NACHC staffers Susan Sumrell and Bethany Hamilton contributed to this blog post.

Fifth Circuit Court of Appeals Rules in Texas v. Azar, but what does it mean?

On December 18, 2019, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit ruled in a 2-1 decision that the Affordable Care Act’s (ACA) mandate that all Americans have health insurance is unconstitutional, but did not invalidate the entire law. The Court agreed with the District Court’s holding that the individual mandate was rendered unconstitutional when Congress zeroed out the tax penalty in the 2017 Tax Cuts and Jobs Act (TCJA). However, the plaintiffs in the case also argued that the individual mandate is inextricably linked to the ACA and therefore its nullification invalidates the entire ACA. The Court sent this question in the case back to the District Court for further analysis of whether the balance of the ACA was also rendered unconstitutional. 

What happens next?

The legal battles and a healthy degree of uncertainty continue. California’s Attorney General has indicated that it will challenge the decision and, on remand, the District Court could come to the same conclusion. Legal and policy scholars have advised it will take a long time for this case to be resolved and could still wind up in the Supreme Court. For now, the ACA is still the law of the land.

Implications for Americans and Health Centers

The ACA currently remains in place. However, if the ACA is ultimately overturned, there will be significantly detrimental and reverberating impacts on access to care for more than 20 million Americans, as well as Community Health Center organizations across the country.  

• Over 12 million could lose coverage gained through Medicaid Expansion;
• At least 8 million people would lose access to subsidies that allow them to purchase insurance on the individual marketplaces;
• Protections for people with pre-existing conditions could be lost;
• Coverage that was expanded to young adults (up to 26 years old) under their parent’s insurance policies could end; and
• Preventive care and screenings would no longer be covered.

The ACA has allowed health centers to increase capacity, expand care, and strengthen finances to improve access to health care. Overturning the ACA would place an unnecessary financial strain on health centers by eliminating key policies, such as Medicaid expansion, the Medicare PPS, and the Health Center Trust Fund. The Court’s ruling also comes as the number of people without health insurance is reported to have grown by about two million for the first time in 10 years.

While this is not the outcome many in the health care community would prefer, the ACA is still the law and this is not the final outcome in this case.

Further reading:

Continued Uncertainty As Fifth Circuit Strikes Mandate, Remands On Rest Of ACA (December 2019)

5th Circuit Appeal in the Case Challenging the ACA (June 2019)

Latest on ACA Litigation: Community Health Center Patients Are Still Covered (December 2018)