A Quick Summary of the Recent Affordable Care Act Ruling

December 18, 2018

Last Friday, a federal judge in Texas ruled that the Affordable Care Act (ACA) was unconstitutional now that the individual mandate penalty was reduced to zero under the Tax Cuts and Jobs Act. Here’s a quick summary of what you need to know about the ruling and what it means for the current and future state of the ACA.

ACA Ruling Summary

The ruling

U.S. District Court Judge Reed O’Connor ruled that the individual coverage mandate (the part of the ACA that requires all Americans to be covered by health insurance) is unconstitutional. According to the ruling, since the mandate is “essential” to the rest of the ACA and can’t be separated, the entire ACA is unconstitutional.

The current impact

There aren’t any changes to the ACA that will go into effect immediately. Since there wasn’t an injunction on the ruling, the ACA will continue to operate in its current state as it makes its way through the court system. Even new ACA policies for 2019 coverage will become active for the time being. But, depending on what happens next, changes to the ACA could be on the horizon — meaning healthcare options for individuals could be different than they are now, and the requirements for coverage could change from their current state.

The estimated timeline

Overall, it’s predicted the recent ruling will be appealed. However, it’s likely the case will go to the U.S. Court of Appeals Fifth Circuit and then on to the Supreme Court. If they agreed to hear the case, the Supreme Court would provide a final ruling. But the process for the case to make its way through the court system and for any changes to fully take effect could take months, or even years, to complete.

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