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ACA Ruled Unconstitutional

WHAT HAPPENED?

On December 14, 2018, a U.S. federal district court judge in Texas ruled that the ACA was unconstitutional, overturning Obamacare.


SUMMARY OF COURT ACTION

In 2012, the U.S. Supreme Court ruled that the ACA was constitutional based on the idea that the Individual Mandate that penalized people for not buying health care coverage was a tax. Congress does not have the power to force individuals to buy insurance, but it can tax them if they do not.


The Tax Cuts and Jobs Act of 2017 reduced the Individual Mandate tax penalty to $0, effectively removing the tax. The Texas federal court ruled that without the tax the Individual Mandate is no longer a valid expression of Congressional power and is not enforceable. Because the Individual Mandate is inseparably linked to the rest of the ACA, the rest of the ACA becomes unconstitutional as well.


WHAT'S NEXT

The full effect of the decision is not yet known. In the event of an appeal, the ACA could be temporarily reinstated while an appeals court considers the matter.


We will continue to monitor this situation and provide ongoing updates as more information becomes available.

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