Appeals Court Upholds Ruling That Obamacare Mandate is Unconstitutional

‘Without any enforcement mechanism to speak of, questions about the legality of the individual ‘mandate’ are purely academic…’

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(Liberty Headlines) The “individual mandate” of former President Barack Obama’s health care law is invalid, but other parts of the law need further review, a federal appeals court ruled Wednesday.

The court’s decision will not immediately affect the Affordable Care Act, which remains in place while the court case continues.

The 2-1 ruling handed down by a panel of the 5th U.S. Circuit Court of Appeals in New Orleans largely sidestepped concerns over pre-existing conditions, Medicaid expansion and the ability for children under the age of 26 to remain on their parents’ insurance.

The panel agreed with Texas-based U.S. District Judge Reed O’Connor’s 2018 finding that the law’s insurance requirement, the “individual mandate,” was rendered unconstitutional when Congress, in 2017, reduced a tax on people without insurance to zero.

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The court reached no decision on the big issue—how much of the ACA must fall along with the insurance mandate. The act has remained in place while the question of its future has been litigated in court.

“It may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded,” Judge Jennifer Elrod wrote.

“It may be that all of the ACA is severable from the individual mandate,” Elrod said. “It may also be that some of the ACA is severable from the individual mandate, and some is not.”

The individual mandate was central to a 2012 Supreme Court decision that upheld the law after opponents challenged that it violated interstate commerce laws by imposing a penalty on those who declined health coverage. Chief Justice John Roberts joined the court’s liberal wing, who determined that said penalty was, in fact, a tax that Congress was permitted to authorize.

5th Circuit Court of Appeals / PHOTO: Associated Press

Despite siding with O’Connor, the 5th Circuit panel said he needed to be more specific about which parts of the law can’t be separated from the mandate. His review also must take into account Congress’ decision to leave the rest of the law essentially unchanged when it reduced the penalty for not having insurance to zero, Elrod wrote.

In dissent, Judge Carolyn Dineen King said her colleagues were prolonging “uncertainty over the future of the healthcare sector.” King would have found the mandate constitutional, although unenforceable, and would have left the rest of the law alone.

“Without any enforcement mechanism to speak of, questions about the legality of the individual ‘mandate’ are purely academic, and people can purchase insurance—or not—as they please,” King wrote. “No more need be said; it has long been settled that the federal courts deal in cases and controversies, not academic curiosities.”

California Attorney General Xavier Becerra, who is leading state efforts to defend the law, promised a quick appeal to the Supreme Court. There, any buyers’ remorse from the chief justice over his earlier opinion may be tested alongside the views of two new, conservative Trump appointees: justices Neil Gorsuch and Brett Kavanaugh. (Both replaced Reagan-appointed justices who initially dissented on the Obamacare ruling.)

“For now, the President got the gift he wanted—uncertainty in the healthcare system and a pathway to repeal,” Becerra said in a statement.

Attorney General Ken Paxton of Texas applauded the court’s decision to declare the mandate unconstitutional.

“As the court’s opinion recognized, the only reason the Supreme Court upheld Obamacare in 2012 was Congress’ taxing power, and without the individual mandate’s penalty that justification crumbled,” Paxton wrote.

“We look forward to the opportunity to further demonstrate that Congress made the individual mandate the centerpiece of Obamacare and the rest of the law cannot stand without it.”

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The court’s ruling ensures Obamacare will remain a political issue during the 2020 election campaign. With the health law’s ultimate fate still in doubt, Democrats will argue that Republicans are trying to strip coverage away from 20 million Americans.

All the Democratic presidential candidates favor expanding coverage to the remaining 27 million uninsured, although their ideas range from building on the Obama health law to replacing America’s mix of private and public insurance with a single “Medicare-for-all” plan run by the government. Some of the plans, such as that of Sen. Elizabeth Warren, would be estimated to cost more than $20 trillion.

The decision comes after the conclusion of sign-up season for ACA coverage for next year. Technical glitches over the weekend had led to an extension until early Wednesday. That means the court ruling will not affect enrollment for 2020.