Supreme Court Upholds Affordable Care Act In Its Entirety
The most anticipated Supreme Court decision in years ended coming down in a manner that very few people expected. After two years of everyone focusing on the question of whether or not the Commerce Clause gave Congress the authority to force people to buy health insurance, the Supreme Court ended up upholding the law on completely different grounds via a very unlikely majority:
The Supreme Court on Thursday upheld the individual health-insurance mandate that is at the heart of President Obama’s landmark health-care law, saying the mandate is permissible under Congress’s taxing authority.
The potentially game-changing, election-year decision — a major victory for the White House less than five months before the November elections –will help redefine the power of the national government andaffect the health-care choices of millions of Americans.
Chief Justice John G. Roberts Jr. sided with the majority in voting to uphold the law, Obama’s signature domestic initiative.
Passage of the legislation by the Democratic-controlled Congress in 2010 capped decades of efforts to implement a national program of health care. The legislation is expected to eventually extend health-care coverage to more than 30 million Americans who currently lack it.
Republicans in Congress and GOP presidential challenger Mitt Romney have vowed to try and repeal the measure after the November elections.
The health-care issue thrust the Supreme Court into the public spotlight unlike anything since its role in the 2000 presidential election. The court’s examination of the law received massive coverage — especially during three days of oral arguments in March — and its outcome remained Washington’s most closely guarded secret.
The court reviewed four questions: whether it was within Congress’s constitutional powers to impose an “individual mandate” to purchase health insurance; whether all or any additional parts of the law must be struck down if the mandate is rejected; whether an expansion of Medicaid was unduly coercive on the states and whether all of those questions can even be reviewed before the mandate takes effect.
On the Medicaid question, the judges found that the law’s expansion of Medicaid can move forward, but not its provision that threatens states with the loss of their existing Medicaid funding if the states declined to comply with the expansion. The finding immediately raises questions as to how effectively the federal government will be able to implement the expansion of the joint federal-state insurance program for the poor.
The most crucial issue before the court was considered to be the individual mandate, known technically as the “minimum coverage” provision, because striking it down would jeopardize the ability of insurers to comply with other, more popular elements of the health-care law without drastically raising premiums. Under those other provisions, for example, insurers can no longer limit or deny benefits to children because of a preexisting condition, and young adults to up age 26 are eligible for insurance coverage under their parents’ plans.
During oral arguments in March, conservative justices indicated they were skeptical about the individual mandate, the provision in the 2,700-page health-care law that requires nearly all Americans to obtain health insurance by 2014 or pay a financial penalty.
Arguing the case for the Obama administration, Solicitor General Donald B. Verrilli Jr. defended the law as a constitutional exercise of congressional power under the charter’s commerce clause to regulate interstate commerce. He said lawmakers were regulating health insurance to deal with the problem of millions of people who lack coverage and therefore shift costs to the insured when they cannot pay for their medical care.
The court rejected the commerce clause argument, but ruled that Congress nevertheless had the power to impose the mandate because it can be considered a tax.
The fact that this was a 5-4 decision is not surprising at all, of course. The fact that it was a 5-4 decision where Chief Justice Roberts ended up breaking with his conservative colleauges and becoming the deciding vote to uphold the signature legislation of a Democratic President is very surprising. Even more surprising, though is the fact that it was the tax argument, of all things, that ended up deciding the case. If the Court had been limited to consideration of the Commerce Clause justifications for the mandate, then Roberts, who explitictly rejects the Commerce Clause arguments in his Majority Opinion, would have been the deciding vote to strike the law down.
Reviewing the oral arguments from the day that the Court considered the validity of the mandate, the honest truth is that there was very little discussion of the tax argument from either side, and little questioning about it by the Justices. This isn’t entirely surprising. The day before, the Justices had been very incredulous about the arguments that the Anti-Injunction Act barred any ruling on the Constitutional of the law until someone had been assessed the penalty for not having insurance via the Tax Code. While they didn’t necessarily reject the idea that the mandate could be characterized as a tax, it certainly didn’t seem like the argument had garnered much sympathy. Additionally, even the Courts that had upheld the mandate had, for the most part, rejected the tax argument or simply declared that it was unnecessary for them to rule on that issue because they had already determined that the mandate was a proper exercise of the Commerce Clause power. The fact that the Court, or more specifically Chief Justice Roberts, accepted this argument and chose to use it as the basis for upholding the act is surprising, and a lesson that one never really knows what the Court will do.
This result is unlikely to be a surprise to one person. All the way back on March 28, 2010, Law Professor Jack Balkin argued that the mandate was Constitutional precisely because it was a tax, and there was no need to even look at the Commerce Clause arguments:
The individual mandate, which amends the Internal Revenue Code, is not actually a mandate at all. It is a tax. It gives people a choice: they can buy health insurance or they can pay a tax roughly equal to the cost of health insurance, which is used to subsidize the government’s health care program and families who wish to purchase health insurance.
The Constitution gives Congress the power to tax and spend money for the general welfare. This tax promotes the general welfare because it makes health care more widely available and affordable. Under existing law, therefore, the tax is clearly constitutional.
The mandate is also not a “direct” tax which must be apportioned among the states by population. Direct taxes are taxes on land or “head” taxes on the general population. The individual mandate does not tax land. It is not assessed on the population generally but only on people who don’t buy insurance and aren’t otherwise exempt. It is a tax on behavior, like a tax on businesses that don’t install anti-pollution equipment.
Many important and popular government programs are based Congress’s ability to give incentives through taxation and redistribute tax revenues for public purposes. To strike down the individual mandate the Supreme Court would have to undermine many years of precedents justifying these programs that stretch back to the New Deal (and in the case of the rules for direct taxes, to the very founding of the country).
Many people dismissed Balkin’s argument, as did several Federal Judges, but it turns out he had it right all along. I suppose he’ll become pretty famous now.
There will be more analysis to come, and I will update this post with a bit more analysis as warranted. However, I think it’s safe to say we’ll be writing many posts about this decision and its impact on American law, the election, and American politics.
Here’s a copy of the opinion: