Court: Part of 'Obamacare' invalid, more review needed

A federal appeals court says the “individual mandate” of former President Barack Obama’s health care law is invalid, but other parts of the law need further review

NEW ORLEANS —
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, President Barack Obama’s signature health care policy, 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 what happens to some of the most popular parts of the Affordable Care Act such as protections for those with 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 so-called “individual mandate,” was rendered unconstitutional when Congress, in 2017, reduced a tax on people without insurance to zero.

The court reached no decision on the big issue — how much of the Affordable Care Act 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. It may be that all of the ACA is severable from the individual mandate. It may also be that some of the ACA is severable from the individual mandate, and some is not,” Judge Jennifer Elrod wrote.

O’Connor has to be more specific about which parts of the law can’t be separated from the mandate, and 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.

“For now, the President got the gift he wanted — uncertainty in the healthcare system and a pathway to repeal — so that the healthcare that seniors, workers and families secured under the Affordable Care Act can be yanked from under them,” 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.”

The court’s ruling ensures “Obamacare” will remain a political issue during the 2020 election campaign, giving Democrats a line of attack against President Donald Trump and congressional Republicans. 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 plan run by the government.

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.

The lawsuit followed congressional approval of a major tax cut in 2017, which included the reduction of the “Obamacare” tax on the uninsured to zero. The case came about because “Obamacare” opponents noted a splintered Supreme Court ruling of 2012 that upheld the law. In that decision, conservative justices had rejected the argument that Congress could require that everyone buy insurance. But Chief Justice John Roberts, joining four liberal justices, said Congress did have the power to tax those without insurance.

With no tax in effect, the Texas lawsuit argued, the so-called “individual mandate” was unconstitutional and the entire law must fall. Judge O’Connor agreed in his December ruling.

Supporters of the law said the reduction of the tax penalty to zero could be read as a suspension of the tax, which didn’t render the mandate unconstitutional. They said the structure for collecting a penalty from the uninsured remained in place.

They added that, even if the individual mandate was rendered unconstitutional by the tax cut bill, the rest of the law could be salvaged.

Congress had already failed to repeal the Affordable Care Act in its entirety, the law’s supporters noted. What happened in 2017, they contended in written arguments, is that Congress “chose to make the minimum coverage provision unenforceable — while leaving every other part of the ACA in place.”

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Sherman contributed from Washington. AP Writers Kevin McGill in New Orleans and Ricardo Alonso-Zaldivar in Washington also contributed to this report.