Texas v. U.S.: 5th Circuit Holds Individual Mandate is Unconstitutional, but Remands to District Court to Decide Severability

Posted by and on December 19, 2019

In a 2-1 decision published on December 18, 2019, a 5th Circuit panel upheld the Texas District Court’s decision ruling that the ACA individual mandate tax which, since January 2019, has had no monetary consequence, is unconstitutional. Citing the Supreme Court’s 2012 NFIB v. Sebelius opinion, the panel explained that the key feature of the individual mandate –the critical tax attributes that once saved the mandate from unconstitutionality- no longer exist, and therefore it can no longer be classed under Congress’ taxing power. Despite definitively ruling on this key issue, the panel remanded the case to the District Court to take a closer look at whether the individual mandate’s unconstitutionality is severable, or whether the entire ACA now must be struck down.

The dissenting judge on the panel agreed that the individual mandate was rendered unconstitutional after the penalty was removed, but disagreed that the case should be remanded to the lower court to decide whether the rest of the ACA must fall, pointing to Congress’ deliberate decision not to repeal the entire ACA when it removed the monetary penalty. The dissenting judge criticized the majority for unnecessarily prolonging the case when the remaining severability issue could have been decided by the appellate panel itself.

The decision comes down at a curious time when the public debate over the ACA appears to have moved on from whether the ACA has gone too far, to whether it has gone far enough. After it became clear over the past few years that parts of the ACA, such as the prohibitions against preexisting condition limitations and lifetime benefit maximums, are quite popular with voters, the conservative drumbeat regarding the imperative to repeal the ACA entirely has died down considerably.  In the wake of the uncertainty surrounding the country’s healthcare laws, progressive calls for even broader mandated health care coverage than the ACA provides, such as “Medicare for All,” have intensified.

View the Opinion here: http://www.ca5.uscourts.gov/opinions/pub/19/19-10011-CV0.pdf

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