Daily News

View All News

Federal judge rules ACA unconstitutional, but court battle far from over

December 17, 2018

A federal district court judge late Friday ruled the Affordable Care Act to be unconstitutional. However, ACA obligations remain in place despite the court ruling as District Court Judge Reed O’Connor granted only summary judgment on the ACA’s constitutionality, without issuing a nationwide injunction against its enforcement.

Texas v. Azar changes nothing for now,” attorney Alden Bianchi of Mintz Levin said in a statement to Staffing Industry Analysts. “It’s business as usual. I would be surprised if it is upheld on appeal.”

“This case is just not a ‘now’ issue,” said Bianchi, who chairs the employee benefits and executive compensation practice at Mintz Levin. “There will be plenty of noise and hand-wringing, but it’s more about what time and effort Congress devotes to the decision early next year.”

The Society for Human Resource Management, the US association for HR professionals, reported O’Connor ruled that because Congress eliminated the penalty on individuals without ACA-compliant health coverage effective Jan. 1, 2019, the ACA’s individual mandate requiring people to have health insurance “can no longer be sustained as an exercise of Congress’s tax power.” O'Connor then struck down the ACA in full, concluding the individual mandate is so connected to the law that Congress would not have passed the ACA without it.

“The future effect of this decision, if it is upheld, may be only to invalidate the individual mandate, or it may be allowed to have greater effect by also invalidating the Act’s employer mandate, insurance provisions, taxes, and/or massive sections that regulate the healthcare industry in ways unrelated to health insurance,” wrote attorney George Reardon in a The Staffing Stream blog post.

President Trump tweeted his approval of the decision and urged Congress to pass new healthcare legislation. “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. Mitch and Nancy, get it done!”

However, Maine Republican Sen. Susan Collins predicted the Texas judge’s decision striking down Obamacare would likely be overturned.

“I think this will be overturned on appeal,” Collins said Sunday on CNN’s “State of the Union.” She added, “there’s no reason why the individual mandate provision can’t be struck down and keep all the good provisions of the Affordable Care Act.”

“While we are disappointed in the recent Northern District of Texas court's ACA ruling, we recognize that this is a first step in what will be a lengthy appeals process,” Molina Healthcare Inc. (NYSE: MOH) said in a statement. The Fortune 500 company provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces “Regardless, the ACA will remain in effect for 2019, and we are optimistic that it will remain in effect thereafter. We support efforts by Congress and the Administration to stabilize the ACA’s programs and ensure continued protection of Americans with pre-existing conditions.”