Healio Special Report: Health Care and Politics

Healio Special Report: Health Care and Politics

December 17, 2018
7 min read

States promise appeal after ACA ruled unconstitutional

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Leaders from several states vowed appeals to stave off the consequences to health care after a district judge from Texas ruled that when Congress eliminated the penalty for not buying health insurance, the individual mandate was no longer constitutional under Congress' taxation powers, The Los Angeles Times reported.

CMS administrator Seema Verna said though the decision renders the Affordable Care Act unconstitutional, “pending the appeal process, the law remains in place” in a tweet shortly after U.S. District Court Judge Reed O’Connor’s decision was announced on Friday.

The judge’s decision left many medical societies concerned about the health care of Americans in the future, and some societies questioned the judge’s reasoning that led to the decision.

The Texas case stemmed from a lawsuit that representatives from nearly 20 states had filed against the U.S. government, HHS, the Internal Revenue Service (IRS) and several others, claiming that Congressional action that lowered the tax on those who did not comply with the individual mandate to buy insurance voids the ACA.

The AMA called the Texas judge's ruling “fatally flawed” and said it had the hallmarks of “judicial activism.”

“A law need not raise ‘some revenue’ to qualify as a tax under Congress’s taxing power. All that is required is that the authority to tax be preserved, even if no revenue is actually raised. That is precisely what Congress did when it amended [the tax law]. By keeping the minimum coverage requirement and its provisions imposing a tax, but only reducing the amount of that tax to $0, Congress preserved the statutory power to tax,” the AMA said in a statement.

Leaders from several states vowed appeals to stave off the consequences to health care after a district judge from Texas ruled that when Congress eliminated the penalty for not buying health insurance, the individual mandate was no longer constitutional under Congress' taxation powers, The Los Angeles Times reported.

“Congress … left the ACA otherwise unchanged. Congress thus already decided that the remainder of the law’s previsions the protections for people with pre-existing conditions, the Medicaid expansion and the rest of the law should continue to be enforced as they were before the Tax Cut and Jobs Act of 2017 was enacted,” the AMA continued.

Robert Greenwald, JD, faculty director of the Center for Health Law and Policy Innovation at Harvard Law School, also pointed to the relevant congressional actions of 2017.

"Judge O'Connor's decision is a judicial overreach. It is not sound reasoning for the judge to conclude that abolishing the ACA was Congress’ intent when it reduced the individual mandate tax to $0," he said in an interview.

The American Public Health Association (APHA) also questioned the legality of O’Connor’s decision.

“The case was politically motivated and wrongly decided on ideological grounds, not firm legal ground. It cannot stand,” APHA Executive Director Georges C. Benjamin, MD, said in a statement.

The case is widely assumed to be appealed, the first step of which would take it to the 5th Circuit Court of Appeals.

Even those who opposed the ACA questioned the validity of O’Connor’s ruling.

Sen. Susan Collins (R-Maine), who voted against the ACA’s passage in 2009, called the ruling “far too sweeping” and predicted it would be “overturned on appeal,” in an interview on CNN.

Greenwald told Healio Family Medicine he doubted the case would make it to the Supreme Court.

“The defendants have indicated that they will appeal this decision as quickly as possible. The opinion has numerous legal weaknesses that will keep it from getting very far,” he said.

“To start, the judge incorrectly determined that the plaintiffs’ have standing to sue. In order to have standing, the plaintiffs must establish that they have sustained or will sustain direct injury or harm from the provision of the law in question and that the harm is resolvable by a favorable decision. Since there is no penalty for failing to apply for health insurance coverage under the ACA there is no harm to the plaintiffs and, therefore, they do not have standing to sue,” Greenwald added.

On the merits of the case, the judge was also wrong to find that the individual mandate is so essential to and inseverable from the entire ACA that the entire law must be declared invalid.  Given these flaws in the Judge’s ruling I would be extremely surprised if the decision is upheld on appeal. Even if that were the case, I find it unlikely that a majority of the Supreme Court would uphold this decision,” Greenwald continued.

Should the case proceed to the Supreme Court, it would be the third time that court will have heard arguments related to the ACA. In the two previous cases in 2012 and 2015 the ACA was upheld.

However, one potentially critical difference between now and those previous cases is the death of conservative Antonin Scalia and retirement of sometimes swing voter Anthony Kennedy.

Their replacements, Neil Gorsuch and Scott Kavanaugh, were both nominated by President Donald J. Trump. The new justices’ impact on the outcome of the Texas case, should it make to the Supreme Court, remains unclear.

In a previous interview looking at how Kavanaugh’s appointment could affect health care, Arthur Caplan, PhD, founding head of medical ethics at New York University School of Medicine noted that although the majority of the Supreme Court were appointed by Republican presidents, it does not necessarily mean the court will automatically rule in Trump's favor.

“Remember that all of [ACA] was appealed to the Supreme Court and in a 5-to-4 decision, John Roberts, a Republican, cast the critical vote that decided the government had the authority to control some aspects of health care,” Caplan previously told Healio Family Medicine.


Michele Goodwin, the University of California Irvine School of Law Chancellor’s professor, pointed out in an interview prior to Kavanaugh’s confirmation to the Supreme Court, he had taken a superficial look at the ACA.

“Kavanaugh’s jurisprudence is in the vein of [current Supreme Court Justice Neil] Gorsuch, but perhaps more adroit than Gorsuch. He has developed a record where on one hand he recognizes the constitutionality and legitimacy of a law such as ACA, but at the same time, he has ruled in such a way (by dissent) that would undermine the practice of the law, or undermine some of its most important provisions,” she told Healio Family Medicine.

Democrats quickly announced plans to take steps to preserve the ACA.

“When House Democrats take the gavel, the House of Representatives will move swiftly to formally intervene in the appeals process to uphold the lifesaving protections for people with pre-existing conditions and reject Republicans’ effort to destroy the Affordable Care Act,” Nancy Pelosi, (D-Calif.), widely expected to be named Speaker of the House when Democrats regain control of the house in January said in a statement.

Potential impact

The judge’s decision, if upheld on appeal, creates a dire situation, according to one expert.

“If the Affordable Care Act dies, it is a disaster for vulnerable Americans including children born with health problems and the disabled. In winning this case, the GOP has kicked millions of Americans to the medical curb,” Caplan told Healio Family Medicine.


Woman Patient Clinic 
"No one wants to go back to the days of 20% of the population uninsured and fewer patient protections, but this decision will move us in that direction," AMA president Barbara L. McAneny, MD, said in a statement.


Medical societies also expressed dismay at how O’Connor’s ruling could affect health care.

The AAFP warned about the development of a gaping hole in the current health insurance landscape if the decision is upheld.

“[We] strongly disagree with legal decisions and legislation that limit our patients’ access to health care. If this decision stands, millions of patients are at serious risk of losing the protection of affordable, meaningful health insurance,” John Cullen, MD, and AAFP president said in a statement.

The AMA’s president added the significant progress that has been made on health care during the past decade is threatened if this latest decision survives the appeal process.

“[This] decision is an unfortunate step backward for our health system that is contrary to overwhelming public sentiment to preserve pre-existing condition protections and other policies that have extended health insurance coverage to millions of Americans,” Barbara L. McAneny, MD, said. “It will destabilize health insurance coverage by rolling back federal policy to 2009. No one wants to go back to the days of 20% of the population uninsured and fewer patient protections, but this decision will move us in that direction.”

The American Cancer Society Cancer Action Network, American Diabetes Association, American Heart Association, American Lung Association and National Multiple Sclerosis Society also expressed concerns if the Texas case is upheld on appeal.

“This decision threatens to resurrect barriers to health care for people with serious illnesses … “If the ruling stands, anyone with a pre-existing condition could be charged more for health coverage or denied access to coverage altogether. Health plans would no longer be required to offer essential benefits necessary to prevent and treat a serious condition and could once again impose arbitrary annual and lifetime limits on coverage. Invalidating the law also would jeopardize the federal tax credits that make health insurance affordable for more than eight million Americans, threatening their access to critical health coverage,” the societies said in a joint statement.

The American College of Physicians (ACP) implored the president and Congress to remember the original intent of the ACA and issued a call to action while the case makes its way through the appeals process.

We urge the administration and states to continue to implement and comply with all current law patient protections even as the case makes it way to through the courts. We urge doctors and patients in the 20 states that are plaintiffs in this case to contact their Governors and state Attorneys General and ask them to withdraw from it, and for all other states to intervene and join us in asking that Judge O’Connor’s decision be overturned on appeal,” ACP president Ana María López, MD, MPH, MACP, said in a statement.

“ACP also urges President Trump and his administration to reconsider their decision not to defend current law’s patient protections. Finally, we urge Congress to intervene and make it clear that its legislative intent was, and continues to be, to preserve all of the patient protections in the ACA, notwithstanding Congress’s ill-advised decision to eliminate the tax penalty for people who do not have required coverage as part of the tax law passed earlier this year.”

For more information concerning political hot topics in health care, see Healio’s Health Care and Politics Resource Center, a compilation of the latest news stories and analysis on health care laws, proposals, regulations and policies in the United States and how they are likely to affect clinicians and patient care. Be sure to bookmark the page for future reference. – by Janel Miller

Disclosures: Healio Family Medicine was unable to determine relevant financial disclosures prior to publication.