News from Washington

December 23, 2019

News from Washington

Last week the United States Court of Appeals for the Fifth Circuit (New Orleans) issued its ruling that the individual mandate in the Affordable Care Act (ACA) is unconstitutional. Below is a brief summary.

The Court was confronted with four questions:  

  1. Is there a legitimate case for the appellate court to review?
  2. Do the plaintiffs have standing to bring this case?
  3. Is the individual mandate constitutional given the fact that Congress repealed the tax tied to the mandate, which is what the Supreme Court based their original decision on?
  4. How broadly or narrowly should a determination be applied (i.e. the “severability” issue)?

In a 2 – 1 majority, the Court ruled:

  1. There is a legitimate case for review.   
  2. The plaintiffs have standing to bring this challenge to the ACA.
  3. The individual mandate is unconstitutional because it can no longer be read as a tax.
  4. On the severability question, the court remanded back to the District court for additional analysis.

In his original decision, the Federal District Court judge ruled the individual mandate was so essential to the overall working of the ACA that when the mandate was determined unconstitutional, he concluded the entire law was unconstitutional. 

The District court essentially ruled that the various pieces of the ACA were “inseverable” from one another. 

After agreeing that the individual mandate was unconstitutional, the Appellate court remanded the case back to the District Court and asked that the judge review his conclusion on severability. The Appellate decision makes clear that the District Judge is free to make the same severability finding upon further review or draw a new conclusion. 

Some options for the District Court judge include: the entirety of the ACA is unconstitutional; those parts of the ACA most directly linked to the mandate are unconstitutional, but other parts with no obvious connection are constitutional; or only the mandate is unconstitutional and everything else in the ACA can stand.

We will be providing a more in-depth analysis and will keep you updated as the process moves forward. The Advocacy Council – we have you covered.