ADEA State Update

Lawsuits Duel Over the Affordable Care Act

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A potential showdown in federal appellate court could be on the horizon, as dueling lawsuits seeking to overturn or affirm the Affordable Care Act (ACA) work their way through the federal court systems in Texas and Maryland.

In early September, oral arguments began in a lawsuit brought by 20 Republican state attorneys general attempting to overturn the ACA. The plaintiffs, led by Texas Attorney General Ken Paxton, have argued that the ACA is no longer valid because Congress removed the individual mandate penalty in December. This argument is based largely on the opinion of Chief Justice John Roberts, who reasoned in upholding the ACA that the individual mandate penalty was a tax, and Congress was therefore within its rights to create the law because it has the power to tax. Some legal experts, however, have stated that the argument brought by the Republican attorneys general is a stretch because the law includes a severability clause, meaning that if one part of the law is held unconstitutional, the rest of the law is still valid. The case may have life, however, as it is being heard in the Dallas-Fort Worth area by U.S. District Judge Reed O’Connor, who has a history of ruling against the ACA.

While the U.S. Department of Justice typically defends lawsuits seeking to overturn federal law, the Trump Administration has filed a brief in support of the suit, leaving the defense to a coalition of 17 other state attorneys general, led by California’s Xavier Becerra, J.D. California Attorney General Becerra and his coalition argue that the individual mandate does not violate the constitution without a financial penalty and maintain that the law’s severability clause would mean the rest of the law is valid regardless of whether or not the individual mandate is revoked. The defense has also stated that eliminating the law would end popular provisions of the law, such as protections for those with pre-existing conditions. President Trump, however, has declared that rules on pre-existing conditions are safe, but it is not clear if that would be the outcome if the law is invalidated.

In Maryland, the state’s Democratic Attorney General, Brian Frosh, J.D., has filed a separate suit in a more liberal federal court, seeking to uphold the constitutionality of the ACA. Maryland’s filing supports the arguments of Attorney General Becerra’s coalition, contending that lowering the penalty to zero does not actually remove the tax, and even if the court rules that it does, the entire law cannot be found unconstitutional because of the severability clause.

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