By Reed Rubinstein
Dinsmore & Shohl LLP
Yesterday, by a 5-4 vote and on the strength of an opinion authored by Chief Justice John Roberts, the United States Supreme Court upheld the individual mandate in President Obama’s signature Patient Protection and Affordable Care Act.
The decision is complex and confusing. To begin with, the Court ruled that the individual mandate was not a “tax” for purposes of the Anti-Injunction Act, which prohibits legal challenges to taxes before they take effect, because Congress termed the mandate a “shared responsibility payment.” Then, the Chief Justice rejected the argument that Congress had the authority under the Commerce Clause to require individuals purchase health insurance. However, he called the individual mandate a “tax” for constitutional purposes (notwithstanding Congress’s refused to call it a tax when it passed the law) and then ruled that Congress had the constitutional authority to tax people who did not buy insurance. Finally, seven Justices held that Congress lacked the constitutional Spending Clause authority to punish states that refused to expand Medicaid as provided by the ACA and violated basic federalism principles by doing so.
On its face, the Chief Justice’s opinion seems difficult to understand. Four “liberal” justices (Ginsberg, Sotomayor, Kagin and Breyer) held that the Commerce Clause authorized the mandate. Four “conservative” justices (Alito, Kennedy, Scalia and Thomas) held that the Act was unconstitutional in its entirety. Although Robert’s Commerce Clause and Spending Clause rulings followed the “conservatives,” and set clear new limits on federal power, he joined the “liberals” to uphold the mandate by defining the term “tax” in a most elastic fashion. Concluding his opinion, Roberts wrote that “the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.”
The larger political context explains the interpretive gymnastics. In 2008, candidate Obama promised transparency, free health care those who could not afford or obtain private insurance and economy-wide cost reductions. He also guaranteed that those happy with their current doctors and plans could keep them, same as before. President Obama ultimately delivered a 2000 page legislative monstrosity, negotiated almost entirely behind closed doors, that was so complex the Speaker of the House was led to say, without evident irony, that enactment was required “so we can find out what’s in it.”
In fact, Obamacare has proven to be one of the most socially disruptive measures ever enacted by an American Congress. The circus of its passage included massive (albeit clean and peaceful) demonstrations by angry citizens opposed to individual mandate and vitriolic accusations by prominent supporters that the opponents were racist and “un-American.” It also included unprecedented procedural gamesmanship by Congressional leaders, without which the Act would not have become law.
Then, the President took the remarkable step of publicly warning the Supreme Court, in the midst of its deliberations, that it “would be an unprecedented, extraordinary step” for the Court to find the law unconstitutional. Influential and politically connected voices were heard urging the President, in the event the ACA was overturned, to run a tough political campaign against the Court.
Yet, by characterizing the mandate as a tax and upholding Obamacare, while also setting limits on the federal Commerce Clause and Spending Clause powers, Chief Justice Roberts effectively defused these attacks and took the Court out of the Administration’s political gunsights. At the same time, he cemented a foundation for future cases limiting federal power, energized the political forces that in 2010 caused a historic shift in the Congress’s political balance and, perhaps inadvertently, forced President Obama to take ownership of a massive federal tax increase and all of its associated baggage.
But when all is said and done, the Supreme Court’s decision still translates into “full steam ahead” for Act implementation without effective checks, balances or limits. Employers and health care providers will face a monumentally heavy regulatory and tax burden. Although most patients with existing insurance plans will not see major changes or deterioration in the availability, nature, and quality of health care overnight, within three to five years their world will be very different. The Act front-loaded benefits (e.g. removal of pre-existing condition limits) but back-loaded burdens (e.g. limits on care, taxes, insurance pools). These burdens now will be felt in full force.
Absent Obamacare repeal or modification, it seems that the rich will keep the healthcare they now have, the uninsured and a huge class of government bureaucrats will benefit from a new entitlement, and many middle-class Americans will pay more in taxes for less care. The Supreme Court did not stop this. Instead, as Chief Justice Roberts made clear, it is now up to the people, acting through their elected representatives in Congress, to fix the problem.
Reed Rubinstein is a partner in Dinsmore & Shohl’s Washington, D.C., office. He previously served as the U.S. Chamber of Commerce Senior Counsel for environment, technology and regulatory affairs. Learn more about Reed at www.dinsmore.com.