Obamacare: up for grabs at Supreme Court

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Demonstrators for and against the Patient Protection and Affordable Care Act march and chant in outside the U.S. Supreme Court Building in Washington, DC on March 26, 2012.

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    Why ObamaCare Is Wrong for America
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  • Here’s what’s ahead for #ObamaCare at the Supreme Court

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  • Best constitutional argument against #ObamaCare centers on unprecedented, unbounded nature of the individual mandate

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  • As important as the Supreme Court ruling on #ObamaCare will be, keep in mind three things

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Two years after its enactment, ObamaCare remains unpopular, unaffordable and unworkable. 

This week, three days of oral argument before the Supreme Court should confirm that it’s also unconstitutional.

Shortly after President Obama signed the Patient Protection and Affordable Care Act into law on March 23, 2010, state government officials, private organizations and various individuals filed a number of lawsuits challenging the new law.  Lower federal courts issued conflicting rulings.  One overturned the entire law.  Three other courts invalidated only parts of it.  Five federal courts upheld the law as a whole.  Other courts dismissed the challenges for technical reasons that did not reach the merits.  

Now it’s up to the nine justices of the Supreme Court to reach a final decision, most likely to be announced in late June. "The court ruling will affect our fundamental freedom and shape the future role of government.  But even then, the political battle beyond the courts will continue." - Thomas P. Miller They will have the final word, for now, on whether ObamaCare is unconstitutional.  The court ruling will affect our fundamental freedom and shape the future role of government.  But even then, the political battle beyond the courts will continue:  To repeal ObamaCare through legislative means if necessary and to replace it with better health policy in any case.   

Here’s what’s ahead at the Supreme Court:

The oral argument will proceed in stages.  The first issue on Monday morning, March 26, is whether or not the court has jurisdiction to decide the case at this time.  One lower court concluded that a relatively obscure 19th Century law called the “Anti-Injunction Act” (AIA) applied to the case, because the penalty for violating ObamaCare’s individual mandate was collected like a “tax.”  Therefore it could not be challenged in court until the mandate comes into effect several years from now (in January 2014) and an uninsured plaintiff is required to pay it.  However, all other federal courts reviewing this issue over the last two years have concluded that the mandate penalty passed by Congress was not the type of tax covered by the AIA.  Even the attorneys for the Obama Administration conceded the point in several earlier legal briefs.  The Supreme Court’s job here is a matter of carefully interpreting on its own the legislative history of the new healthcare law and other provisions in the Internal Revenue Code.  It should conclude that the constitutional challenge to ObamaCare can go forward.  

The heart of the case–the individual mandate to purchase government-approved health insurance–is to come up for oral argument on Tuesday morning.  The best constitutional argument against it centers on the unprecedented and unbounded nature of this mandate.  The new health law provides no limiting principle to how far such federal power to compel people to enter into commerce and buy products could extend. 

The supporters of ObamaCare resorted to constitutionally improper means to achieve their political objectives of expanded coverage and tighter federal control over healthcare.  They lacked sufficient support to tax Americans more openly to accomplish their scheme.  That would have been constitutionally proper (if not politically viable or economically wise).  

Instead, Congress and the President decided to claim that they had the power to do this as a way of regulating “interstate commerce.” 

The Supreme Court justices must decide whether the Commerce Clause of the Constitution can be stretched this far.  A successful challenge to ObamaCare will have to get past a number of past court decisions that provided broad leeway to the federal government in areas of economic regulation. ObamaCare opponents argue that the decision not to buy health insurance does not constitute commerce and that the individual mandate is neither a necessary nor proper means to execute the constitutional power of Congress to regulate health insurance.  The final ruling could ultimately come down to the court’s view of how best to maintain the constitutional structure that balances the roles and responsibilities of the federal government, the states and the people.  The fundamental concept of limiting the federal government to its enumerated powers under the Constitution is at stake here.  Expect a close call here, with a 5-4 decision to strike the individual mandate at least a 50-50 proposition.

On Wednesday, the Court is scheduled to consider another constitutional challenge to the new health law:  That its mandate to the states that they must expand their Medicaid programs to cover more people, or risk losing all federal money for Medicaid, is too “coercive” and therefore unconstitutional.  This argument has not succeeded in lower courts up to now.

Congress certainly pushed the limits here in abusing its broad authority to spend money and attach conditions to how states receive the funds.  But State officials agreed decades ago to what became a bad bargain in economic and political terms.  The court remains unlikely to see this as constitutionally improper. 

Finally, the court is to consider on Wednesday how much of the ObamaCare health law can survive if the court finds any of its provisions, such as the individual mandate, unconstitutional.  The primary parties to the case have argued for essentially an “all or nothing” approach.  Opponents of the individual mandate want the entire law invalidated, while the Obama Administration attorneys contend that only a few related insurance regulations (for guaranteed issue and community rating) cannot function without the individual mandate, so that the rest of the law should be upheld in any case.  The court’s past rulings on “severability” of constitutionally improper portions of complex federal legislation have not been fully consistent.  But the best approach is to focus on whether Congress would have passed the law in the absence of the constitutionally improper provision.  In this case, that would dictate the entire health law should be ruled unconstitutional. 

As important as the Supreme Court ruling will be, keep in mind three things:  First, this involves constitutional law, not what is better health policy or simply the continuation of political battles by other means.  The basis for any final decision will be narrower.  Second, Supreme Court rulings often can be surprising, incomplete and disappointing.  In this case, four votes to uphold the new health law are more or less guaranteed, and the past opinions of several “conservative” justices in this area of constitutional law are inconsistent and less predictable.  Finally, the larger political struggle to repeal ObamaCare and replace it with less intrusive and more effective health reforms will need to continue well beyond whatever Supreme Court decision is announced later this year. 

Tom Miller is the author of Why ObamaCare is Wrong for America.

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About the Author


Thomas P.
  • Thomas Miller is a former senior health economist for the Joint Economic Committee (JEC). He studies health care policy and regulation. A former trial attorney, journalist, and sports broadcaster, Mr. Miller is the co-author of Why ObamaCare Is Wrong For America (HarperCollins 2011) and heads AEI's "Beyond Repeal & Replace" health reform project. He has testified before Congress on issues including the uninsured, health care costs, Medicare prescription drug benefits, health insurance tax credits, genetic information, Social Security, and federal reinsurance of catastrophic events. While at the JEC, he organized a number of hearings that focused on reforms in private health care markets, such as information transparency and consumer-driven health care.
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