ACA Ruled Unconstitutional by Federal Judge, But Will It Stand?

Author: David B. Weisenfeld, XpertHR Legal Editor

December 17, 2018

A federal judge in Texas has ruled that the Affordable Care Act's (ACA's) individual coverage mandate is unconstitutional and that the ACA should be struck down in its entirety nationwide.

Judge Reed O'Connor held in Texas v. United States that the ACA's individual mandate can no longer be read as a legitimate exercise of Congress's taxing power after the Tax Cuts and Jobs Act of 2017. When the US Supreme Court upheld the mandate as constitutional in its groundbreaking 2012 decision, its ruling was based on Congress's tax power.

But Judge O'Connor explained that the decision by the Republican Congress to remove the tax penalty for individuals who do not carry health insurance means the individual mandate no longer "triggers a tax," and is unconstitutional as a result.

The court added that in passing the ACA, Congress called the individual coverage mandate "essential to the ACA" and so interwoven that it could not be separated from the law. Thus, Judge O'Connor found that since the individual mandate is unconstitutional, the rest of the law is also invalid. He noted that upholding the ACA in the absence of the individual mandate would change the effect of the ACA as a whole.

Congress never intended to place a duty on employers to cover the "skyrocketing insurance premium costs" of their employees that would inevitably result from removing a "key component of the ACA," the court said.

The decision, on its face, threatens health coverage for millions as well as protections for people with pre-existing conditions. However, the ACA is far from being placed on life support just yet.

An appeal to the New Orleans-based 5th Circuit Court of Appeals is a virtual certainty, and the case is likely to make its way to the Supreme Court. All five of the justices who voted in favor of the ACA in 2012 remain on the Court, including the opinion's author, Chief Justice John Roberts.

About 20 states opposing the ACA, led by Texas, had banded together to challenge the health care law. In response, a large group of states led by California intervened to defend the ACA.

In a statement, the White House said, "We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place."