Judge Reed O’Connor, a United States (U.S.) District Judge for the Northern District of Texas appointed by former President George W. Bush, ruled that Obamacare, officially called the Affordable Care Act (ACA), violated the Constitution. Judge O’Connor agreed with a coalition of twenty states that a change in tax law last year eliminating a penalty for not having health insurance invalidated the entire Obamacare law. The law, however, will remain in place to allow appeals process to play out, and the Supreme Court might eventually rule on the case. Shares of U.S. health insurers, hospitals, and healthcare companies fell on Monday, following the ruling.
Obamacare mandates that all individuals have health insurance or pay a tax and also includes payments worth billions of dollars to health insurers to subsidize for low-income Americans. Twenty Republican state Attorneys General brought the lawsuit, Texas v. Azar, asking the court to rule that the Affordable Care Act (ACA) violates the Constitution after Republicans managed to zero out Obamacare’s individual mandate penalty with the Tax Cuts and Jobs Act last year. The judge ruled that the law’s individual mandate violates the Constitution and therefore the entire ACA violates the Constitution.
Judge O’Connor acknowledged that healthcare is a “politically charged affair — inflaming emotions and testing civility,” adding that the courts “are not tasked with, nor are they suited to, policymaking.” Judge O’Connor said that because the individual mandate is “essential” to the rest of the ACA, all of Obamacare is invalid. He wrote, “Congress stated many times unequivocally — through enacted text signed by the president — that the individual mandate is ‘essential’ to the ACA. And this essentiality, the ACA’s text makes clear, means the mandate must work ‘together with the other provisions’ for the Act to function as intended.”
The ruling comes one day ahead of when Obamacare’s marketplaces will close for most of the country’s open enrollment period. Approximately 11.8 million consumers nationwide enrolled in 2018 Obamacare plans and the newest enrollment numbers are down 20 percent.