For the three of you that haven’t heard yet, the Supreme Court in a narrow 5-4 vote held that the Accountable Care Act (otherwise known as ObamaCare) is constitutional and may stand virtually as-is. The more interesting thing is how they upheld it though. Out of the 193 page opinion issued by the Court, only the first 44 pages are agreed upon by a majority of the justices in favor of the Act.
Because the oral arguments over the Act were some time ago now, it may perhaps be helpful to recall what the issues were in the first place. All of the arguments centered around 2 primary provisions – the so-called individual mandate and the expansion of Medicaid. The individual mandate is the portion of the act that requires everyone in the United States to purchase health insurance, with the caveat that if one does not purchase such insurance, one would be subject to an a penalty in the form of an additional tax collected based on AGI (adjusted gross income). The expansion of Medicaid provisions expanded Medicaid coverage to millions of Americans who previously did not qualify as they had incomes above the cut-off. Here the contested provision was one that stated that if states refused to expand their Medicaid programs (Medicaid is administered and controlled by the state governments, they merely receive block grants from the Federal government for it) they would lose all Federal funding – even current funding.
The arguments themselves were (stated in favor of the Act):
- The individual mandate of the Act was constitutional under the Commerce Clause.
- Failing #1, the individual mandate Act was constitutional under the taxing power of the Federal government.
- The individual mandate created a new tax and the Anti-Injunction Act barred a constitutional challenge until that tax was assessed and collected.
- The Medicaid expansion requirement was a valid requirement that the government could attach to grants of Federal funding to the states.
- Should either the individual mandate or the Medicaid expansion prove to be unconstitutional, both items would be severable from the rest of the ACA and the rest of the Act could stand.
Looking at the opinion, it’s plain to see that this was not a total win for the Federal government and the Obama administration. On a per argument basis, here’s how the decision shook out:
- 5-4, Unconstitutional – The Commerce Clause gives the Congress the ability to regulate commerce that is then in existence, not the ability to forcibly create new commerce.
- 5-4 Constitutional – Because the individual mandate has a “penalty” in the form of an increased tax based solely on income (and not on the cost of health insurance), it is a tax even though it does not say in plain language that it is.
- 9-0 Does not apply – The 4 Justices that voted that the mandate was not a tax obviously would not think the Anti-Injunction Act applied. The 5 that did think it was a tax made an interesting turn here – though they mandate functions as a tax for constitutional purposes (though it doesn’t say it is), it’s not a tax for the purposes of the Anti-Injunction Act because the two acts use differing language – and both were created by Congress, so the wording would have to be the same for it to have applied.
- 5-4 Constitutional (if correctly applied) – Here Justices Sotomayor and Ginsburg would always hold the Medicaid expansion’s coercion language to be constitutional – but the other 7 Justices believe that it might be invalid as overly coercive to the states. How this passed is that 3 of those 7 agreed that it could be constitutional – if one reads in the ability for states to opt-out of the expansion and keep their existing funding. These 3 joined Sotomayor and Ginsburg to narrowly validate the expansion.
- 5-4 Irrelevant/not reached – Because 5 of the Justices held that the mandate and expansion were constitutional, the severability argument was not reached. The other 4 Justices held that the Act was not severable, and should be invalidated in its entirety.
Thus, while this was certainly a “victory” for the Obama administration, it’s not quite the overwhelming and convincing win that is being portrayed. The Court didn’t buy the ability to create commerce is a part of the Commerce Clause. Nor did they agree with the government that the challenge should be tolled until the tax is collect (though this ultimately wouldn’t matter). Most importantly the Court held that, though the Medicaid expansion could be valid as applied, Congress may not use existing funding as a stick with which to keep the states in line – and in so doing applied a “coercion theory” that had not been articulated since the late 1930s. Allowing Congress to force something on the state governments against their will would have seriously damaged our federal form of government, casting shadow on the independence and, in fact, relevance of state level governments in the 21st century.