Texas v. Azar

What is the Texas v. Azar/U.S. lawsuit?

Texas v. Azar, also known as Texas v. U.S., is a lawsuit that was filed by 20 GOP-led states in early 2018, seeking to overturn the Affordable Care Act. Two states — Wisconsin and Maine — have since withdrawn from the suit after Democratic governors took office, but 18 GOP-led states continue to challenge the ACA in this case.

The case was filed soon after the Tax Cuts and Jobs Act reduced the ACA’s individual mandate penalty/tax to $0 (that provision took effect in 2019, but it was enacted in late 2017). The plaintiffs’ argument in Texas v. Azar hinges on the Supreme Court’s ruling in 2012 that the ACA’s individual mandate was constitutional because it was enforced with a tax and thus allowed under the federal government’s powers of taxation.

Without that tax, the plaintiffs in Texas v. Azar argue that the individual mandate is not constitutional after all. And they also argue that the mandate is not severable from the rest of the ACA, meaning that the entire law should be overturned. Legal scholars have called this interpretation “absurd,” but a federal judge sided with the plaintiffs in late 2018, ruling that the ACA should be overturned.

The case was appealed, and the U.S. Department of Justice initially supported the appeal (as is typical when a federal law is being challenged; the Department of Justice typically defends federal statute). But the DOJ’s position changed over time: By March 2019, the federal government agreed with the plaintiff states that the entire ACA should be overturned, and later argued that some ACA provisions should be allowed to survive (but not the law’s protections for people with pre-existing conditions). During the oral arguments in the 5th Circuit Court of Appeals, the federal government called for the ACA to only be overturned in the plaintiff states.

The defense of the ACA in Texas v. Azar has been led by attorneys general from Democratic-led states, since the federal government, led by the Trump administration, has mostly declined to defend the ACA.

Oral arguments were heard in the 5th Circuit Court of Appeals in July 2019, and a ruling was issued in December 2019. But the ruling amounted to a delay: The panel of judges agreed with the lower court that the ACA’s individual mandate is unconstitutional, but they sent the case back to the lower court for a specific list of the ACA provisions that should thus be overturned (the lower court had previously ruled that the entire ACA should be overturned).

This delay causes additional uncertainty for insurers and consumers in the individual market, and potentially pushes the case out past the 2020 elections. A group of Democratic-led states and the U.S. House of Representatives asked the Supreme Court to step in and hear the case in the 2020 term, without waiting for an update from the lower court regarding the portions of the ACA that should be overturned.

The Supreme Court declined that request, but later agreed to hear the case before it would otherwise have made its way there — the case (19-840) is on the Court’s order list as of March 2020. But the expectation is that the Court will hear the case during the term that begins in October 2020, which means a decision is likely to come after the 2020 elections.

Although the ACA was upheld by the Supreme Court in 2012, the makeup of the Court is different now, and it includes two Trump appointees. Legal observers expect that Chief Justice John Roberts will join with the more liberal justices in upholding the ACA, but a lot remains to be seen about the case.

Ironically, some of the plaintiff states have been working to implement laws and regulations to protect their citizens from a potential overturn of the ACA — despite the fact that they’re simultaneously working to overturn the ACA. But without the ACA’s federal funding, including funding for premium subsidies and Medicaid expansion, few states would be able to replicate the ACA’s level of coverage and affordability.

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