Constitutionality of the ACA

Posted by BAS - 12 November, 2020


This week the United States Supreme Court heard oral arguments which will impact the future of the Affordable Care Act. The questions to be decided by the Court are specific legal arguments and not the operation of the ACA itself. The Court will be deciding (a) if the individual mandate to purchase health insurance is not constitutional, can the rest of the ACA remain in place or does the entire ACA have to be invalidated; (b) can the individual mandate remain in place without a penalty; and (c) did the plaintiffs have standing to sue.

The ACA required virtually all Americans to maintain health insurance or pay a tax penalty. In 2017, the United States Congress reduced the amount of the tax penalty for not having health insurance to $0.

Several Republican state attorneys general along with two individuals sued saying that by making the individual mandate penalty $0, Congress was no longer exercising its right to tax and therefore the entire ACA was unconstitutional. Courts at the circuit level disagreed on this point which allowed the case to be brought to the U.S. Supreme Court. The Court is tasked with deciding if the individual mandate’s taxing provision can be “severed” from the remainder of the ACA leaving the rest of the law intact or if the entire ACA must fall since the individual mandate penalty was eliminated. The case also addresses whether the Republican attorneys general have sufficient harm to be able to bring the case at all and if the individual mandate without the tax penalty is constitutional.

It has widely been reported that the U.S. Supreme Court Justices asked questions during the arguments which seem to lean in favor of severing the individual mandate but retaining the remainder of the ACA. They also seemed to have questioned if a state attorney general would have been injured giving them the right to have standing to sue.

A decision on the case is expected in June 2021. Until then, the Affordable Care Act remains in effect and continues as usual.

Topics: Health Care Reform (ACA), Affordable Care Act, BAS News, HR & Benefits News

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