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Compliance Corner

Healthcare Reform

Biden Administration Withdraws Support for Court Challenge to ACA

On February 10, 2021, the Department of Justice filed a letter with the US Supreme Court, in which the United States stated that it has reconsidered its position in the pending case challenging the ACA, Texas v. California. Under the Trump Administration, the United States joined several Republican-led states in challenging the ACA’s individual mandate as unconstitutional. In a previous case, the Supreme Court held that the individual mandate was constitutional because Congress exercised its power to tax when it imposed a penalty upon people who did not obtain health coverage and gave people a choice between paying the penalty and buying insurance. In 2017, Congress reduced the penalty to $0, and several Republican-led states argued that by doing so Congress took away the choice and left an unconstitutional requirement to purchase insurance. Although the United States initially joined the case in defense of the law, it switched positions during the case’s appeals.

In this letter, the Biden administration states that the United States no longer supports the argument against the individual mandate. Its new position is that the individual mandate is constitutional because Congress did not remove the choice to purchase insurance or not, but simply removed the negative consequence of choosing not to purchase insurance.

The case remains active. The Supreme Court heard oral arguments in November but it has yet to issue a ruling. Although the United States stated in its letter that it did not believe additional briefing was necessary, it is possible that the Court will ask for more from the United States.

We previously reported on this case in Compliance Corner, such as in the March 3, 2020, edition. We will keep an eye on further developments in the case and report them as they happen.

Department of Justice Letter »

View this article on NFP.com.

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