On Dec. 14, U.S. District Judge Reed O’Connor declared the Affordable Care Act (ACA) unconstitutional. The case, Texas v. Azaar, was brought earlier this year, arguing that the U.S. Supreme Court ruling of the law as consitutional relied on Congress’ power to tax, and the designation of the penalty for the individual mandate as a tax. However, Congress has since removed the penalty for the individual mandate, allowing the plaintiffs to argue that the invididual mandate is no longer constitutional.
The case presented five challenges to the law. The Trump administration, in an unusual decision, did not defend the law. That action gave rise to another case filed by the Maryland attorney general claiming the administration was not properly enforcing the law and asking for a declaratory judgement that the law was constitutional. A hearing on that case was held Dec. 19.
When Judge O’Connor released his declaratory judgment, he was responding to only one of the claims in the case. While most observers expected him to rule the individual mandate and the consumer protections unconstitutional, few expected the entire law to be found unconstitutional. While much attention has focused on the ACA’s insurance component and Medicaid expansion, the law also included a number of Medicare changes, such as the creation of Accountable Care Organizations, as well as the Biologics Price Competition and Innovation Act, which provides the framework under which the Food and Drug Administration approves biosimilars and interchangeable biologics. The Center for Medicare and Medicaid Innovation, upon which the administration is relying to develop alternative payment models, would also fall.
Read the full analysis on the McGuireWoods Consulting website.