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June 17, 2021

SCOTUS Upholds Affordable Care Act in 7-2 Ruling

On June 17, 2021, the Supreme Court issued its long-anticipated decision in California v. Texas, upholding the Affordable Care Act once again in a 7-2 ruling. The Court did not reach the merits of whether the now $0 individual mandate penalty rendered the law unconstitutional, instead ruling that the plaintiffs had not demonstrated the requisite injury to satisfy standing to sue. The suit began in 2018 with a group of Republican-led states challenging whether the ACA’s individual mandate was constitutional after Congress zeroed out the monetary penalty for individuals who failed to obtain insurance coverage. The case was filed in the U.S. District Court for the Northern District of Texas, which sided with the plaintiffs holding that the individual mandate is unconstitutional, and the provision is not severable from the rest of the law. The court stayed its judgment pending appeal to the Fifth Circuit, which upheld the lower court’s ruling on the individual mandate the following year but did not render an opinion on severability and remanded the case back to the lower court to produce a more thorough justification for striking down the entire law. The Supreme Court granted certiorari in March 2020 on petition from Democratic states who intervened in the lawsuit at the lower court in defense of the ACA. Oral arguments followed in November 2020. Notably, the Court’s ruling in California v. Texas was more decisive than earlier challenges to ACA in 2012 and 2015, each of which upheld the law on smaller margins, 5-4 and 6-3, respectively.