5th Circuit Court of Appeals sends ACA case back to district court

Posted on: 1/10/20

On Dec. 18, a federal appeals court ruled the Affordable Care Act’s individual mandate is unconstitutional, but it did not invalidate the entire law. The 5th Circuit Court of Appeals sent the case, Texas v. Azar, back to the district court in Texas to decide if any of the other provisions could exist without the mandate.

In a statement, AHA President and CEO Rick Pollack said, “Because of the Affordable Care Act, 20 million people have health insurance, millions with pre-existing conditions have access to the care they need and new and innovative models of care have been launched. This wrong-headed decision puts all of that and more in jeopardy. America’s hospitals and health systems are disappointed that the court has declined to rule on which parts of the ACA can remain. Sending the decision back to the federal district court that invalidated the entire law puts health coverage – and peace of mind – for millions of Americans at risk. We will continue to support and work for protecting patient care and coverage.”

The U.S. Supreme Court is being asked to immediately review the decision by the 5th Circuit. The California Attorney General, along with 20 other AGs, filed a petition on Jan. 3 requesting the Court’s review of the 5th Circuit decision. This filling has started the clock running for amicus brief deadlines. It is possible the briefs could be due as early as Jan. 15.

As you may recall, OHA joined 26 other state hospital associations in a group-amicus brief in the 5th Circuit Court of Appeals. OHA will be joining what appears to be at least 34 other states in appeal to the U.S. Supreme Court. Participation reinforces the importance to the Supreme Court of accepting the case. Strong state association involvement from across the country, in addition to national association participation, sends a strong message.   

Q. What is the Texas v. Azar case about?

A: In a previous case, NFIB v. Sebelius, the U.S. Supreme Court held that the individual mandate was constitutional because it essentially functioned as a tax. But with the penalty zeroed out, a group of states led by the Texas attorney general sued. The plaintiffs argued that, in light of the zeroing out of the penalty, the mandate can no longer be upheld as a tax and, therefore, the entire ACA must fall. A Texas trial court agreed, and a group of states led by California appealed to the 5th Circuit to defend the ACA.

Q: What did the 5th Circuit hold?

A: The 5th Circuit agreed with Texas that the individual mandate was unconstitutional. But it held that the trial court’s ruling striking down the entire law might not be appropriate. When a provision of a law is determined unconstitutional, not all of the law is necessarily invalid and courts must assess whether the remaining provisions can be separated, or “severed.” The 5th Circuit held that the district court’s analysis of whether the other provisions need to be severed was insufficient and that a “careful, granular approach” was required.

The 5th Circuit also directed the trial court to consider the federal government’s argument – raised for the first time on appeal – that any remedy should apply only to the plaintiffs that brought the case or only to the ACA provisions that harmed those plaintiffs.

Q: So what does the decision mean for the future of the ACA?

A: Nothing at all now. The trial court’s decision is stayed and the case goes back to the trial court for further consideration. The ACA remains fully in effect.

(Sandra Harrison)