BPCIA Survives Challenge to the Affordable Care Act at Supreme Court

Kramer Levin Naftalis & Frankel LLP

Kramer Levin Naftalis & Frankel LLP

On June 17, 2021, the Supreme Court of the United States issued its decision in California et al. v. Texas et al. (No. 19-840), upholding the Affordable Care Act (ACA). A bloc of U.S. states, led by Texas, and two individuals brought suit against federal officials, challenging the constitutionality of §5000A(a) (minimum essential coverage provision) and sought a determination that the rest of the ACA is not severable from §5000A(a) and an injunction against enforcement of the ACA. After the district court and Fifth Circuit found that plaintiffs had standing and that §5000A(a) was unconstitutional, California, along with 15 other states and the District of Columbia, intervened to defend the ACA’s constitutionality and seek further review.

The Supreme Court determined by a 7-2 vote that the plaintiffs lacked standing to challenge the ACA because they did not show a past or future injury “fairly traceable” to the defendants’ conduct in enforcing the challenged statutory provision. Defendants failed to show how their alleged injuries (increased costs to run state-operated medical insurance programs and the cost of purchasing health care) were traceable to the government’s actual or possible action in enforcing §5000A(a) and therefore lacked Article III standing.  

Though not a focus of the ACA challenge, the Biologics Price Competition and Innovation Act (BPCIA), which is Title VII, Subtitle A of the ACA, was consequently upheld. The entirety of the ACA remains lawful and continues to stand. The FDA approval and litigation pathways set forth in the BPCIA remain intact.

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