By John Williams
In 1954 the nation’s attention was riveted on the case of Brown v. Board of Education, in which the U. S. Supreme Court was asked to decide the constitutionality of racial segregation in public schools. For the last year, the nation has waited, with the same nervous anticipation, for the Court to decide the constitutionality of Obamacare.
Obamacare, of course, is a shorthand reference to the Patient Protection and Affordable Care Act (“ACA”) passed by Congress in 2010. On the day President Obama signed the bill into law, the first lawsuit challenging the law was filed. Several other lawsuits were subsequently filed in various courts through the country. The lower courts rendered conflicting decisions in these cases, but everyone knew that the only decision which counted would be the decision of the U.S. Supreme Court.
On three days in March, the lawyers presented six hours of oral argument to the Supreme Court. On June 28, 2012, the Court rendered its decision – a decision which surprised many pundits. This article summarizes the main points of this historic decision.
Like a legislative committee, the nine Supreme Court Justices decide a case by sitting around a table, discussing the issues, and then taking a vote on each issue. As in a legislative committee, it takes a majority of at least five of the nine Justices to decide an issue. They explain the reasons for their votes by writing opinions that are subsequently published.
As often happens in Supreme Court cases, several of the nine Justices wrote separate opinions in this case. Each opinion is about 60 pages long. The Court’s opinions address the constitutional challenges to two of the ACA’s central requirements – the “individual mandate” and the expansion of state Medicaid programs.
I will discuss these separately:
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Individual mandate. This section of the ACA requires individuals who do not have health insurance through their employer to purchase an individual health insurance policy providing a minimum level of coverage. Those who fail to purchase health insurance must make an annual payment to the Federal Government at the time they file their income tax returns. It is anticipated that this requirement will affect about 15 million Americans.
Five of the nine Justices (a majority of the Court) decided that this provision is constitutional because Congress has the power to “lay and collect Taxes.” Although the ACA described the payment which must be made by those without health insurance as a “shared responsibility payment” or a “penalty,” the Supreme Court said that the labels used by Congress to describe the payment are not determinative.
According to the Court, “the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.” The Court said the ACA “makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.” According to the Congressional Budget Office, this tax will raise about $4 billion annually – not a very large sum in the context of the federal budget. Those who have health insurance, of course, do not have to pay this tax.
Although the Court’s majority upheld the constitutionality of the individual mandate because of Congress’ power to “lay and collect Taxes,” a different group of five Justices stated their opinion that the Commerce Clause in the Constitution did not provide a basis for Congress to enact the individual mandate. The Commerce Clause gives Congress the authority to “regulate Commerce.” These five Justices found this power is not broad enough to compel individuals to become active in commerce by purchasing a product, namely, health insurance.
These five Justices reasoned that “[a]llowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation.” If inaction justified Congressional action, the five Justices said, “Congress could address the diet problem by ordering everyone to buy vegetables” – a scenario one Justice described as “the broccoli horrible.” As these five Justices concluded, “The Framers [of the Constitution] gave Congress the power to regulate commerce, not to compel it.”
The pronouncement of these five Justices about the Commerce Clause, however, has no practical effect on the ultimate decision in the case because the Court found that the individual mandate is authorized by the Taxing Clause of the Constitution even though it is not authorized by the Commerce Clause.
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Medicaid Expansion. The current Medicaid program (known as TennCare in Tennessee) pays the health care costs of certain categories of persons – pregnant women, children, very low-income families, the blind, and the disabled. The ACA required all states to expand their Medicaid programs by 2014 to cover all individuals under the age of 65 whose income is below 133 percent of the federal poverty level. A state which chose not to participate in this dramatic expansion, under the terms of the ACA, would lose all its current Medicaid funding.
26 states challenged this provision of the ACA on the ground that it unconstitutionally coerces the states to participate in the Medicaid expansion. According to the Congressional Budget Office, the expansion will add approximately 15 million people to the Medicaid rolls and will increase the Federal Government’s spending on the Medicaid program by $100 billion annually. Because a portion of Medicaid costs are borne by the states, the expansion will dramatically increase state expenditures as well.
A majority of the Supreme Court (seven of the nine Justices) ruled that the Medicaid expansion is unconstitutional as written because it is impermissibly coercive. Chief Justice Roberts described it as “a gun to the head” of the states because of the significant amount of funding a state would lose if it refused to accept the terms of the Medicaid expansion.
The remedy adopted by a majority of the Court (this time, five of the nine Justices) was to sever from the ACA the provision that makes the Medicaid expansion mandatory. The Court made the expansion voluntary. Each state is now free to accept or reject the additional federal funding for an expanded Medicaid program. If a state accepts the funding, it must comply with all the requirements of the ACA. If a state rejects the funding, it will not lose the funding it currently receives under the existing Medicaid program.
It is unfortunate but not surprising that the Supreme Court was so divided in its decision. The partisan gridlock which has plagued Congress in the last two years also seems to affect the Supreme Court.
The Court’s decision illustrates what we frequently see in the state legislature: every vote counts. Most portions of the Supreme Court’s decision were decided by a 5-4 margin, just as many decisions in legislative committees are decided by a 1-vote margin.
The November election may have some effect on the permanence of Obamacare. But for now, it appears that the ACA is here to stay.