Federal Judge Rules Against Obamacare as Legal Battles Continue

On Friday evening, a federal judge in Texas ruled against the Affordable Care Act (ACA), or Obamacare, in response to a lawsuit from 20 states that argued that the repeal of the individual mandate penalty rendered the overall law unconstitutional.  The court did not issue an injunction requiring immediate compliance, and it is expected that this ruling will be challenged.
 
Despite the ruling which impacts several federal agencies, the Administration, including Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma confirmed that the health care exchanges continue and that “there is no impact to current coverage or coverage in a 2019 plan.”
 
In 2012, the Supreme Court concluded that the “individual mandate” requiring all Americans to have health insurance or pay a tax penalty was within Congress’ taxing power, and therefore within its constitutional authority.  However, in 2017, Congress approved the Tax Cuts and Jobs Act of 2017, which zeroed out the tax penalty associated with the individual mandate. Earlier this year, 18 state attorneys general, two governors and two individual plaintiffs brought a lawsuit claiming that the elimination of the ACA individual mandate tax penalty resulted in the mandate being unconstitutional, since without a tax, the mandate could no longer be viewed as within the Congress’ taxing power.
 
It is expected that this case will continue to proceed through various levels of appeals before being considered by the Supreme Court, likely not until at least 2020.
 
ASA will continue to monitor this case and other issues related to the Affordable Care Act.