Texas leads multi-state Affordable Care Act lawsuit

Texas leads multi-state Affordable Care Act lawsuit

In February 2018, the attorney general of Texas, joined by attorneys general and governors from nineteen other Republican states, filed a lawsuit asking a Texas judge to invalidate the entire ACA.  

Their theory is that during a Supreme Court argument held in 2012, Congress lacked constitutional authority to enact the ACA’s individual responsibility requirement as a mandate, but upheld it as a tax. In 2017, Congress zeroed out the tax, thus, plaintiffs argue, the individual responsibility requirement now lacks any constitutional basis and is void. But, the argument continues, the individual responsibility requirement is key to all the rest of the ACA, so the entire ACA must be invalidated. In April, the plaintiff states (joined by two individual plaintiffs) asked the court to block the enforcement of the ACA and all associated regulations through a preliminary injunction. 

The relief the plaintiff states seek is breathtaking. The ACA contains ten titles reforming the entire American health care system—closing the Medicare doughnut hole, strengthening fraud and abuse enforcement, authorizing FDA approval of generic biologics, and reforming the Indian Health Service, for example. Indeed, if all ACA regulations were enjoined, the federal government would likely lose legal authority to pay Medicare providers and Medicare Advantage plans, leaving 44 million Medicare beneficiaries without health care. Throughout its ACA repeal debate in 2017, Congress never considered touching these ACA reforms, which the plaintiffs dismiss as “minor provisions.”  

The plaintiffs focus their challenge on the ACA’s individual market insurance reforms, in particular the guaranteed issue and community rating requirements. They claim that Congress in 2010 said that the individual mandate was “essential” to the operation of these provisions. But the real legal question is what Congress intended in 2017 when it zeroed out the individual mandate penalty—and it is clear that Congress did not mean to repeal the remainder of the ACA, and in particular not to re-subject individuals to preexisting condition exclusions. Moreover, the mandate is not in fact essential to an insurance market that covers all regardless of preexisting conditions.  

It is difficult to take the Texas lawsuit seriously as a legal manner. The plaintiffs have carefully picked a judge, however, who has enjoined other ACA provisions. Moreover, the Trump administration has yet to take a position on the lawsuit. On May 16, however, the court allowed seventeen Democratic attorneys general, led by California, to intervene to defend the ACA. A ruling on the preliminary injunction motion is expected by late summer. 

If the judge enjoins the entire ACA, the entire health care system will erupt in chaos. Alternatively, if he enjoins only the ACA’s individual market reforms, millions of Americans with preexisting conditions could lose coverage. Such a decision would almost certainly be reversed on appeal, but in the meantime, it would throw the individual market into confusion. This is a deeply irresponsible lawsuit. It can only be hoped that the court will see that this is a political, not a legal case, and bring it to a swift conclusion.  

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