Federal Appeals Court Finds Obamacare’s Individual Mandate Unconstitutional, Sends Case Back to Lower Court

A federal appeals court on Wednesday struck down Obamacare’s individual mandate in a decision that immediately thrusts the health care law to the forefront of the 2020 elections.

However, the appeals court ruling largely ducked the central question of whether the rest of the Affordable Care Act remained valid after Congress removed the penalty for not having health insurance. The three-judge panel instead sent the case back to a Texas federal judge, who previously threw out the entire law, to reconsider how much of Obamacare could survive.

The high-stakes ruling keeps the legal threat to Obamacare alive while reducing the likelihood the Supreme Court could render a final verdict on the law before the next elections. Still, the appeals court’s decision could renew pressure on President Donald Trump and Republicans to explain how they will preserve insurance protections for preexisting conditions after failing to agree on an Obamacare replacement for years.

The latest challenge to Obamacare was brought by more than a dozen Republican-led states that argued the law is no longer constitutional after Congress jettisoned the individual mandate penalty in the 2017 Republican tax package. The mandate was originally upheld by the Supreme Court seven years ago as a legitimate use of congressional taxing power — and without that penalty, the states argued, the entire law should fall.

Democratic-led states heading Obamacare’s legal defense said they would quickly challenge Wednesday’s appeals court decision, which they said aided Trump politically.

“For now, the President got the gift he wanted — uncertainty in the healthcare system and a pathway to repeal — so that the healthcare that seniors, workers and families secured under the Affordable Care Act can be yanked from under them,” said California Attorney General Xavier Becerra, who’s leading the Democratic defense.

The 5th Circuit Court of Appeals said its decision to send the case back to District Court Judge Reed O’Connor was largely precipitated by the Trump administration switching legal positions in the case earlier this year. The Justice Department originally argued just the law’s individual mandate and main insurance protections should be abolished. The department, under Attorney General William Barr, earlier this year expanded its legal assault on Obamacare to argue the entire law should be found unconstitutional only in the Republican-states challenging the law.

“The rule of law demands a careful, precise explanation of whether the provisions of the ACA are affected by the unconstitutionality of the individual mandate as it exists today,” reads the 5th Circuit’s majority opinion, which was signed by the panel’s two Republican-appointed justices.

The appeals court decision was silent on whether it thought the law’s insurance protections should be struck down. The decision, issued hours after the latest Obamacare enrollment season ended, does not interrupt coverage for anyone covered through Obamacare’s insurance marketplaces or Medicaid expansion.

Judge Carolyn Dineen King, a President Jimmy Carter appointee, in a dissenting opinion wrote that Congress already made clear it wanted the rest of Obamacare to stand, and she criticized the majority for sending the case back to lower court.

That action “will unnecessarily prolong this litigation and the concomitant uncertainty over the future of the healthcare sector,” King wrote.

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SOURCE: Politico – Paul Demko, Susannah Luthi and Adam Cancryn

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