US DOJ calls for Affordable Care Act to be struck down

The government said that the enactment of the Tax Cuts and Jobs Act renders the Affordable Care Act unconstitutional

US DOJ calls for Affordable Care Act to be struck down

The US Department of Justice (DOJ) has called for the Patient Protection and Affordable Care Act (ACA) to be struck down, according to the American Bar Association Journal.

In a brief filed with the US Supreme Court on 25 June, the government said the enactment of the Tax Cuts and Jobs Act (TCJA) in December 2017 by Congress has rendered the ACA unconstitutional since the tax penalty for not carrying health insurance has been dropped.

The ACA, which was signed into law in 2010 by then-President Barack Obama, had stipulated a “[r]equirement to maintain minimum essential coverage” for individuals. The act “established a framework of economic regulations and incentives that restructured the health-insurance and healthcare industries,” the DOJ said.

The act had “guaranteed-issue provisions” that prevented health insurers from denying coverage to an individual due to pre-existing medical conditions or history. It also contained “community-rating provisions” that barred insurers from charging higher premiums based on risk profile. Other provisions in the ACA expanded the Medicaid program, made changes to the Medicare program and imposed anti-fraud criteria.

Those who did not comply with the act were set to face a penalty—called a shared-responsibility payment—that was “calculated as a percentage of household income, subject to a floor based on a specified dollar amount and a ceiling based on the average annual premium the individual would have to pay for qualifying private health insurance,” the brief said.

In 2012, the Supreme Court had determined that the ACA “could be construed as an exercise of Congress’s taxing power to save the mandate from unconstitutionality” and “reasonably characterised” the attached penalty as a tax permitted by the Constitution, the DOJ said.

However, the TCJA cut down the tax penalty to zero beginning 1 January 2019, effectively eliminating shared-responsibility payment. This caused a number of states, including Texas, to challenge the enforceability of the health insurance requirement in the ACA, given that its constitutionality had been predicated on its ability to generate tax revenue.

In calling into question the constitutionality of one of the act’s provisions, the DOJ argued that the rest of the act could not be enforced.

“Even though the guaranteed-issue and community-rating provisions are constitutionally valid when standing on their own, it is evident that Congress would not ‘have wanted’ them to stand without the individual mandate,” the DOJ said, referring to the requirement for health insurance.

Last December, the 5th US Circuit Court of Appeals at New Orleans had ruled to strike down the mandate in question. The New York Times reported that oral arguments before the Supreme Court are likely to be made in the fall.

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