HomeWashington Letter2019 ▶ Appeals Court Splits ACA Decision - Striking Down Coverage Mandate But Sending Rest of Law Back to Lower Court
Appeals Court Splits ACA Decision - Striking Down Coverage Mandate But Sending Rest of Law Back to Lower Court

On Dec. 18, 2019, a federal appeals court in New Orleans issued its ruling in a major case against the Affordable Care Act (ACA), brought by 18 Republican states, led by Texas. The Fifth Circuit Court of Appeals’ three-judge panel ruled that because Congress repealed the ACA’s individual insurance mandate tax penalty, the mandate is unconstitutional. The mandate was originally upheld by the U.S. Supreme Court in 2012 as a legal use of Congress’s power to levy taxes.

The court did not issue a ruling on the legal standing of the rest of the ACA, instead directing that part of the case back to a lower circuit court, specifically, to the judge, Reed O’Connor, who originally found the entire ACA unconstitutional. Since the appeals court has deferred  to another court and delayed a final decision on the full law, the decision does not adversely affect the ACA’s protections for people with preexisting conditions; coverage and subsidies through ACA marketplaces; or other important parts of the law.

In its ruling, the Fifth Circuit Panel asked District Court Judge O’Connor to determine which parts of the ACA are “severable,” or can be legally maintained without the mandate’s tax penalty, and additionally, whether his ruling should apply only to the Republican-led states that brought the original case. By sending part of the case back to the lower court, the Fifth Circuit majority may have intended to slow the case down and prevent the Supreme Court from considering it before the election. However, lead defendant in the case, California Attorney General Xavier Becerra, has indicated that he may ask the Supreme Court to take the case before a ruling by Judge O’Connor. The defending states have argued that although Congress eliminated the insurance mandate penalty, it did not intend for the entire law to be disrupted.

Although the ruling does not affect ACA coverage and patient protections, it does sustain the legal threat to the law, and leave a potential final resolution in the hands of the conservative-controlled Supreme Court. It also ensures that the ACA and health coverage will be a top issue in the 2020 Presidential election.

Last Reviewed: December 2019