The 5th Circuit U.S. Court of Appeals by a 2-1 vote concluded the original law's key funding mechanism known as the individual mandate - requiring most Americans to purchase health insurance or face a tax penalty - was properly eliminated by Congress and therefore the entire law could not be enforced.
The "cowardice" Bagley mentioned referred to the Court's possibly purposeful failure to perform any kind of analysis as to whether Obamacare can survive without the individual mandate - instead choosing to send the case back to the U.S. District Court with instructions to reassess the law with a "careful, granular approach".
[T] he individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. The majority, however, "feels bound to ask whether Congress would want the rest of the Affordable Care Act to remain in force".
The appeals court directed the judge "to employ a finer-toothed comb on remand and conduct a more searching inquiry into which provisions of the ACA Congress meant to be inseverable from the individual mandate". Writing for the majority, the judges said the law demands a "precise explanation" of any unconstitutionality that may exist in the mandate. "It may also be that some of the ACA is severable from the individual mandate, and some is not".
Judge Carolyn King, a Carter appointee, dissented, saying she would hold the coverage requirement legal.
Congress stated many times unequivocally - through enacted text signed by the president - that the individual mandate is "essential" to the ACA. The court fell short of declaring the entirety of the landmark 2010 statute as unconstitutional. Not only were the plaintiff states all Republican-controlled, but the Trump administration had decided not to defend the law in federal court, effectively throwing its weight behind the notion that the entire law is unconstitutional.
"This decision reaffirms our stance that Obamacare's individual mandate is unconstitutional, yet it keeps in place protections for those with preexisting conditions", he said Wednesday in a statement. "The radical healthcare changes being proposed by the far left would strip Americans of their current coverage".
There were a few small positive nuggets for ACA supporters in the ruling. They charged that when Congress eliminated the financial penalty for not having insurance as part of its 2017 tax bill, it rendered the rest of the health law moot. It's unlikely the judge will have a ruling prior to the 2020 election, which means it will kick this question into the Supreme Court following the 2020 election.
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Senate Finance Committee Chairman Chuck Grassley (R-IA) noted in a statement that, in 2012, the Supreme Court "upheld Obamacare despite serious constitutional issues with the federal government forcing Americans to purchase a product from a private company".
But what Bagley describes as the "core of the case" was the Court's conclusion that, by zeroing out the mandate penalty, Congress imposed a "coercive command" on the American people. On one side is a Texas-led coalition of mostly Republican states and the Trump administration fighting to kill Obamacare.
With no tax in effect, the Texas lawsuit argued, the so-called "individual mandate" was unconstitutional and the entire law must fall.
The appeals court didn't go that far.
"He's going to say very substantial parts of the Affordable Care Act are invalid", said Nicholas Bagley, a professor at University of Michigan Law School.
The law also is woven more subtly into many other aspects of the health-care system, from payment formulas for hospitals and doctors to experiments meant to nudge health-care from a system that pays for the quantity of medical services to one based on the value of care patients receive.
The judges also said O'Connor must take a second look at the law after the Trump administration made new arguments late in the game that had said the law should only be struck as it applies to the states that brought the challenge.