5th Circuit Rules ACA Individual Mandate Unconstitutional. Fate of Obamacare Uncertain.

A three-judge panel from the Fifth Circuit Court of Appeals in New Orleans ruled on December 18th that the “individual mandate” requirement of the Affordable Care Act (the “ACA”, aka “Obamacare”) is unconstitutional, and remanded the case back to a District Court judge to determine which parts of the ACA can stand on their own, without the individual mandate.

The ACA individual mandate, which took effect in 2014, required most U.S. citizens and legal residents to maintain health insurance or pay a penalty tax. However, the Tax Cuts and Jobs Act repealed the penalty tax beginning in 2019. The Fifth Circuit panel has now ruled that the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.

U.S. District Judge Reed O’Connor in Fort Worth, Texas, who has ruled against Obamacare multiple times, was tasked by the Fifth Circuit panel with parsing through which parts of the law can stand on their own and which must fall, because they relied upon the unconstitutional individual mandate.

Final resolution of whether former President Barack Obama’s signature health-care law lives or dies may not come now before the 2020 elections. The fight could still end up before the U.S. Supreme Court. For now, the ruling leaves intact access to health care for millions of Americans, who face the loss of coverage if the law is wiped out entirely.