I have long been critical of the individual mandate under the Affordable Care Act or Obamacare (See, e.g., here and here and here). Yesterday, the Fifth Circuit Court of Appeals handed down a major 2-1 ruling striking down the mandate as unconstitutional. The litigation however will continue over the viability of the rest of the Act without the individual. As discussed in an earlier column, pulling out the individual mandate creates a Jenga-like dilemma for the courts.

As I previously discussed last December, U.S. District Judge Reed O’Connor of the Northern District of Texas ruled that the individual mandate was unconstitutional and, using the Obama Administration’s own words, so essential to the Act that the entirety of the ACA had to be struck down.

In the decision below, Judges Jennifer Elrod and Kurt Engelhardt ruled that “[t]he individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.” However, the panel significantly did not sign off on the striking down of the entire Act. It stated “[o]n the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.” The panel did not offer any insights in how that severability analysis would conclude: “It may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded. 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.” This leaves other important provisions in jeopardy, including sections dealing with preexisting conditions as well as subsidies and the expansion of Medicaid coverage.

The panel called the Supreme Court to account as did the district court. Chief Justice John Roberts saved the mandate by calling it a tax pursuant Congress’ taxing powers under Article I of the U.S. Constitution. Id.; U.S. Const. art. I, § 8, cl. 1. A majority of justices, including Roberts, agreed that the provision would otherwise be unconstitutional under the Commerce Clause because it would have done more than “regulate commerce . . . among the several states.” U.S. Const. art. I, § 8, cl. 3. Congress however later killed the tax aspect of the mandate, exposing the mandate and the Act as a whole to this challenge.

This is a middle option between agreeing to strike down the entire Act or simply upholding the Act. It will allow a period of transition before any final decision is rendered if Congress wants to act.

The panel broke along ideological lines. The liberal member, Judge Carolyn King, disagreed with her two conservative colleagues. She held:

“I would vacate the district court’s order because none of the plaintiffs
have standing to challenge the coverage requirement. And although I would not reach the merits or remedial issues, if I did, I would conclude that the coverage requirement is constitutional, albeit unenforceable, and entirely severable from the remainder of the Affordable Care Act.”

The decision will rekindle calls for Congress to address the possible void in health care coverage. Republicans have long argued that Act was flawed (which it is) and that it can be replaced with a more tailored and constitutional alternative. President Donald Trump has pledged the same thing. That moment may now be here.

Nothing will happen immediately and the any decision could be delayed beyond the 2020 elections.

A coalition of states, led by California Attorney General Xavier Becerra, is pledging to file for review by the Supreme Court to overturn the Fifth Circuit.

Here is the opinion: Texas v. United States