Affordable Care Act Individual Mandate Ruled Illegal

A federal appeals court ruled Wednesday that Obamacare's individual mandate runs afoul of the Constitution because it is no longer a tax following President Trump's decision to rearrange his predecessor's program.

But the 5th U.S. Circuit Court of Appeals, in a 2-1 decision, put off a thornier question — whether other parts of the Affordable Care Act can still stand without the lever that forced Americans to either get insurance or pay a penalty.

Judges asked the lower court to go back and evaluate which provisions can survive, setting up a high stakes review and injecting new uncertainty ahead of the 2020 election.

"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," wrote Judge Jennifer Elrod, a Bush-appointee.

"But it is no small thing for unelected, life-tenured judges to declare duly enacted legislation passed by the elected representatives of the American people unconstitutional."

Judge Carolyn King, a Carter-appointee, dissented, saying she would hold the coverage requirement legal.

The decision to punt the case back down the judicial ladder makes it likely that another Obamacare showdown before the Supreme Court, should the case make it there, will have to wait until after 2020.

Even so, the court's decision Wednesday will revive the Obamacare wars as Mr. Trump contends with impeachment and gets ready for a bruising reelection battle.

President Trump, who loathes Obamacare, said the decision is "a win for all Americans and confirms what I have said all along: that the individual mandate, by far the worst element of Obamacare, is unconstitutional."

He reissued promises to deliver "the best health care in the world" and contrasted his plans with liberals' push for a government-run, single-payer health care system.

Democrats, meanwhile, said Mr. Trump and his GOP pals jumped off a ledge without a parachute, using a conservative judiciary as accomplices.

"Despite their claims to support protections for people with preexisting conditions, Republicans have taken every opportunity to dismantle them," House Speaker Nancy Pelosi said.

Though nothing will change immediately, she said the decision is a "chilling threat" to key protections for sicker Americans, which could be at risk without the mandate.

Republicans, meanwhile, saw the decision as an opportunity for Congress to revisit Obamacare and see if they can do better, while somehow preserving protections for people with preexisting medical conditions.

Mr. Trump and his GOP allies failed to replace Obamacare as promised in 2017. But later that year, they used a tax bill to zero out the part of the law that requires Americans to either get insured or pay a tax.

State GOP plaintiffs seized on that change, reasoning that if the mandate is no longer collecting money, is it not the "tax" that Chief Justice John G. Roberts relied on in upholding the health law five years earlier.

Blue-state attorneys general have argued in court the mandate is still on the books and, furthermore, Congress clearly intended to leave the rest of the law alone when it gutted the mandate.

A district court judge in Texas agreed with the red states, setting up the appellate battle.

The circuit court said it could no longer view the mandate as an enforceable tax, though it is not sure what else is now in peril — for example, the protections for preexisting conditions or the expansion of Medicaid coverage in dozens of states and subsidies for middle-class Americans who buy insurance on their own.

The judges suggested the district court's ruling may have been overly broad, and that it should conduct a "granular" review of which parts are tethered to the mandate. However, it said it wouldn't prescribe how "fine-toothed that comb should be."

"The rule of law demands a careful, precise explanation of whether the provisions of the ACA are affected by the unconstitutionality of the individual mandate as it exists today," Judge Elrod wrote.

Democrats are seizing on the fresh uncertainty, saying Mr. Trump cheered the state-driven lawsuit without a backup plan despite promising insurance "for everyone" during the last campaign.

"Today's ruling is the result of the Trump administration and congressional Republicans attempting to make dangerous health policy using the courts since they failed to succeed in Congress," said House Ways and Means Committee Chairman Richard Neal on Wednesday. "This is a blow to our nation's health care system and the millions of Americans who have gained coverage and protections under the Affordable Care Act."

California Attorney General Xavier Becerra, who is leading nearly two dozen states fighting to uphold the law, said the 5th Circuit's ruling could lead the country to a "dangerous and irresponsible place," putting healthcare for millions on the line. He said he will ask the Supreme Court for a speedy review of the appellate ruling.

"California will move swiftly to challenge this decision because this could mean the difference between life and death for so many Americans and their families," he said.

Meanwhile, Texas Attorney General Ken Paxton, who challenged the law, said the ruling was a victory because the "legal system can be held to its word."

"The Fifth Circuit correctly held that the individual mandate is unconstitutional, and 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," he said.

The tension will also trickle down to Senate races, where liberals are eager to paint vulnerable Republican Sen. Susan Collins of Maine as partly responsible for the case. She thwarted Mr. Trump's Obamacare plans but voted for the tax bill that set the table for the lawsuit over the mandate.

The senator is among a handful of Republicans who urged the Trump administration's Justice Department to reconsider its support for the lawsuit, saying Congress never intended to gut the law when it zapped the mandate.

Likewise, Sen. Lamar Alexander said he's not aware "of a single senator who said they were voting to repeal Obamacare when they voted to eliminate the individual mandate penalty."

"I thought the Justice Department's argument in the case was far-fetched," the Tennessee Republican said.

Yet Sen. Ben Sasse, Nebraska Republican, said the ruling gives lawmakers a shot at finding "real solutions" to the Obamacare morass, while Senate Finance Committee Chairman Chuck Grassley called on both parties to come together.

"Congress should work to ensure that no matter the ultimate outcome, Americans who have preexisting conditions are protected from losing their insurance or facing discrimination," he said. "This is something that has broad, bipartisan support."