Affordable Care Act Tax Penalty Faces Supreme Court Scrutiny

WASHINGTON (CN) — Focused on the individual mandate tax penalty that Congress zeroed out two years ago, the Supreme Court took up a new challenge Monday to the federal health care law.

The Patient Protection and Affordable Care Act famously was passed with a provision known as the individual mandate, stipulating that those who did not obtain health insurance for themselves would have to pay a penalty on their taxes.

Supporters of the Affordable Care Act protest during a 2018 rally at Burnett Park in Fort Worth, Texas. (Max Faulkner/Star-Telegram via AP)

After Congress eliminated the penalty in the 2017 tax cuts, however, Texas led a group of red states in a constitutional challenge.

They prevailed in 2018 with a federal judge ruling that the entirety of the Affordable Care Act must fall without the individual-mandate penalty. Though the Fifth Circuit affirmed in part — agreeing that the individual mandate was unconstitutional without the tax — it did not strike down the full law.

The case is headed back to the federal district court for further proceedings, but before then states on both sides of the issue petitioned the Supreme Court to weigh in.

“The panel majority’s flawed approach to severability, coupled with its mistaken analysis of standing and the merits, casts doubt on the fate of a landmark statute on which millions of Americans depend,” California wrote with other states defending the law. “The questions presented by this petition are purely legal, of enormous practical importance and fully ripe for review by this court.”

With the Trump administration backing the law’s state challengers, the Democrat-led House of Representatives joined with the group of liberal states to defend the signature legislative achievement of the Obama administration.

In response to the order granting certiorari, Speaker of the House Nancy Pelosi blasted the Trump administration and championed the law better known as Obamacare as “an essential pillar of health and financial security for American families.”

“The sooner the GOP’s dangerous anti-health care lawsuit is ended, the better,” Pelosi said in a statement. “Every day, the Affordable Care Act provides lifesaving protections and coverage for families across America. Democrats will continue to fight in the courts and the Congress to defend and strengthen the Affordable Care Act and lower health costs for all Americans.”

Representatives for the Justice Department declined to comment on Monday’s grant.

The Supreme Court has twice upheld key provisions of the law, including one 2012 ruling that found the individual mandate constitutional. Though a ruling is not expected before the November elections, the case comes with significant political implications as health care has been a central theme of the Democratic primary.

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