Texas judge strikes down Affordable Care Act; individual mandate is unconstitutional, he says

FILE - In this May 18, 2017 file photo, the Healthcare.gov website is seen on a laptop computer, in Washington. Former Obama administration officials say they're launching a private campaign to encourage people to sign up for coverage next year under the Affordable Care Act.  (AP Photo/Alex Brandon, File)
FILE - In this May 18, 2017 file photo, the Healthcare.gov website is seen on a laptop computer, in Washington. Former Obama administration officials say they're launching a private campaign to encourage people to sign up for coverage next year under the Affordable Care Act. (AP Photo/Alex Brandon, File)

WASHINGTON -- A federal judge in Texas struck down Friday the entire Patient Protection and Affordable Care Act on the grounds that its mandate requiring people to buy health insurance is unconstitutional and the rest of the law cannot stand without it.

The ruling was over a lawsuit filed this year by a group of Republican governors and state attorneys general, including Arkansas Attorney General Leslie Rutledge. A group of intervening states led by Democrats promised to appeal the decision, which most likely will not have any immediate effect. But it will likely make its way to the Supreme Court, threatening the survival of the landmark health law and, with it, health coverage for millions of Americans, protections for people with pre-existing conditions and much more.

In his ruling Friday, Judge Reed O'Connor of U.S. District Court in Fort Worth said that the individual mandate requiring people to have health insurance "can no longer be sustained as an exercise of Congress' tax power."

Accordingly, O'Connor, a George W. Bush appointee, said that "the individual mandate is unconstitutional" and the remaining provisions of the Affordable Care Act signed into law by President Barack Obama are invalid.

At issue was whether the health law's insurance mandate still compelled people to buy coverage after Congress reduced the penalty to zero dollars as part of the tax overhaul that President Donald Trump signed last December. When the Supreme Court upheld the mandate as constitutional in 2012, it was based on Congress' taxing power. Congress, the court said, could legally impose a tax penalty on people who do not have health insurance.

But in the new case, the plaintiffs, led by Texas, argued that with the penalty zeroed out, the individual mandate had become unconstitutional -- and that the rest of the law could not be severed from it.

The Justice Department's response to the case was unusual: though it disagreed with the plaintiffs that the entire law should be struck down, it declined this year to defend not just the individual mandate, but the law's provisions that protect people with pre-existing conditions. That prompted a coalition of 16 states and the District of Columbia, led by California, to intervene and defend the law.

On Friday night, a spokesman for Xavier Becerra, the California attorney general, said California and the other defendant states would challenge the ruling with an appeal in the 5th U.S. Circuit Court of Appeals in New Orleans.

"Today's ruling is an assault on 133 million Americans with pre-existing conditions, on the 20 million Americans who rely on the [Affordable Care Act's] consumer protections for health care, on America's faithful progress toward affordable health care for all Americans," Becerra said in a statement. "The [Affordable Care Act] has already survived more than 70 unsuccessful repeal attempts and withstood scrutiny in the Supreme Court."

Trump, who has consistently sought the law's repeal and has weakened it through regulatory changes, posted a response to the ruling on Twitter late Friday: "As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions."

The White House, in a separate statement late Friday, said, "We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place."

Today is the sign-up deadline for 2019 private plans through healthcare.gov.

Legal expert Timothy Jost, a supporter of the health law, said O'Connor's ruling would have repercussions for nearly all Americans if it stands. If the entire health care law is invalidated, popular provisions that benefit Medicare beneficiaries and people with employer coverage would also be scrapped. That could include the section that allows parents to keep young adult children on their coverage until age 26.

About 20 million people have gained insurance coverage since the health care law passed in 2010. Currently, about 10 million have subsidized private insurance through the health law's insurance markets, while an estimated 12 million low-income people are covered through its Medicaid expansion.

Also at risk will be the law's popular protections for people with pre-existing conditions, which became a major talking point in the November midterm elections.

Without those protections, insurers could return to denying coverage to such people or to charging them more. They could also return to charging people more based on their age, gender or profession.

The Kaiser Family Foundation, a nonpartisan research organization, estimates that 52 million adults from 18 to 64, or 27 percent of that population, would be rejected for coverage under the practices that were in effect in most states before the Affordable Care Act.

"If this Texas decision on the [Affordable Care Act] is upheld, it would throw the individual insurance market and the whole health care system into complete chaos," Larry Levitt, a senior vice president of the Kaiser Family Foundation, wrote on Twitter. "But, the case still has a long legal road to travel before that's an immediate threat."

The Supreme Court upheld the health care law as constitutional in 2012 and 2015, though the first of those opinions struck down the Affordable Care Act's provision that was to expand Medicaid nationwide, letting each state choose instead. No matter how O'Connor ruled, legal experts have been forecasting that the Texas case would be appealed and could well place the law again before the high court, giving its conservative newest member, Justice Brett Kavanaugh, a first opportunity to take part.

Democrats immediately criticized the ruling as absurd. Rep. Nancy Pelosi of California said that when the party takes control of the House next month, with her as speaker, it would "move swiftly to formally intervene in the appeals process to uphold the lifesaving protections for people with pre-existing conditions and reject Republicans' effort to destroy the Affordable Care Act."

In his ruling, O'Connor agreed with the plaintiffs that the individual mandate could not be severed from the rest of the Affordable Care Act because it was "the keystone" of the law, essential to its regulation of the health insurance market.

"The individual mandate is inseverable from the entire [Affordable Care Act]," he declared.

The judge said he would not "parse the [Affordable Care Act's] provisions one by one" but had to invalidate the whole law, including the expansion of Medicaid and the requirement for employers to offer coverage to workers. "The Medicaid-expansion provisions were designed to serve and assist fulfillment of the individual mandate," he wrote.

At oral arguments before O'Connor in September, California and the other intervening states had argued that the mandate could not be unconstitutional if it was not forcing people to pay penalties anymore. But even if O'Connor threw it out, they said, the rest of the law could legally be severed from it and survive.

The ruling comes at the end of the fifth open enrollment season for Affordable Care Act coverage, one that has so far seen sign-ups decline about 12 percent compared with last year.

Information for this article was contributed by Abby Goodnough and Robert Pear of The New York Times; by Ricardo Alonso-Zaldivar of The Associated Press; and by Amy Goldstein of The Washington Post.

A Section on 12/15/2018

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