WASHINGTON -- A federal appeals court on Wednesday upheld a lower-court ruling that the Affordable Care Act's (ACA) individual mandate is unconstitutional, but told the district judge in the case to look again at whether other parts of the law can still stand.
"The individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power," wrote Judge Jennifer Walker Elrod for the three-judge panel of the U.S. Court of Appeals for the Fifth Circuit. "On the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist."
The individual mandate was the ACA provision requiring people to buy health insurance or pay a financial penalty. When Congress eliminated that penalty in 2017, the mandate lost its force, so no immediate practical impact will ensue from Wednesday's ruling. Its chief significance is that it keeps alive the possibility that the entire ACA will eventually be struck down.
Texas v. United States of America -- also called Texas v. Azar, as Health and Human Services (HHS) Secretary Alex Azar is charged with implementing the law -- was filed in early 2018 by Texas and 19 other Republican-controlled states.
In December 2018, lower-court Judge Reed O'Connor of the U.S. District Court for the Northern District of Texas sided with the plaintiffs that the ACA was unconstitutional after Congress scrapped the individual mandate penalty as part of the Tax Cuts and Jobs Act (TCJA) of 2017. Congress had unequivocally stated time and again that the mandate was "essential" and "inseverable" from the rest of the ACA's provisions, O'Connor explained, but that rewriting the law without its "essential" feature was beyond the power of his court.
In her , Elrod noted that regarding the court's reasons for remanding the rest of the case back to the district court, "it may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded. It may be that all of the ACA is severable from the individual mandate. It may also be that some of the ACA is severable from the individual mandate, and some is not."
"But it is no small thing for unelected, life-tenured judges to declare duly enacted legislation passed by the elected representatives of the American people unconstitutional," she wrote. "The rule of law demands a careful, precise explanation of whether the provisions of the ACA are affected by the unconstitutionality of the individual mandate as it exists today."
In addition, the district court can carefully consider what remedy should be given to the plaintiffs, considering that the defendants requested in their appeal that the remedy only apply to the states involved in the lawsuit and only to those ACA provisions that injure the plaintiffs, she added. "We place no thumb on the scale as to the ultimate outcome; the district court is free to weigh the federal defendants' changed arguments as it sees fit."
Judge Carolyn Dineen King dissented from the decision, arguing that on the question of whether the rest of the ACA is enforceable if the individual mandate is invalidated, "answering that question should be easy, since Congress removed the coverage requirement's only enforcement mechanism but left the rest of the Affordable Care Act in place. It is difficult to imagine a plainer indication that Congress considered the coverage requirement entirely dispensable and, hence, severable."
"And yet, the majority is unwilling to resolve the severability issue," she continued. "Instead, it merely identifies serious flaws in the district court's analysis and remands for a do-over, which will unnecessarily prolong this litigation and the concomitant uncertainty over the future of the healthcare sector."
As to whether the rest of the ACA is still valid, "contrary to the suggestion of the majority ... Congress did not alter the coverage requirement's operation when it amended the ACA in 2017" under the Tax Cuts and Jobs Act (TCJA), King said. "All the TCJA did, with respect to healthcare, was change the amount of the shared-responsibility payment to zero dollars. Thus, despite textual appearances, the post-TCJA coverage requirement does nothing more than require individuals to pay zero dollars to the IRS if they do not purchase health insurance, which is to say it does nothing at all ... Nobody has standing to challenge a law that does nothing."
"When Congress does nothing, no matter the form that nothing takes, it does not exceed its enumerated powers. And since courts do not change anything when they invalidate a law that does nothing, every other law retains, or at least should retain, its full force and effect."
"The district court's opinion is textbook judicial overreach," King concluded. "The majority perpetuates that overreach and, in remanding, ensures that no end for this litigation is in sight."
What might happen next? "It's complicated, but it seems pretty likely that the blue states who have intervened will ask the Supreme Court to hear the case," Nicholas Bagley, JD, a law professor at the University of Michigan in Ann Arbor, . "If the Supreme Court doesn't hear the case, we're back into a waiting game. Judge O'Connor will ask for briefing, argument, and then he'll have the unenviable job of writing a long opinion undertaking the more "granular" severability analysis that the Fifth Circuit demanded ... After that, it's back up to the Fifth Circuit, and from there to the Supreme Court. But that could take years, all the while with this (stupid) cloud ... hanging over the ACA."