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Court Partially Affirms ACA Lawsuit Decision

In a Dec. 18 ruling, a panel of judges from the U.S. Court of Appeals for the Fifth Circuit issued a ruling in a state-led lawsuit that could determine the future of the Affordable Care Act (ACA).

The judges reaffirmed a previous decision in the suit, Texas v. Azar, out of the U.S. District Court for the Northern District of Texas stating that the law’s individual mandate is unconstitutional without a tax penalty. In the Tax Cuts and Jobs Act of 2017, Congress eliminated the individual mandate tax penalty by reducing it to zero dollars but not eliminating the mandate altogether.

Unlike the prior ruling, the court did not come to a decision on the issue of severability, or whether the rest of the law can stand if the individual mandate is declared unconstitutional. Instead, the Court of Appeals ordered the lower court to reconsider its initial ruling of whether any parts of the law should be upheld.

It is important to note this ruling does not immediately impact ACA policies and programs. There likely will be additional legal challenges before any policy changes occur as a result of a final ruling.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Rachel Schwartz is a policy associate at America's Essential Hospitals.

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