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Federal Court Will Hear Challenge to Constitutionality of Obamacare

July 2, 2019

The U.S. Supreme Court found the ACA, known as Obamacare, was constitutional under Congress’ taxing power.

Texas Attorney General Ken Paxton and attorneys general from 16 other states are calling on the U.S. Fifth Circuit Court of Appeals to uphold a U.S. District Court decision declaring the Affordable Care Act (ACA) unconstitutional.

The U.S. Supreme Court found the ACA, known as Obamacare, was constitutional under Congress’ taxing power because it imposed a monetary penalty on individuals who did not have the required health insurance. However, the Tax Cuts & Jobs Act repealed the individual mandate in 2017.

“Congress meant for the individual mandate to be the centerpiece of Obamacare,” Paxton said in a May 1 statement. “Without the constitutional justification for the centerpiece, the law must go down.”

Paxton and Wisconsin Attorney General Brad Schimmel led a coalition of states that sued in federal court in 2018 to have the law overturned.  

‘Failed Social Experiment’

“Obamacare is a failed social experiment,” Paxton said in the press statement. “The sooner it is invalidated, the better, so each state can decide what type of health care system it wants and how best to provide for those with preexisting conditions, which is federalism as the Founders intended.”

Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas found for the plaintiffs and issued a final judgment in December 2018 in the case of Texas v. United States of America, but he stayed the effect of his ruling pending appeals.

The U.S. Justice Department asked the Fifth Circuit Court to affirm the lower court’s ruling and invalidate all of Obamacare on March 26. A three-judge panel of the U.S. Fifth Circuit in New Orleans will hear oral arguments in the case of Texas v. United States of America on July 9, the court’s calendar states.

States joining Texas in the appeals brief are Alabama, Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Utah, and West Virginia. After a change in state officials following the November 6, 2018 general election, Wisconsin is no longer a party to the suit. California is leading a coalition of 21 states opposing the challenge to Obamacare.

Calls for Congressional Action

Litigation aside, legislation will be required to improve the nation's health care system, says Marie Fishpaw, director of domestic policy studies at The Heritage Foundation.

“This court case is a good reminder that—regardless of whatever happens in the courts—Congress will need to return to health reform in order to provide a framework that can result in lower health care costs and better choices for all U.S. patients, including those with preexisting conditions,” Fishpaw said.

‘Unconstitutional ... Policy Failure’

In addition to the states, people who were harmed by the ACA are parties to the suit, Robert Henneke, general counsel and director of the Center for the American Future at the Texas Public Policy Foundation, who represented them, told Budget & Tax News.

“My clients, the individual plaintiffs, have directly suffered from Obamacare,” Henneke said. “Not only have their premiums skyrocketed for an insurance product they do not want, but they’ve also suffered the loss of their preferred doctors and [from] rationing of health care. Not only is Obamacare unconstitutional, but it’s also proven to be a policy failure,” Henneke said.

The Fifth Circuit Court is expected to hand down a decision by the end of this year. The losing side can be expected to appeal that ruling, which could set up another showdown over the fate of the ACA in the U.S. Supreme Court.

Bonner R. Cohen, Ph.D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

Official Connection

Texas Attorney General Ken Paxton (R): https://www.texasattorneygeneral.gov/

Article Tags
Regulation Taxes
Sub-topic
Taxes: Income Tax
Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org