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Fifth Circuit Rules Obamacare Individual Mandate Unconstitutional

A woman reads a leaflet at a health insurance enrollment event in Cudahy, Calif., in 2014. (Lucy Nicholson/Reuters)

The Fifth Circuit Court of Appeals ruled in a 2-1 vote Wednesday that Obamacare’s individual mandate, which required Americans to buy health insurance under threat of fine, was unconstitutional.

“The individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power,” the ruling said. “On the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.”

The Supreme Court’s 2012 majority decision to uphold the ACA was largely reliant on Congress’ taxing power.

The Fifth Circuit’s Wednesday ruling affirmed Texas district judge Reed O’Connor, who ruled last December that the individual mandate was unconstitutional, and sends the case back to him to determine whether the rest of the 2010 healthcare statute must also be struck down.

“It may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded,” Judge Jennifer Walker Elrod said in her majority opinion. “It may be that all of the ACA is severable from the individual mandate. It may also be that some of the ACA is severable from the individual mandate, and some is not.”

In his 2018 ruling, O’Connor wrote that “the Individual Mandate is essential to and inseverable from the remainder of the ACA.” While still technically in effect, the mandate was effect gutted by the 2017 Republican tax package.

The Fifth Circuit said its decision to send the case back to O’Connor was largely precipitated by the Trump administration’s decision to switch legal positions in the case.

In its original argument, the Justice Department had said just the law’s individual mandate and main insurance protections should be abolished.

But this year, under Attorney General William Barr, the DOJ expanded its challenge to Obamacare by arguing the entire law should be found unconstitutional only in the states challenging the law. The constitutionality of the broader legislation remains to be adjudicated by a lower court as the fifth cicruit decision handed down Wednesday dealt narrowly with the individual mandate provision.

Texas and 17 other Republican-led states sued in 2017 after the GOP-led Congress cut the tax penalty for those who lacked insurance to zero.

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