On June 17, 2021, the Supreme Court turned back a long-standing challenge to the Affordable Care Act (ACA) by dismissing the challenge that was brought by 18 states (California v. Texas). The court ruled that the states that brought the suit over the ACA did not have the standing to do so.
On December 14, 2019, the U.S. District Court for the Fifth Circuit in Texas ruled the Affordable Care Act (ACA) unconstitutional in light of the Tax Cuts and Jobs Act of 2017, which eliminated the tax penalty under the individual mandate. The district court sided with 20 Republican state attorneys general that argued since the individual mandate was eliminated, the entire law was invalidated. The ruling went further and also ruled that all of the consumer protections under the ACA were tied to the individual mandate and they were also unconstitutional. These include the prohibition against insurers charging patients more for pre-existing conditions, allowing children to stay on their parent’s plans until age 26, and removal of caps on coverage. The case next went to the U.S. Fifth Circuit Court of Appeals, which sent the lawsuit back to the district court in Texas to reassess how much of the Affordable Care Act can stand if the individual mandate must fall. In response to the Fifth Circuit Court’s decision, a California led group petitioned the Supreme Court to have the case heard on an expedited basis. The Supreme Court refused to hear the case on an expedited schedule for the 2019–2020 term but did agree, on March 2, 2020, to hear the case during the 2020–2021 term, reviewing not only the severability factors but the standing issue raised by the Fifth Circuit. The case was consolidated under California v. Texas.
Before deciding whether the individual mandate is constitutional or severable from the rest of the Affordable Care Act in California v. Texas, the Supreme Court must first decide whether it can reach those questions. Meaning does the case show that at least one plaintiff has an injury that is fairly traceable to the mandate and likely to be redressed by a favorable court decision. In the majority opinion written by Justice Breyer, the Court stated, “We do not reach these questions of the Act’s validity, however, for Texas and the other plaintiffs in this suit lack the standing necessary to raise them. Neither the individual nor the state plaintiffs have shown that the injury they will suffer or have suffered is ‘fairly traceable’ to the ‘allegedly unlawful conduct’ of which they complain.”
Justice Breyer was joined in the majority opinion by Chief Justice Roberts, Justices Thomas, Sotomayor, Kagan, Kavanaugh, and Barrett. Dissenting were Justices Alito and Gorsuch. Today’s ruling marks the third time the Supreme Court has taken up the ACA and either upheld its constitutionality or dismissed the case.