Affordable Care Act

Trump v. Pennsylvania and Little Sister of the Poor Saints Peter and Paul Home v. Pennsylvania are complicated cases. The most prominent legal issue in them is whether the Trump administration has the statutory authority to expand the Affordable Care Act (ACA) contraceptive mandate’s conscience exemption....

In a long-awaited decision in Texas v. Azar the Fifth Circuit held that the Affordable Care Act’s (ACA) individual mandate is unconstitutional. This decision has no practical effect because no one is currently required to pay the shared-responsibility payment. A year ago, a federal district court held the individual mandate is inseverable from the ACA rendering the entire law unconstitutional. The Fifth Circuit sent the case back to the lower court...

In Moda Health Plan v. United States the Supreme Court will decide whether Congress may enact appropriations riders restricting the sources of funding available to pay health insurers for losses incurred that were supposed to be paid per federal law.

The Affordable Care Act’s (ACA) risk corridor program provided that if a health insurance plan participating in the exchange lost money between 2014-2016 it would receive a payment from the federal government based on a formula defined in the statute. If it made money the plan had to pay the federal government based on a formula. The purpose of the program was to induce health insurance companies to offer plans on the exchange despite the fact they didn’t have reliable data to price the plans.

The Government Accountability Office (GAO) identified a particular funding source the federal government could use to make payments. Congress passed appropriations riders for all three years disallowing that funding source to be used to make risk corridor payments.

In December 2018 a federal district court declared the Affordable Care Act (ACA) individual mandate unconstitutional. It also declared the remaining provisions of the act “inseverable,” meaning also invalid. The court didn’t issue a nationwide injunction which would have had the effect of immediately ceasing all aspects of law.

In the district court litigation the Department of Justice (DOJ) didn’t defend the individual mandate. But it did argue that other provisions of the ACA, excluding the guaranteed-issue and community-rating requirements, which were intended to provide affordable health insurance for those with pre-existing conditions, were severable. Now DOJ has informed the Fifth Circuit that it has changed course and agrees with the lower court that the entire ACA was properly invalidated.

While a federal district court struck down the Affordable Care Act as unconstitutional on December 14, the Act and the litigation will continue. The judge didn’t issue a nationwide injunction which would have had the effect of immediately ceasing all aspects of law.

Unsurprisingly, the states defending the law have stated they will appeal this ruling to the Eleventh Circuit. Particularly if the Eleventh Circuit agrees with the lower court the Supreme Court is likely to hear this case though not until its next term beginning October 2019.

The Affordable Care Act individual mandate required uninsured who didn’t purchase health insurance to pay a so-called shared-responsibility payment. In 2012 the Supreme Court held the individual mandate is a constitutional “exercise of Congress’s Tax Power because it triggered a tax.” The Tax Cuts and Jobs Act of 2017 reduced the tax to $0 as of January 1, 2019.

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