A lower court judge in Texas has issued a ruling that could leadto all the Patient Protection and Affordable Care Act of 2010(PPACA), the main part of the Affordable Care Act (ACA) statutorypackage, being tossed out.

U.S. District Judge Reed O'Connor said last Friday that thePPACA provision requiring many individuals to own health coverageis now an unconstitutional requirement for people to buy healthcoverage, not a tax that complies with the U.S. Constitution.Because PPACA contains no “severability clause”—or provision thatlets the rest of PPACA survive if one part of PPACA isnullified—all of PPACA is invalid, O'Connor writes in an opinionexplaining his ruling on the case, Texas et al. v. USA (CaseNumber 4:18-cv-00167-O).

“All told, Congress stated three separate times that theindividual mandate is essential to the ACA,” O'Connor writes. “Thatis once, twice, three times and plainly. It also stated the absenceof the individual mandate would undercut its regulation of thehealth insurance market.”

The ACA package is made up of PPACA and a second law, the HealthCare and Education Reconciliation Act of 2010 (HCERA). O'Connordoes not mention HCERA in his opinion.

O'Connor refers to the “900-plus pages” of the ACA legislativetext, but in his opinion he appears to write onlyabout the ACA provisions relating directly to healthinsurance—not, for example, about the sections that relate tofunding for efforts to fight flu pandemics and subsidize trainingfor healthcare providers who work with older patients. He refers tothe non-major medical insurance provisions, collectively, as“hundreds of minor provisions.”

O'Connor was appointed to be a judge by President George W.Bush.

The U.S. Supreme Court ruled earlier that the ACA individualmandate was integral to the ACA, and that it was constitutional,because it was a tax that was protected by the federalAnti-Injunction Act.

Congress included a provision in the Tax Cuts and Jobs Act of2017 that set the individual mandate penalty at $0. Texas and otherstates sued, arguing that the elimination of the penalty hadconverted the individual mandate provision into a bare requirementto buy coverage. Texas and the other plaintiffs asked the court tothrow out all of the ACA.

The administration of President Donald Trump has asked the courtto throw out only the ACA provisions that the administration seesas being closely related to the purpose of the individual mandate,such as the ACA ban on using personal health information other thanage in insurer decisions about whether to sell coverage and the ACAban on using personal health information other than age, location,tobacco use, or wellness program participation in health coveragepricing decisions.

Timing

O'Connor issued the ruling at a time when health insurers havealready locked in benefits and prices for 2019 health coverage andare almost done with ordinary applicant enrollment for 2019coverage. The ACA individual major medical open enrollment periodstarted Nov. 1 in most of the country and is set to end tomorrow inmost of the country.

Will this really take effect now?Probably not. Bloomberg isreporting that White House officials said they expect the effectsof the ruling to be put on hold while the ruling is appealed.

Seema Verma, the administrator of the Centers for Medicare andMedicaid Services, emphasized in a tweet that the decision is stillmoving through the courts. “The exchanges are still open forbusiness, and we will continue with open enrollment,” Verma said inthe tweet. “There is no impact to current coverage or coverage in a2019 plan.”

Congress might be able to reverse the broad effects of theruling by setting the individual mandate penalty at $10, or someother value other than zero, or by adding a severability clause toPPACA.

Reactions

Matt Eyles, president of America's Health Insurance Plans(AHIP), said in a statement that he believes the district courtruling is misguided and wrong.

“This decision denies coverage to more than 100 millionAmericans, including seniors, veterans, children, people withdisabilities, hardworking Americans with low incomes, young adultson their parents' plans until age 26, and millions ofAmericans with pre-existing conditions,” Eyles said in thestatement.

Eyles said he expects the new ruling to be just thefirst step in a lengthy legal process.

“AHIP will continue to engage as this decision is appealed,”Eyles said. “Putting aside this decision, health insuranceproviders will continue to work hard to ensure the people theyserve have confidence that their coverage remains a strong andstable resource to improve their well-being and security.”

From: BenefitsPro

— With information from Tom Korosec and Kartikay Mehrotra ofBloomberg.