News & Announcements

ACA Declared Unconstitutional, But No Changes Yet

Posted Wednesday, December 26, 2018 6:26 am

As you may have heard, a Texas federal court recently ruled the entire Affordable Care Act (“ACA”) unconstitutional.  What does that mean for you?  Nothing yet.

Lawsuit Background

As mentioned in this news digest article, the December 2017 Tax Cut and Jobs Act eliminated the individual mandate (a tax penalty for Americans who did not buy health insurance).  In February 2018, a group of Republican state attorneys general and governors initiated a lawsuit arguing that the elimination of the individual mandate rendered the entire ACA unconstitutional.  The attorneys general of 16 states (including Hawaii) and the District of Columbia intervened to defend the ACA because the Trump Administration declined to do so.

Federal Court Opinion

On December 14, 2018, Federal District Court Judge Reed C. O’Connor held that the individual mandate (previously upheld by the U.S. Supreme Court as valid under Congress’s Tax Power) could no longer be an exercise of Congress’s Tax Power because the tax will be reduced to $0 as of January 1, 2019.  Judge O’Connor ruled that the individual mandate was essential to the ACA, and without it, the entire ACA is unconstitutional.  Significantly, however, Judge O’Connor did not issue an injunction to stop officials from enforcing the ACA.

Now What?

Shortly after the ruling, the White House issued a statement:  “We expect this ruling will be appealed to the Supreme Court.  Pending the appeal process, the law remains in place.”  In fact, the Democratic attorneys general who defended the lawsuit, vowed to appeal.  Additionally, the Department of Health and Human Services said it will “continue administering and enforcing all aspects of the ACA as it had before the court issued its decision.  This decision does not require that HHS make any changes to any of the ACA programs it administers or its enforcement of any portion of the ACA at this time.”

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