Yesterday, the 5th Circuit U.S. Court of Appeals held that the individual mandate provision of the Affordable Care Act is unconstitutional. The court did not rule on whether the individual mandate provision could be removed from the ACA with the remainder of the law held intact. This issue of law was sent back to the district court for determination.
The ACA individual mandate requires virtually all Americans to have health coverage or pay a penalty. When it was originally implemented, the individual mandate had a penalty, or tax, associated with it. In 2017, Congress reduced the penalty amount to $0 starting in 2019.
The Appeals Court found that when Congress reduced the penalty to $0, it could no longer be categorized as a “tax.” A tax would be Congress’ only way to exercise its power to require health coverage. Without the tax, the requirement to have health coverage became a “command” which is outside of Congressional lawmaking powers.
The 5th Circuit ruling does not invalidate all of the ACA. It remands to the district court the decision on whether the individual mandate can be stripped from the ACA and the remainder of the ACA remain good law.
