Benefits Buzz

An Unexpected Challenge to the ACA

Posted on March 6th, 2018

In 2012, a lawsuit challenging the constitutionality of the Affordable Care Act (ACA) found its way all the up to the U.S. Supreme Court. At the time, an argument was made that the Individual Mandate was not constitutional. The Individual Mandate requires most Americans to have health insurance or pay a penalty, and this provision has been considered the main crutch that has kept the ACA standing. 
 
Republicans and opponents of the ACA argued that forcing people to buy health insurance exceeded the power of Congress. A comparison was made to broccoli during the court proceeding. Can Congress pass a law that requires every American to buy broccoli?
 
In the end, the Supreme Court ruled 5-4 that the Individual Mandate was a tax, and Congress has the power to levy taxes on U.S. citizens. The Individual Mandate and the ACA were subsequently ruled as being constitutional. 
 
Fast-forward to December 22, 2017 when the Tax Cuts and Jobs Act was signed into law. This law makes significant changes to the U.S. tax code, including changes to the Individual Mandate. It doesn’t eliminate the Individual Mandate, but it makes the penalty $0 for failing to have health insurance starting in 2019. 
 
Fast-forward again to February 26, 2018. A coalition of 20 states has filed a lawsuit against the federal government, claiming once again that the ACA is unconstitutional. The lawsuit is being led by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel. 
 
To summarize, the complaint filed references the 2012 Supreme Court ruling which found the Individual Mandate to be constitutional because it was tax. The complaint further argues that if there is no tax penalty, then the Individual Mandate cannot exist. This is what the Supreme Court ruled in 2012, per the lawsuit that was filed. You can’t have one without the other, and since the Individual Mandate is not severable from the rest of the ACA, that makes the entire ACA unlawful, the complaint alleges. 
 
We are now sitting in an interesting place. If you remember, President Donald Trump appointed Supreme Court Justice Neil Gorsuch last year. If this case reaches the Supreme Court again, there’s a legitimate chance the ACA could now be determined to be unconstitutional. Then there’s also the issue as to what extent the Trump administration will even try to defend the ACA seeing how this administration is generally opposed to the law. There’s no telling what will happen, and this is not how most people would’ve envisioned the ACA being dismantled.     
 

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