California v. Texas,
945 F.3d 355(5th Cir. 2019),
cert. granted, 140 S. Ct. 1262 (2020).
Texas v. California,
945 F.3d 355 (5th Cir. 2019),
cert. granted, 140 S. Ct. 1262 (2020).
Oral argument scheduled for November 10.
Issues: (1) Whether the Affordable Care Act's minimum coverage provision is unconstitutional now that Congress dropped the penalty for not securing ACA-compliant coverage to zero; and (2) if that provision is unconstitutional, whether that provision is severable from the rest of the ACA or renders the entire ACA invalid.
Ten years after the enactment of the Patient Protection and Affordable Care Act (ACA), the Supreme Court will consider the most expansive legal challenge to the law so far. The consolidated case stems from the Supreme Court’s NFIB v. Sebelius decision, which held that the ACA’s individual mandate was constitutional as a valid exercise of Congress’s Taxing Power. See NFIB v. Sebelius, 567 U.S. 519, 569-70 (2012). The individual mandate required most Americans to have a basic level of health insurance coverage or pay a tax penalty.
In 2017, Congress passed the Tax Cuts and Jobs Act of 2017 (TCJA). Among other things, the TCJA amended the tax code by reducing the tax penalty for failing to comply with the individual mandate to zero. Two months later, a group of states led by Texas and two individuals filed a lawsuit asking a Texas federal district court to declare the ACA unconstitutional. Texas v. United States, 340 F. Supp. 3d 579 (N.D. Tex. 2018). They argued that when Congress zeroed-out the tax penalty, it made the ACA’s individual mandate provision unconstitutional because it was no longer enforceable as a tax. Id. at 596. They also argued that if the provision were unconstitutional, then the rest of the ACA would be invalid because the remaining provisions relied on the mandate. Id. at 605.
The Department of Justice (DOJ) did not fully defend the law, prompting several states, led by California, to intervene and defend it. Recognizing the importance of this case, more than 30 organizations and individuals also filed amicus briefs supporting the law, including AARP and AARP Foundation. See Brief for AARP and AARP Foundation In Opposition To Plaintiffs’ Application For A Preliminary Injunction, Texas v. U.S., 340 F. Supp. 3d 579 (N.D. Tex. 2018) (No. 4:18-cv-00167-O).
In December 2018, the federal district court for the Northern District of Texas held that the entire ACA is invalid. See Texas, 340 F. Supp. 3d at 613-14. The Court reasoned that the zeroing-out of the tax penalty renders the individual mandate unconstitutional and that the rest of the ACA is not severable from that provision. Id. at 596, 615. The district court’s ruling was put on hold pending appeal. Texas v. United States, 352 F. Supp. 3d 665 (N.D. Tex. 2018).
In a 2-1 decision, the U.S. Court of Appeals for the Fifth Circuit held that the individual mandate is unconstitutional. See Texas v. United States, 945 F.3d 355, 369 (5th Cir. 2019). However, instead of determining what this meant for the rest of the law, the court sent the case back to the district court for additional analysis on which provisions could remain without the mandate. Id. Recognizing that the analysis could take years, several states, led by California sought Supreme Court review. AARP and AARP Foundation again filed an amicus brief explaining that invalidating the law would harm all Americans, including older adults.
WHAT’S AT STAKE
The importance of this case cannot be overstated. With its broad reach, the ACA is a lifeline for millions of Americans, including older adults who rely on it for their health and financial stability. Since its enactment, the ACA has become an integral part of the nation’s health care system. Among other things, it expands access to quality affordable care, guarantees coverage for people with preexisting conditions, and limits how much insurers can charge older adults. It strengthens the financial viability of Medicare, lowers Medicare prescription drug costs, and expands Medicaid eligibility. It also helps protect nursing facility residents from fraud and abuse and protects the ability of older adults to live independently.
Moreover, the ACA has withstood the test of time and continues to operate as Congress intended, even with the zeroed-out penalty. It has been a crucial source of stability during the COVID-19 pandemic. Because of the ACA, 20 million more people had health insurance when the pandemic hit. In addition, millions of people who lost their jobs and employer-based health insurance became eligible to obtain insurance on the ACA marketplaces.
If the Supreme Court finds that the ACA is invalid, millions of older adults will lose life-saving health care coverage and consumer protections they have relied on for years. It will also throw the Medicare and Medicaid programs into fiscal and administrative chaos, disrupting the nation’s health care system and economy. Finally, it will destroy hard-fought gains, such as meaningful choice for older adults to age in place and protections for nursing facility residents and the lowest income seniors who rely on Medicaid.
This would be a disaster at any time, but even worse now in the midst of a pandemic. The Supreme Court will have the final word on the ACA’s survival in the upcoming term.