A Federal Court Declined To Rule On Whether Obamacare Is Lawful, Extending The Fight Yet Again

The 5th Circuit Court of Appeals punted on the key question of whether Obamacare is unconstitutional and must be thrown out.

WASHINGTON — A major decision in the legal fight to repeal the Affordable Care Act left both sides unsatisfied Wednesday as a federal court declined to rule on whether the landmark health law is unconstitutional.

Instead, the 5th Circuit Court of Appeals sent the case back to a lower court and demanded further analysis.

The court did rule that one small part of the ACA, commonly known as Obamacare, was unconstitutional — the “individual mandate” tax penalty on people who could afford to buy health insurance but chose not to. That penalty had already been effectively repealed by Congress.

But the court punted on the broader question of whether one part of the ACA being unconstitutional meant the entire 900-page law was; the court sent the matter back to a district court “to provide additional analysis of the provisions of the ACA as they currently exist.”

Democrats and progressive groups decried the ruling, saying the decision drags out the Republican lawsuit and Americans will continue to fear that their health insurance will be taken away. California Attorney General Xavier Becerra said, “The President got the gift he wanted — uncertainty in the healthcare system and a pathway to repeal.”

Becerra announced he will appeal the ruling directly to the Supreme Court. If successful, that would likely mean the case is heard before the next presidential election.

The drive to overturn Obamacare began in earnest after President Donald Trump took office and Republicans controlled both the Senate and the House. Legislative attempts collapsed when they could not agree on a replacement bill, so Republicans instead struck down just one narrow part of the ACA by eliminating the individual mandate tax penalty on people who could afford health insurance but chose to not buy it.

In early 2018, 20 Republican state attorneys general, led by Texas, launched a lawsuit arguing that the individual mandate repeal rendered the entire ACA unconstitutional, including popular provisions such as protections for people with preexisting health conditions.

Their lawsuit makes a two-part argument. The first part is generally seen as a valid legal question, while the second part has been widely derided by lawyers from across the political spectrum.

The first part rests on the 2012 Supreme Court ruling that Congress’s taxation powers allow it to charge the individual mandate penalty to coerce people to buy health insurance. The Texas lawsuit argues that because the ruling hinged on Congress’s taxation powers, the individual mandate became unconstitutional when Congress functionally eliminated the tax penalty by setting it at $0. In a vacuum, this could be a wonky philosophical debate: Is a tax still a tax if the tax is free?

The 5th Circuit agreed with Texas on this count, finding “the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.”

But the second part of the Texas lawsuit argues that the individual mandate is an essential part of the ACA — and if it is unconstitutional, then the entire legislation is. On its own, this would likely lead to tens of millions of people losing health insurance as Obamacare markets fold, as well as the return of preexisting condition discrimination; it would also kill Medicaid expansion, which covers millions of people with low incomes.

It is on this crucial question that the court deferred a ruling. The move extends the court battle and could push a final ruling past the 2020 presidential election.

Senate Republicans have said that in the event of repeal, Congress would act to pass an Obamacare replacement plan to avoid the return of preexisting condition discrimination. Democrats have mostly described the idea of a divided Congress passing comprehensive health reform in an election year as delusional.

Typically administrations defend federal laws, but the Trump administration instead sided with the Republican-led states and argued most of the ACA should be struck down.

Legal experts of all stripes have blasted the Texas lawsuit because, they say, the intent of Congress was clear: The individual mandate was repealed while the rest of the ACA was left to stand. But last December, US District Judge Reed O’Connor sided with Texas and found the entire ACA unconstitutional. It was appealed to the 5th Circuit Court of Appeals.

In an incredulous dissent, Judge Carolyn Dineen King argued it was obvious that the ACA does not need to be tossed out. King said that the court is trying to answer the question of whether Congress would want to keep the ACA in force if the individual mandate is repealed.

“Answering that question should be easy, since Congress removed the [mandate’s] only enforcement mechanism but left the rest of the Affordable Care Act in place,” wrote King. “It is difficult to imagine a plainer indication that Congress considered the coverage requirement entirely dispensable and, hence, severable.”

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