DGS Health Law Blog

Supreme Court upholds the ACA

The Supreme Court issued it opinion today on the Affordable care Act.  In an opionion drafted by Chief Justuce Roberts, to which the other Justices, in various combinations, agreed in part and disagreed in part, the majority of the Court, in various combinations, ruled  on the key issues as follows:

1,  The individual "mandate" to purchase insurance was a valid exercise of the taxing power of Congress, a condition that if you do not buy an insurance policy with the minimum essential benefit package, you must pay the IRS money as an alternative.  Though the ACA called the payment a "shared responsibility payment" and a " penalty", not a "tax", C.J. Roberts wrote that Congress's choice of terms only affected whether the lawsuit was premature under the Anti-Injunction Act (which prevents lawsuits to stop a tax until such time as the tax has actually been assessed and paid -- Roberts saying that since Congress didn't call it a tax the AIA didn't apply), and was not determinative on the Constitutional question of whether the assessment of the penalty payment was a "tax" within the scope of Congressional powers.  Roberts concluded that it was such a tax and was therefore a constitutional exercis of Congresses enumerated taxing power.  Four other Justices agreed with that postion, while four opposed it.  Therefore the mandate to purchase insurance stands as being Constitutional.

     Though it was not necessary for C.J. Roberts to go any further, having decided the ACA was a Constitutuional exercise of taxing power, he wrote at length on the main arguments that had been made in the case:  whether the commerce clause or the "necessary and proper" clause permitted the "mandate."  His opinion stated that neither of these would be a Constitutional justification for the mandate provisiuon and that but for the taxing power of Congress, the mandate would have been unconstitutional and not permitted under those enumerated poweers.  Four Justuices agreed with that position (the four who did not agree with the taxing power ruling and who would have invalidated the entire ACA) and the other four did not.  Unfortunately, since this discussion was not a necessary part of the final opinion, the 5-4  agreement that the mandate was not a valid exercise of these two powers is not an actual decision on the merits of the scope of those Congressional powers, and it is likely to be an issue in the future in some other case.  Congress is not known for restricting its actions based on a non-precedential statement by the Court.

2. C.J. Roberts' opinion then held that the expansion of the Medicaid program, which he described as a major change in the purpose and scope of the program, was a permissible exercise of Congressional authority, but that it was not pernissible for Congress to threaten to take away current funding going to a State for the existing scope of Medicaid as a penalty if the State did not agree to expand its current Medicaid program.  Most of the other Justices agreed that this funding could not be withheld as a penalty for non-expansion, for a variety of reasons (some because they wanted to invalidate everything in the ACA and some because they  thought that to be an apprpriate restriction of the required expansion in the ACA).

So we end up with approval of the Constitutionality of the ACA because the individual mandate penalty is really a tax (one where an individual can choose to either buy insurance or pay the tax)  and a permissible "required " expansion of medicaid that may have no penalty to a State that chooses not to expand its program.  What happens if the next Congress decides to eliminate the tax penalty if an individual doesn't buy insurance - does the litigation start over?


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