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               Research Servi






California v. Texas: The Fate of the Affordable

Care Act



October 27, 2020

On November   10, 2020, the Supreme Court is scheduled to hear oral argument in California . Texas
(consolidated with the related case Texas v. California), a constitutional challenge to the Affordable Care
Act's (ACA's) individual mandate. The suit also seeks to invalidate the ACA's many other provisions,
which cover a range of issues such as the regulation of private health insurance, changes to public health
care programs like Medicaid and Medicare, funding for preventive health care programs, drug regulation,
and nutritional content display at restaurants. This Sidebar provides background on the ACA's individual
mandate, including relevant prior litigation, followed by a discussion of the California v. Texas case,
including the parties' arguments in the case. It concludes with some select considerations for Congress.

The   ACA's Individual Mandate

Enacted in 2010, one of the ACA's central goals was to increase the number and share of Americans
who  are insured. In its original form, the ACA's major components included sweeping changes to
federal regulation of private health insurance, established income-based subsidies to facilitate the
purchase of health insurance, and substantially increased the scope of Medicaid coverage. Additionally, in
a requirement commonly referred to as the individual mandate, the law compelled certain individuals to
maintain minimum  levels of health insurance and, as originally enacted, imposed financial penalties
enforced as a tax on those who failed to comply with the requirement.
The Supreme  Court has once before considered the individual mandate's constitutionality. In 2012, the
Court addressed this issue in its landmark case, National Federation of lndependent Business (fEI) K.
Sebehius. In NFIB, several states and private litigants argued that the individual mandate exceeded
Congress's legislative authority. They further claimed the rest of the ACA was not severable from the
individual mandate and would thereby have to be invalidated in its entirety if the individual mandate was
held unconstitutional. Chief Justice Roberts, writing for himself, was joined by Justices Scalia, Kennedy,
Thomas, and Alito, writing separately, in ruling that neither Congress's authority to regulate interstate
commerce  nor its derivative authority to enact necessary laws to effectuate its enumerated powers gave
Congress authority to enact the individual mandate. These Justices collectively explained that while the
Commerce   Clause allows Congress to regulate existing commercial activity, it does not bestow Congress
with the authority to compel individuals to participate in commerce. A different group of five Justices,

                                                                  Congressional Research Service
                                                                    https://crsreports.congress. gov
                                                                                       LSB10547

CRS Legai Sidebar
Prepared for Members and
Commit tees of Congress ----------------------------------------------------------------- ----------

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