Federal Appellate Court Holds ObamaCare’s Individual Mandate Unconstitutional

Recently, the United States Court of Appeals for the Fifth Circuit held that ObamaCare’s individual mandate is unconstitutional.

As we explained earlier, the individual mandate required millions of Americans to buy and indefinitely maintain health insurance or face annual penalties.  The Supreme Court of the United States upheld the constitutionality of the individual mandate for one reason only:  The individual mandate could be viewed as a tax and it therefore could be upheld as a constitutional exercise of Congress’s power to tax because it imposed a tax penalty on people who did not purchase health insurance.  The Court was clear that no other constitutional power authorized Congress to compel Americans to buy health insurance they did not want.

In 2017, however, Congress eliminated the penalty for not purchasing health insurance.  With the elimination of the tax penalty, the individual mandate’s constitutionality was effectively negated. That is precisely what the ACLJ argued in its amicus brief, and that is what the Fifth Circuit held.  Our brief argued:

All three features that supported the [Supreme] Court’s “saving construction” of the individual mandate as a tax are now effectively nonexistent. This year, Americans were no longer required to make the shared responsibility payment with their income tax returns and were therefore not responsible for calculating their payment in accordance with such “familiar factors as taxable income, number of dependents, and joint filing status.” Because no payments have been made, no revenue will be generated. . . . And because the mandatory requirement no longer triggers a tax payment generating revenue for the government, the individual mandate is unmoored from any of Congress’s enumerated powers.

The court agreed, stating:

[T]he individual mandate—most naturally read as a command to purchase insurance—was saved from unconstitutionality because it could be read together with the shared responsibility payment as an option to purchase insurance or pay a tax. It could be read this way because the shared responsibility payment produced revenue. It no longer does so. Therefore, the most straightforward reading applies: the mandate is a command. Using that meaning, the individual mandate is unconstitutional.

While the Fifth Circuit affirmed the lower court’s ruling that the individual mandate is unconstitutional, it rejected the lower court’s decision striking down Obamacare in its entirety. The Fifth Circuit critiqued the lower court’s reasoning and sent the case back to the lower court, requiring it to reconsider whether, in light of the guidance set forth in the Fifth Circuit’s opinion, any other Obamacare provisions should be struck down.

This case is likely to remain in the lower courts for some time yet, but if the issue of the individual mandate’s constitutionality returns to the Supreme Court of the United States, the ACLJ will again fight against this raw federal power grab.