The Associated Press (AP) reports on nj.com the U.S. Supreme Court, in a 5-4 decision, has upheld the Affordable Care Act (ACA), also known as “Obamacare.” The majority, led by Chief Justice John Roberts, upheld the individual mandate and medicaid expansion provisions.
The justices rejected two of the administration’s three arguments in support of the mandatory insurance requirement. But the Court said the mandate can be construed as a tax. “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” Roberts said.
The Court found problems with the law’s expansion of Medicaid [which would increase the number of individuals the states must cover], but even there, the Court said the expansion could proceed as long as the federal government does not threaten to withhold states’ entire Medicaid allotments if they don’t take part in the law’s extension. Justices Breyer, Ginsberg, Kagan, and Sotomayor joined Chief Justice Roberts in the majority.
Justices Alito, Kennedy, Scalia, and Thomas dissented. “The act before us here exceeds federal power both in mandating the purchase of health insurance and in denying non-consenting states all Medicaid funding,” the dissenters said in a joint statement.
The heart of the legal challenge was the claim that Congress could not force people to buy a product – health insurance. The Obama administration advanced several arguments in defense of Congress’ authority to require health insurance, including that it falls under the power to regulate interstate commerce.
The government also argued that the insurance requirement was necessary to make effective two other undoubtedly constitutional provisions: the requirements that insurers accept people regardless of existing health problems and limit what they charge older, sicker people.
The administration also said that even if the Court rejected the first two arguments, the insurance requirement and penalty are constitutional as an exercise of Congress’ power to enact taxes. The penalty assessed for not buying insurance functions like a tax, the government said.
Source: nj.com, 6/28/12, By AP
[Editor's Note: The Supreme Court's decision encompassed three cases: National Fed'n of Indep. Bus. v. Sebelius, Docket No. 11-393, U.S. Dep't of Health and Human Servs. v. Florida, Docket No. No. 11–398, and Florida v. U.S. Dep't of Health and Human Servs., Docket No. No. 11–400.
Due to the length of the 193-page decision, Legal Clips will focus its comments on the provisions of the decision that are of the greatest interest to our school law subscribers.
The constitutionality of the individual mandate provision
The ACA, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance (Commerce Clause argument). The Justices also found that the "individual mandate is not 'necessary' to the ACA's other reforms, and such an expansion of federal power is not a 'proper' means for making those reforms effective" (Necessary and Proper Clause argument). However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power.
The constitutionality of the Medicaid expansion provision
Because the individual mandate survives, the Court did not need to decide whether other parts of the statute were constitutional, except for Section 1396C of the ACA which required states to comply with new eligibility requirements for Medicaid or risk losing their funding. This provision was limited by the Court in order to meet the constitutional standard that federal spending provisions cannot coerce the States to participate. On that question, the Court held that the Medicaid expansion provision is constitutional as long as states would only lose new funds if they did not comply with the new requirements, rather than all of their funding: "Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding."]