The Trump administration announced on Monday, March 25 that it would reverse its position on the ruling by a federal judge overturning the entire Affordable Care Act (ACA).
This past December, Texas federal district court judge Reed O’Connor issued an opinion in Texas v. Azar, a lawsuit challenging the constitutionality of the individual mandate and, with it, the entire ACA.
The lawsuit was originally filed in February 2018 by 20 Republican state attorneys general and governors, challenging the constitutionality of the individual mandate now that the penalty for failure to have health insurance is $0 as of the beginning of this year. The individual mandate penalty was made a zero-dollar tax under the Tax Cuts and Job Acts (TCJA), the tax reform bill enacted in December 2017.
Originally, the Department of Justice (DOJ) refused to defend the constitutionality of the ACA in the lawsuit, leaving the defense to 16 Democratic state and Washington D.C. attorneys general. The states argued that the mandate remains constitutional and, even if it is not, it is entirely severable from the ACA.
In his opinion, Judge O’Connor concluded that, because the TCJA eliminated the penalty for not complying with the individual mandate, the mandate is no longer permissible under Congress’s taxing power and is therefore unconstitutional. Because the individual mandate is ‘essential to’ and ‘inseverable from’ the ACA, the judge states, the entire law is invalid.
Judge O’Connor did not enjoin the ACA, that is all the ACA’s provisions remain in effect pending the appeal of his decision working its way up through the 5th Circuit Court of Appeals.
In the new filing with the U.S. Court of Appeals for the 5th Circuit in New Orleans, the DOJ announced that "The Department of Justice has determined that the district court's judgment should be affirmed, the United States is not urging that any portion of the district court's judgment be reversed." Announcing its intent to file a brief in support of the Republican state plaintiffs.
Most legal experts believe that the lawsuit is likely bound for the United States Supreme Court. In the meantime, HHS, DOL, and the IRS will all continue to enforce the various, current ACA requirements.