Court Rules ACA Unconstitutional

On December 14, 2018, a federal judge in Texas ruled that the Affordable Care Act (ACA) is unconstitutional now that Congress has eliminated the individual mandate penalty. The ruling came in response to a lawsuit brought against the federal government by Texas and 19 Republican state attorneys general in February of this year. The plaintiffs argued that the individual mandate was a critical component of the ACA and without it the remainder of the law, including the patient protections as well as other Medicare payment changes, is unconstitutional. The Tax Cuts and Jobs Act signed into law in December of 2017, zeroed out the individual mandate penalty, beginning January 1, 2019. In his decision, the Texas judge referenced a prior U.S. Supreme Court ruling that the ACA is a tax, and consequently, the entire law is invalidated by the 2017 Tax Cuts and Jobs Act.

There is no immediate impact on patients, providers or insurers because the judge did not issue an injunction, which would stop the ACA’s implementation immediately. Democratic state attorneys general have already filed an appeal. If the decision, which may be appealed to the Supreme Court, is upheld, 20 million Americans could lose coverage and the protections for individuals with pre-existing conditions could be at risk. Prominent members of the Senate, including Senator Schumer (D-NY) and Senator Grassley (R-IA), have already announced this as a priority for 2019. Democrats still vow to protect the ACA, while Republicans try to maintain a balance between supporting protections for pre-existing conditions and opposing the law overall.

ASH continues to advocate for access to affordable, high quality health care for Americans and to support the private insurance reforms that now prohibit health plans from discriminating against patients with pre-existing conditions or imposing limits on annual and lifetime benefits.