Federal District Court Strikes Down ACA Mandate

A federal district court in Texas has ruled that the Affordable Care Act’s (ACA) individual mandate is unconstitutional. The court further found that, because the individual mandate is “essential” to the ACA, the remaining provisions of the law are also invalid.

Congress zeroed out the tax penalty appropriation, yet left in place the ACA’s individual mandate, in the federal tax reform bill in December 2017. Wisconsin, along with 18 other states, has led the lawsuit arguing that the remaining mandate, without an active tax penalty, violates the Commerce Clause of the U.S. Constitution, and Congress does not have the constitutional authority to compel citizens to purchase health insurance.

The district court did not place an immediate injunction on enforcement of the law, so there will be no immediate impact to 2019 coverage under the ACA. It is expected that the case will be appealed eventually to the U.S. Supreme Court.

The striking down of the ACA means the law’s provisions for pre-existing conditions coverage will be scrapped, if the appeals are unsuccessful. With the validity of the ACA up in the air in federal courts, the Wisconsin legislature could take action again on state-level pre-existing conditions legislation.

In the extraordinary session this month, the Senate failed to pass AB 365. The Alliance of Health Insurers and America’s Health Insurance Plans attempted to address concerns with the flawed bill which passed the Assembly. The Senate amended the bill to partially address some of the concerns. However, the bill still had flaws, including extending the ACA’s pre-existing conditions provisions to plans not subject to such conditions under the ACA (i.e. short-term, limited duration plans). Ultimately, the bill failed on the floor in a 16-17 vote. Sens. Dave Craig (R-Big Bend) and Chris Kapenga (R-Delafield) joined all Democrats in voting no.