Twenty states have brought a lawsuit against the federal government challenging the constitutionality of the Affordable Care Act, now that the individual mandate has been abolished.
The Tax Cuts and Jobs Act, signed into law by President Donald Trump on Dec. 22, 2017, eliminated the tax penalty of the ACA, without eliminating the individual mandate itself, according to lawsuit filed Monday in U.S. District Court in the Northern District of Texas.
"Following the enactment of the Tax Cuts and Jobs Act of 2017, the country is left with an individual mandate to buy health insurance that lacks any constitutional basis," the lawsuit states. "Once the heart of the ACA -- the individual mandate -- is declared unconstitutional, the remainder of the ACA must also fall."
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In its current unlawful form, the ACA imposes rising costs and transfers an enormous amount of regulatory power to the federal government, according to a statement by Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel, who are leading the 20-state coalition lawsuit.
In the 39 states, where the federal government administers health exchanges, health insurance premiums rose an average of 105 percent from 2013 to 2017, they said. Around 70 percent of U.S. counties present citizens with a noncompetitive situation, having only one or two health insurers.
In the earlier case against the ACA, a majority of the U.S. Supreme Court and the Obama Department of Justice were clear that the tax penalty was an essential component of the law, they said. And when it upheld the ACA, the Supreme Court's majority decision stated that without the tax penalty, the mandate that individuals purchase health insurance was an unconstitutional exercise of federal power.
In the lawsuit, the states' attorneys general and governors gave examples of how the ACA has been a financial burden for states. One avenue for individuals to comply with the individual mandate is to apply for Medicaid, it said. Millions have enrolled in Medicaid as their only option to avoiding the individual penalty, imposing additional cost on the states.
Other cost is incurred, including, for example, in Missouri where revenue has been drained by faster-than-projected growth in healthcare expenditures, driven in part by the impact of the ACA. The state's fiscal year 2018 budget includes more than $572 million in cuts across Missouri state government and reduces the state's workforce by 188 positions.
In Texas, even though Texas did not expand Medicaid or create a state exchange, the state must pay the IRS, through its Medicaid managed care organizations, an additional $120 million per year solely due to the ACA and its implementing regulations.
"Texans have known all along that Obamacare is unlawful and a divided Supreme Court's approval rested solely on the flimsy support of Congress' authority to tax. Congress has now kicked that flimsy support from beneath the law," Paxton said by statement. "Through our multi-state lawsuit, we hope to effectively repeal Obamacare, which will then give President Trump and Congress an opportunity to replace that failed experiment with a plan that ensures Texans and all Americans have better choices for health coverage at more affordable prices."
The lawsuit was filed by the attorneys general for the states of Wisconsin, Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Missouri, Nebraska, South Carolina, South Dakota, Tennessee, Utah, West Virginia, Texas, and by the governors of Maine and Mississippi.