A federal appeals court panel in New Orleans dealt another blow to the Affordable Care Act last week, agreeing with a lower-court judge that the portion of the health law requiring most people to have coverage is unconstitutional now that Congress has eliminated the tax penalty that was intended to enforce it.
But it is sending the case back to the lower court to decide how much of the rest of the law can stand in light of that ruling.
That most likely means the fate of the law will not be settled before the 2020 election.
The stakes could not be higher. The case is widely expected to end up at the Supreme Court. California Attorney General Xavier Becerra, who is leading a coalition of states defending the health law, announced that he would appeal to the high court immediately. And if the high court (which has upheld the ACA twice since its original passage in 2010) agrees with the appeals court, the decision could upend the nation’s entire health care system.
“It’s time to get rid of the uncertainty,” Becerra told reporters at a news conference. “Americans don’t need to be jerked around when it comes to their health care.”
Hanging in the balance is not only health coverage for the roughly 20 million Americans directly served by the ACA, but also hundreds of millions more whose health care and coverage have been affected by the thousands of changes enacted in the law. Those include provisions as wide-ranging as changes in Medicare drug copayments, requirements for calorie counts on menus, a pathway for approval of generic copies of expensive biologic drugs and, perhaps most important politically, protections for people
The requirement for coverage, often referred to as an individual mandate, was inserted in the law to give insurers a wide pool of customers since they were now required to cover people with medical conditions. Concerns about losing that guaranteed coverage for preexisting conditions was a potent argument of the Democrats when they made big gains in the 2018 midterm elections.
President Donald Trump heralded the court’s decision, saying that he has long asserted “that the individual mandate, by far the worst element of Obamacare, is unconstitutional.” He said overturning the mandate “will not alter the current health care system” and said his administration will work to protect guarantees of coverage for people with medical problems. But he didn’t give any specifics of how that would work.
Meanwhile, Democrats point out that the law has been working fine without the tax penalty, which was officially eliminated at the beginning of this year. They say that means, by definition, that the mandate is not necessary for the function of the rest the law.
In the court’s decision, two of the three judges on the panel agreed with the plaintiffs in the case who wanted the law struck down. Judge Jennifer Walker Elrod wrote: “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.”
But at the same time, the appeals court majority declined to say how much else of the law can remain. Instead, it ordered the lower court “to employ a finer-toothed comb and conduct a more searching inquiry into which provisions of the ACA Congress intended to be in-severable from the individual mandate.”
The third judge on the panel, Carolyn Dineen King, disagreed with both the lower court and the other two judges. In her dissent, she wrote that sending the case back to the lower court “will unnecessarily prolong this litigation and the concomitant uncertainty over the future of the healthcare sector.”
Reaction to the appeals court decision mostly broke along ideological lines.
Democrats were angry. “Tonight’s ruling is a sharp reminder to Americans that a heartless lawsuit supported by Congressional Republicans and President Trump is why vital health care protection, especially protections for people with pre-existing conditions, are in grave danger,” said a statement from Senate Minority Leader Chuck Schumer.
Conservatives were pleased. “Today’s decision reminds us that Obamacare has been on shaky ground since its creation,” said Marie Fishpaw of the conservative Heritage Foundation. “Patients deserve better than the high costs, limited choices and narrow provider networks that Obamacare brought to the health care system.”
But many Republicans also know that striking down the law could cause major repercussions to the health system. Sen. Lamar Alexander (R-Tenn.) said in a statement that while he was satisfied that the individual mandate itself might be unconstitutional: “I am not aware of a single senator who said they were voting to repeal Obamacare when they voted to eliminate the individual mandate penalty.”