Texas Attorney General Ken Paxton and Wisconsin Attorney General Brad Schimel today led a 20-state coalition lawsuit against the federal government, challenging the constitutionality of the Affordable Care Act, commonly known as Obamacare. In the lawsuit, Attorney General Paxton explains that when Congress enacted President Trump’s tax overhaul, it rendered all of Obamacare unconstitutional by doing away with the tax penalty in Obamacare’s individual mandate.

“Texans have known all along that Obamacare is unlawful and a divided Supreme Court’s approval rested solely on the flimsy support of Congress’ authority to tax. Congress has now kicked that flimsy support from beneath the law,” Attorney General Paxton said. “The U.S. Supreme Court already admitted that an individual mandate without a tax penalty is unconstitutional. With no remaining legitimate basis for the law, it is time that Americans are finally free from the stranglehold of Obamacare, once and for all.”

In the earlier case against Obamacare, a majority of the U.S. Supreme Court and Obama Department of Justice were clear that the tax penalty was an essential component of the law. And when it upheld Obamacare, the Supreme Court’s majority decision stated that without the tax penalty, the mandate that individuals purchase health insurance was an unconstitutional exercise of federal power. The commerce power, Chief Justice Roberts explained, gives Congress the power to regulate commerce, and not to compel commerce, as Obamacare does.  

In its current unlawful form, Obamacare still imposes rising costs and transfers an enormous amount of regulatory power to the federal government. In Texas and 38 other states, where the federal government administers health exchanges, health insurance premiums rose an average of 105 percent from 2013 to 2017. Around 70 percent of U.S. counties present citizens with a noncompetitive situation, having only one or two health insurers.

“Through our multi-state lawsuit, we hope to effectively repeal Obamacare, which will then give President Trump and Congress an opportunity to replace that failed experiment with a plan that ensures Texans and all Americans have better choices for health coverage at more affordable prices,” Attorney General Paxton said.

The impact of Obamacare on Texas is substantial, even though Texas did not expand Medicaid or create a state exchange. One such impact is that Texas must pay the IRS, through its Medicaid managed care organizations, an additional $120 million per year solely due to Obamacare and its implementing regulations.

Texas and Wisconsin are joined in the lawsuit against Obamacare by Alabama, Arkansas, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Utah and West Virginia.

View a copy of the lawsuit (PDF).