States Sue Again Over ACA Constitutionality

Republican Attorneys General from 20 states sue arguing that eliminating individual mandate penalties voids the entire ACA.

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February 12, 2020

Led by the Attorneys’ General of Wisconsin and Texas, 20 Republican-led states have filed a new lawsuit claiming that repeal of the individual mandate penalty, which was part of the tax reform bill, invalidates the entire ACA.

Citing the Supreme Court’s 2012 decision that while Congress could not force people to buy insurance, it could impose a tax on those who do not, the states claim that an individual mandate without a penalty is unconstitutional. Furthermore, it guts the entire ACA since the way the law was written, if one part is struck down, the entire law goes with it. Supporters of the ACA say that since the penalty will be $0 in 2019, no one will be harmed and therefore no one has standing to sue. Furthermore, they argue that this is just a rehash of the 2012 case.

Impact on Employees and Employers

To the extent that state policymakers and other policymakers focus efforts on repealing the ACA rather than fixing it and, more importantly, tackling the larger issues of health care delivery transformation and cost control, it is merely causing more instability about the future course of policy, which makes it difficult for employers to plan their health benefits strategy and offerings.
It also makes it hard for employees and their families to be sure about their coverage in the future, particularly if they are relying on the exchanges or Medicaid expansion.

Outlook

It is unlikely that the suit will be successful though it will take some time for it to work its way through the courts.

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