In a move applauded by health insurers that increasingly view the Affordable Care Act exchanges as an attractive market, the Supreme Court on June 17 ruled 7-2 to uphold the ACA in the latest in a string of high-profile legal challenges.

The case, California v. Texas, hinged on whether the ACA’s individual mandate was still constitutional after Congress in 2017 changed the tax penalty to $0 for those refusing to purchase health insurance. And if the mandate is unconstitutional, a coalition of red states argued, the rest of the law is as well because the ACA’s architects intended for that provision to be “inseverable” from the rest of the statute.

U.S. District Court Judge Reed O’Connor agreed with that argument, ruling in December 2018 that the whole ACA should fall. In a December 2019 decision, the Fifth Circuit Court of Appeals partially agreed, saying the mandate is now unconstitutional. A coalition of blue states defending the law, led by California, then appealed to the Supreme Court, which agreed to take the case and heard oral arguments in November 2020.

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