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Today’s health-care decision: In Plain English

Shortly after ten o’clock this morning, and after more than one false alarm, the Court issued its decision in the challenges to the constitutionality of the Affordable Care Act.  In this post, we will dissect the decision in Plain English.  But before we do that, let’s cut to the chase on the issue in which people are generally the most interested (and which I’ve already discussed in an initial post in Plain English):  a deeply divided Court held that the individual mandate, which requires that virtually all Americans either obtain health insurance or pay a penalty by 2014, is constitutional.

Before it could decide whether the mandate is constitutional, however, the Court had to determine whether it was allowed to do so at all.  As I explained back in March, the Court spent the first of the three days of oral argument hearing from three different lawyers on whether the challenges to the Affordable Care Act were barred by the Anti-Injunction Act, a Reconstruction-era law that prohibits lawsuits to challenge a tax until the tax actually goes into effect and has been assessed.  Under this line of argument, because the penalty for failing to purchase health insurance (as the mandate requires) is a tax, no one can challenge it until after the mandate actually goes into effect in 2014.

After the oral argument, most Court watchers doubted that the Court would let the Anti-Injunction Act keep it from reaching a decision on the constitutionality of the mandate.  Even Robert Long, the Washington lawyer who argued that the AIA should bar the Court from getting to the merits of the mandate, predicted after the argument that he would lose, quite possibly without receiving any votes.  But Long’s argument was hardly a frivolous one:  the federal government had made the same argument in the lower courts, but then decided to abandon it on appeal.  And Judge Brett Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit – a well-respected conservative jurist who worked in the George W. Bush Administration – made the same argument when a challenge to the ACA reached his court.

In the end, the Court dealt with the Anti-Injunction Act issue quickly and neatly, in approximately four pages.  In an opinion by the Chief Justice, the Court relied on the fact that, in the health care bill itself, Congress required anyone who does not buy health insurance to pay a penalty, rather than a tax.  To be sure, Congress can’t just get around other limits on its power by calling something a penalty rather than a tax (or vice-versa), but here Congress enacted both the AIA and the health-care law; if it called it a penalty instead of a tax in the health-care law, and didn’t “require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti-Injunction Act,” the Court concluded, that’s all that matters.  The Anti-Injunction Act does not apply, and the Court could move on to consider the constitutionality of the mandate itself.

The centerpiece of the challenge to the Affordable Care Act was the so-called individual mandate – the requirement that almost all Americans buy health insurance by 2014 or pay a penalty.  Defending the constitutionality of the mandate, the government’s primary argument was that Congress can require everyone to buy health insurance using its power under the Commerce Clause of the Constitution, because the failure to buy insurance shifts the costs of health care for the uninsured to health-care providers, insurance companies, and everyone who does have health insurance.  Five Justices – the Chief Justice and Justices Kennedy, Scalia, Thomas, and Alito – all rejected that argument.  But the government still won, because a different set of five Justices – the Chief Justice and Justices Ginsburg, Breyer, Sotomayor, and Kagan – agreed that the mandate was constitutional, but for a different reason.

The most important part of the Court’s opinion on the mandate came from the Chief Justice, John Roberts.  He acknowledged that Congress has a broad power under the Commerce Clause, but he emphasized that Congress’s power to regulate commerce assumes that there is commerce to regulate.  In his view, the mandate creates commerce, rather than regulating it.  If the Court were to interpret the Commerce Clause the way that the government does, he contended, it would allow Congress to regulate all kinds of new things – including forcing people to buy vegetables (with no specific reference to broccoli, however).  “That is not the country” the Founding Fathers envisioned, he proclaimed.

Although the Chief Justice rejected the government’s Commerce Clause argument, he agreed with one of the government’s alternative arguments:  the mandate imposes a tax on people who do not buy health insurance, and that tax is something that Congress can impose using its constitutional taxing power.  He acknowledged that the mandate (and its accompanying penalty) is primarily intended to get people to buy insurance, rather than to raise money, but it is, he explained, still a tax.  If someone who does not want to buy health insurance is willing to pay the tax, that’s the end of the matter; the government cannot do anything else.

Justice Ginsburg (joined by Justices Breyer, Sotomayor, and Kagan) agreed with the Chief Justice’s bottom line – that the mandate is constitutional under Congress’s ability to tax – even while disagreeing with his Commerce Clause conclusion; those four Justices would have also held that Congress could use its power to regulate commerce to pass the mandate.

With five votes to uphold the mandate, it will survive, and the Court did not need to consider the “severability” issue — that is, what other parts of the law would have to go if the mandate were unconstitutional.  Instead, the Court moved on to the fourth issue in the case, popularly known as the “Medicaid coercion” issue.  At issue is a provision in the health-care law that would require the states to provide Medicaid coverage for virtually all poor Americans under the age of sixty-five – a significant expansion of what the federal government currently requires – or risk losing all of the Medicaid funding that they get from the feds.  The states argued that the provision is unconstitutional because the federal funding is so large, and they are so dependent on it, that they really don’t have a choice about whether to comply with the new requirements.

The Court acknowledged that Congress can put strings on the money that it gives to the states.  However, it explained that this was not the kind of “relatively mild encouragement” that the Court had approved in earlier cases involving this “coercion” theory – for example, in a 1987 case in which it had held that Congress could threaten to withhold five percent of federal highway funds from states that did not raise their drinking age to twenty-one.  Instead, the Medicaid provision goes too far and is more like a “gun to the head.”  Having said that, however, the Court made clear that Congress could still attach some strings to the Medicaid funds.  Specifically, even if it can’t take away all of the funding for states that don’t comply with the new eligibility requirements, it can still withhold the new Medicaid funds if states don’t comply.  So although the Obama Administration lost on this issue, it’s probably a loss that it is willing to live with for now, as few states (if any) are ultimately expected to turn down the new Medicaid money, even with the strings.

After delivering its verdict on health care, the Court adjourned for the summer, leaving the rest of us to figure out exactly what the decision means.  When they return in October, we’ll probably still be analyzing and debating it.

Recommended Citation: Amy Howe, Today’s health-care decision: In Plain English, SCOTUSblog (Jun. 28, 2012, 6:07 PM),