Court Confirms Unconstitutionality of Individual Mandate

A federal appeals court panel in New Orleans has issued a ruling in a case regarding the Affordable Care Act (ACA), agreeing with a lower-court judge that the individual mandate is unconstitutional now that Congress has eliminated the tax penalty that was intended to enforce it. However, rather than rule on the accompanying question of whether and to what extent the rest of the provisions of the ACA are severable—that is, can the rest of the ACA stand if the individual mandate has been struck down?—the appeals court remanded that question back to the lower court. 

In 2012, the US Supreme Court found that the ACA’s financial penalty for not having health insurance was a constitutional expression of the power of Congress to levy taxes. Since that ruling depended on the taxation aspect of the individual mandate, after Congress in 2017 repealed the tax penalty but left the now toothless individual mandate, Texas and 19 other states filed a lawsuit challenging the constitutionality of the provision in a Federal District Court. Moreover, the plaintiffs claimed that the provisions of the ACA were so tightly wound together that if any one provision were declared unconstitutional, it would strike down the entire law. One year ago, the judge in that case declared the entire ACA unconstitutional. This week, the 5th U.S. Circuit Court of Appeals upheld the District Court’s finding that the individual mandate is unconstitutional, but remanded the case back to the District Court to clarify whether the rest of the ACA can remain in place. 

Invalidating the ACA would impact several programs of particular interest to state DD service systems. The ACA established the 1915(k) Community First Choice Program.

The ACA also made significant changes to the 1915(i) Home and Community-Based Services state plan option. Perhaps the most important of these are the provisions that eliminate the flexibility to waive statewideness but replace it with the ability to waive comparability, allowing states to use 1915 (i) to offer home and community-based services to specific, targeted populations. It was this change, too, that created the opportunity for states to create multiple (i) programs. The ACA also allowed states to serve individuals with income up to 300 percent of FPL and added “other services” to the allowed services under 1915(i). Another ACA provision brings 1915(b) and (c) waivers onto the same five-year timeline for renewal. It is unclear how Congress and the Centers for Medicare and Medicaid Services (CMS) will proceed if the statutory authorization for each of these programs or program elements is struck down. Money Follows the Person was also first reauthorized through the ACA, and while it has received several short term reauthorizations since, each of those extensions built on language added to the statute by the ACA. And, of course, Medicaid expansion would be eliminated if the ACA was invalidated.

While the Circuit Court remanded the case back to the District Court for consideration of whether striking down the individual mandate renders the rest of the law invalid, a number of State Attorneys General have issued a motion to ask the Supreme Court to weigh in on the case in an expedited fashion.

Read the ruling at