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Supreme Court Dismisses Lawsuit Challenging Affordable Care Act

The U.S. Supreme Court issued a decision today dismissing a lawsuit challenging the Affordable Care Act’s (ACA’s) individual mandate.

The lawsuit, brought by individual plaintiffs and 18 Republican-led states, led by Texas, argued that the ACA’s individual mandate was unconstitutional and that the entire ACA had to be dismantled as a result. The court’s decision was made on procedural grounds and did not rule on the underlying merits of the case, leaving open the possibility for future legal challenges.

In a statement, America’s Essential Hospitals hailed the decision as a victory for patients and access to care.

Supreme Court Decision

Justice Stephen Breyer and six other Supreme Court justices held that the plaintiffs challenging the constitutionality of the ACA’s individual mandate—the requirement that most Americans sign up for minimum essential health insurance coverage—did not have legal standing. Specifically, these plaintiffs were not able to show they had suffered any past or future harm as a result of the individual mandate. The seven justices did not rule on the constitutionality of the individual mandate or its severability from the ACA.

Justices Samuel Alito and Neil Gorsuch filed a dissenting opinion, arguing the plaintiffs do have standing, the mandate is unconstitutional, and the other provisions of the ACA, which are closely linked to the mandate, are also unenforceable.

Background and Lower Court Decisions

Congress in 2017 reduced the tax penalty associated with the individual mandate to zero but did not eliminate the mandate altogether. A group of Republican-led states filed suit to challenge the constitutionality of the individual mandate, arguing it no longer falls under Congress’ taxing power without a tax penalty.

In 2018, the U.S. District Court for the Northern District of Texas agreed with this argument, deeming the individual mandate unconstitutional. The judge also ruled that the individual mandate is inseverable from the rest of the ACA, rendering the entire law unconstitutional.

The case was appealed to the U.S. Court of Appeals for the Fifth Circuit. In a December 2019 decision, the Court of Appeals agreed with the District Court that the individual mandate is unlawful but declined to rule on the mandate’s severability from the rest of the ACA, leaving the fate of the law unclear.

The Court of Appeals sent the case back to the District Court to review more thoroughly which parts of the ACA could survive without the mandate. In response to the decision, the Democratic-led states filed a petition asking the Supreme Court to review the case and dismiss the Court of Appeals’ ruling. In March 2020, the Supreme Court agreed to hear the case and held oral arguments in November.

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

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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