On March 2, 2020, the Supreme Court agreed to hear an appeal from Democratic state attorneys general challenging a lower court ruling that legislative changes to the Affordable Care Act’s (ACA’s) individual mandate rendered the entire law unconstitutional. In 2017, 20 Republican state attorneys general filed suit in federal District Court in Texas to overturn the entirety of the ACA.  In the Texas v. Azar case, the argument is that the Supreme Court upheld the constitutionality of the ACA’s individual coverage mandate in 2012 as a valid exercise of Congressional power, only so long as the corresponding tax penalty for noncompliance exists.  Since Congress eliminated the individual mandate tax penalty from the ACA in 2017, they argue that the underlying mandate is now unconstitutional. They further argue that the entire ACA should be overturned along with the mandate due to “lack of severability” between the law’s provisions.

The District Court sided with Republicans and ruled against ACA supporters, who then appealed the decision to the 5th Circuit Court of Appeals. On Dec. 18, 2019, the 5th Circuit agreed with the District Court that the individual mandate was unconstitutional. However, the Court of Appeals remanded the case back to the District Court to analyze which, if any, provisions of the ACA should therefore be overturned.

If the entire ACA is overturned, this would not only end the Health Insurance Exchanges, pre-existing condition protections, and Medicaid expansion, but it would also terminate programs under the non-coverage provisions ACA. These include the CMS Innovation Center and the authority to offer the CJR and other value-based care models, as well as the authority to evaluate potentially misvalued codes. It is expected that the Supreme Court will schedule the case for a hearing in the next term (Oct. 2020 – June 2021), making a final decision unlikely before 2021. – Epstein Becker & Green, P.C.

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