordable health insurance. Facing huge deductibles and bank-breaking premiums, what they have now is far more expensive and far more limiting than the plans they had before.
My clients, like millions of other Americans, are no longer the primary decision-makers about their health care and their health insurance. Instead, they have to — by law — purchase what the ACA exchange sells them, on its own terms.
My clients aren’t alone. More than 2 million people have dropped their ACA plans since 2016 because they can’t afford the huge increases in premiums. Millions more put off seeing their doctor because they can’t afford the huge deductibles.
Also, the vast majority of people who have gained health insurance through the ACA are new Medicaid enrollees. States that expanded their Medicaid rolls as part of the ACA are still free to do so, even if the ACA goes away.
The truth is that the ACA is broken, and has been from the start. This ruling should be seen by all — Congress and citizens alike — as an opportunity to craft something better. And states should seize that opportunity, just as Gov. Greg Abbott says Texas should do.
California might want its own version of the ACA, or even something more centralized. Fine. It should be free to do so.
But in Texas, we might want something different — something that brings doctors and patients closer together, instead of separated by more and more bureaucracy.
Judge O’Connor’s ruling precisely and faithfully adheres to the law of the case and text of the ACA statute. And we are convinced that the Fifth Circuit Court of Appeals and eventually the U.S. Supreme Court will see it that way, as well.
But in the interim, it is time for states to rise to the occasion and lead towards market based health care solutions that allow for less cost, choice of doctor, and better outcomes — all while guaranteeing a safety net for those with pre-existing conditions.
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