What Does the Supreme Court’s Decision Really Mean?

That seems to be the big question, although the bottom line is clear: the Affordable Care Act is constitutional, and health reform will continue to be implemented. But as with many Supreme Court cases, there are a lot of details to work out.

The opinion, written by Chief Justice Roberts generally upholds the Affordable Care Act in its entirety, with certain important nuances. If you’ll recall from our previous blog posts on the oral arguments, there were three questions being addressed: whether the case was barred by the Anti-Injunction Act; whether the individual responsibility provision was a constitutional exercise of Congress’ power under the Commerce Clause; and whether the Medicaid Expansion was constitutional.

The Anti-Injunction Act Did Not Prevent the Court from Deciding the Case

The first question argued was whether a law, called the Anti-Injunction Act, barred the Court from deciding whether the individual responsibility provision was constitutional. That law requires someone protesting a tax to have first paid it, and no one will pay a penalty until 2014.

  • In this case, Roberts found that the ACA consistently referred to the individual responsibility provision as a penalty, not a tax, even though it’s to be collected in the same manner as a tax.
  • Roberts gave deference to the language of the ACA and found that the provision wasn’t a tax for the purposes of the Anti-Injunction Act, allowing the Court to decide the case.

Congress Exceeded Its Authority Under the Commerce Clause

The Commerce Clause allows Congress to make laws for the regulation of interstate commerce when it is “necessary and proper.” The argument by the Government was that health care costs impact interstate commerce, and when people do not have insurance and get sick, the cost of their care gets passed along to everyone else. Therefore, people could be required to purchase insurance before they get sick, or pay a penalty.

  • Roberts framed the issue as an attempt by Congress “to compel individuals not engaged in commerce to purchase an unwanted product.”
  • He went on to say that while Congress has the authority to regulate “activity,” it does not have the authority to compel activity, unless that power is specifically stated in the Constitution (such as the power to coin money). Therefore, because the individual responsibility provision requires people to become active in commerce by purchasing health insurance, requiring people to purchase insurance is an impermissible expansion of Congress’ power under the Commerce Clause.
    • The Government also attempted to argue that because Congress can make laws “which shall be necessary and proper for carrying into Execution” its powers under the Constitution, it had the power to require people to purchase insurance since that was necessary to its other reform provisions.
    • Roberts rejected that argument, stating that the “Necessary and Proper” clause applies when Congress is using its authority in a permissible way. Since requiring people to purchase insurance was an impermissible use of its Commerce Clause power, the provision might be necessary, but it was not proper.
  • Justice Ginsburg disagreed, however. She would have found that Congress did have the power under the Commerce Clause to require people to have minimum coverage, as would Sotomayor, Kagan, and Breyer.

The Individual Responsibility Provision Is a Constitutional Exercise of the Taxing Power

  • The Government argued that the individual responsibility provision could also be viewed as a tax on those who choose not to purchase insurance, and Congress has the power to “lay and collect Taxes” under the Constitution.
  • If a statute has two possible interpretations, and one of them is unconstitutional, and the other is constitutional, a court has the responsibility to interpret the law in a constitutional manner.
    • In this case, the individual responsibility provision can also be viewed as a tax on those who choose not to purchase health insurance. Because it’s collected by the IRS at tax time, and because it will collect revenue, the Court determined the statute could be read as a use of Congress’ taxing power.
      • This is confusing, since the Court found that it was not a tax for the purposes of the Anti-Injunction Tax.
      • The simplest explanation is that Congress gets to decide when to trigger the Anti-Injunction Act, and it does so through the language in the statute. Since Congress called the individual responsibility provision a penalty, the Act was not triggered. But for purposes of determining whether the provision is constitutional, the Court found that it is a tax.
  • All five justices of the majority agree that the individual responsibility provision is okay as a tax, which is why the provision survived.

The Medicaid Expansion Is Constitutional – With a Caveat

  • While the Medicaid expansion (to everyone making under 138% of the federal poverty level) was considered constitutional, Roberts puts one important limitation on that expansion: should a state not comply with the Medicaid expansion, the federal government cannot withhold money for the existing Medicaid program in that state.
  • Roberts compares federal/state programs to contracts. The federal government offers states money to administer programs, or make laws, and it can put strings on that money, which states can accept.
    • Medicaid is a voluntary program for the states, but all states have a Medicaid program, which makes up as much as 10% of its total budget.
    • Medicaid has always covered pregnant women, children, the blind, and disabled. It has never covered childless adults.
    • Roberts found that while previous expansions could be reasonably expected, the current expansion was the equivalent of changing an important term in the contract. States needed to have a choice whether or not to accept, or sign on to, the new contract, and it would not be fair to withhold Medicaid dollars for the old Medicaid program if a state didn’t sign up for the new expansion.
  • Justices Ginsburg and Sotomayor were the lone dissenters. They would have upheld the Medicaid expansion in its entirety.

Here at Appleseed, we’re incredibly pleased that the Affordable Care Act was upheld in its entirety, and we’re looking forward to the law’s implementation in Nebraska, taking important steps towards affordable, quality healthcare for everyone.

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