Federal Appeals Court Rules on ACA Individual Mandate

The federal Fifth Circuit Court of Appeals ruled on Dec. 18, 2019, that the Affordable Care Act’s (ACA) individual mandate is unconstitutional. However, the court remanded the case back to the federal district court in Texas to decide how much of the rest of the ACA is unconstitutional.

In December 2018, the district court ruled the entirety of the ACA unconstitutional because it found the unconstitutional individual mandate was “essential” to the ACA. Congress zeroed out the tax penalty appropriation, yet left in place the ACA’s individual mandate in the federal tax reform bill in December 2017. 18 other states, led by Texas, argued that the remaining mandate, without an active tax penalty, violates the Commerce Clause of the U.S. Constitution, and Congress does not have the constitutional authority to compel citizens to purchase health insurance. (Wisconsin initially led the lawsuit, but Attorney General Josh Kaul removed the state from the lawsuit earlier this year.)

While the appeals court agreed with the district court that the individual mandate is unconstitutional, it declined to strike down the entirety of the law. Instead, the court directed the district court to determine which other specific ACA provisions are “inseverable from the individual mandate.” The appeals court ruling was 2-1, with judges appointed by President George W. Bush and President Donald Trump in favor, and a judge appointed by President Jimmy Carter dissenting.

It is expected that the case will ultimately be appealed to the U.S. Supreme Court, but likely not until after 2020.