Uncertainty Continues Following 5th Circuit Ruling on ACA

The long-awaited ruling by the U.S. Court of Appeals for the 5th Circuit regarding the Affordable Care Act (ACA) individual coverage mandate came down in December 2019. Unfortunately, the decision by the three-judge panel that the individual mandate is unconstitutional did not end the drama concerning the federal health reform law.

In his earlier ruling in December 2018, Texas district court judge Reed O’Connor said that because Congress removed the ACA tax penalty (reducing it to zero effective in 2019), the ACA’s individual mandate requiring people to have health insurance “can no longer be sustained as an exercise of Congress’s tax power.” That ruling was subsequently appealed to the U.S. Court of Appeals in New Orleans, which oversees appeals for district courts in Texas, Louisiana, and Mississippi.

In its December 2019 ruling, instead of determining what the elimination of the individual mandate would mean for the rest of the ACA, the split panel of the 5th Circuit instructed the lower court in Texas to rehear the matter. The jurists asked the lower court “to employ a fine-toothed comb on remand and conduct a more searching inquiry into which provisions of the ACA Congress intended to be inseverable from the individual mandate.”

The 5th Circuit made no decision on some of the ACA’s most popular provisions, including coverage for pre-existing health conditions, the expansion of Medicaid, and allowing parents to maintain coverage children up to age 26. Currently health insurance companies cannot refuse to cover someone – or charge a higher premium – for someone who had a health condition before the date that proposed health coverage would take effect.

In early January 2020, Democratic attorneys general from 20 states, including California Attorney General Xavier Becerra, filed a petition with the U.S. Supreme Court asking for a fast-track review the 5th Circuit ruling. Democrats in the U.S. House of Representatives and the District of Columbia, joined the attorneys general. The unified group hopes to get a Supreme Court hearing and decision by summer, before the November 2020 elections. While it would be unusual for the court to agree to this timetable, it is not without precedent.

Those supporting the ACA argue that it is too important of an issue to be decided in a lower court, which is sure to be appealed. According to the states’ filing, “The lower court’s actions have created uncertainty about the future of the entire Affordable Care Act, and that uncertainty threatens adverse consequences for our nation’s health care system, including for patients, doctors, insurers, and state and local governments.”

The Trump administration had called the December 2019 ruling “a win for all Americans.” However, many Republicans in Congress would prefer to avoid another election year battle over the ACA, after multiple prior efforts to repeal the federal health law have failed in the U.S. House and Senate.

On Monday, January 6, the Supreme Court notified the Trump administration and the states supporting overturn of the most recent ACA ruling they needed to respond to the attorneys general petition request by January 10, 2020. In their response, the administration said the Democratic lawsuit on Obamacare could wait until after the November election. The Department of Justice said its view is that the case does not represent an “emergency” that requires a speedy ruling.

In responding on January 21, the Supreme Court rejected the Democratic request to expedite the challenge to the lower court ruling. That action makes it unlikely the high court will rule on the case before the November election.

Be sure to visit the Word & Brown Newsroom for future updates on the 5th Circuit’s case.

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