High Noon For The High Court: SCOTUS Tackles Obamacare
The Supreme Court is geared up for what will be one of the most significant legal showdowns in its history, when arguments will be heard over the next three days on the Affordable Care Act (ACA), a.k.a. Obamacare.
The nuances and legalities are many, the importance equally huge. To set the stage, Adam Freedman over at Ricochet breaks the arguments down into easily digestible and informative pieces, each worth a full read in their own right.
Freedman starts his series of essays where the Court will, addressing “a potentially significant issue that hasn’t received a lot of press: whether the legal challenges to ACA’s individual mandate are premature under the Anti-Injunction Act.”
The Anti-injunction Act is a law going back to the nineteenth century that bars lawsuits challenging a federal tax provision if that provision has not actually gone into effect. The “tax” in question is the financial penalty exacted on those citizens who fail to buy a federally-approved health insurance policy.
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Oddly enough, none of the parties at the Supreme Court next week are claiming that the lawsuits are barred by the Anti-Injunction Act; not even the Obama administration which evidently, doesn’t want to start the week off by labeling the mandate as a “tax.” But by Tuesday, the administration will have changed course and will be insisting that the mandate is a tax, in order to justify it under the “General Welfare” clause.
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If the High Court rules that the Anti-Injunction Act applies, then all legal challenges to the individual mandate will have to be postponed until 2014, when the mandate and its penalty provision actually kick in.
On Tuesday, the Supreme Court will hear arguments on the constitutionality of the individual mandate, which Freedman details here:
The Obama administration follows the script penned by congressional Democrats, that the ACA is an exercise of Congress’s power to regulate “commerce . . . among the several states.” Granted, unless your doctor happens to live in a different state, most individual healthcare transactions do not take place “among the several states.” Unfortunately, we continue to live under the awful precedents of the New Deal when the Supreme Court held that Congress has the power to regulate economic activity that, in the aggregate, will affect interstate commerce. Most infamously, in 1942, the Court upheld New Deal regulations that dictating the amount of wheat a person could grow for his own family’s consumption! (Wickard v. Filburn). And if the ACA is a constitutional regulation of interstate commerce, then the mandate “is within Congress’s power to enact not because it is a necessary component of a broader scheme of interstate economic regulation.”
As a fallback, the government also argues that ACA is justified under the General Welfare Clause, which has been construed to allow Congress to impose taxes to promote “the general welfare.” For the purposes of this argument, the penalty clause of the individual mandate is a “tax,” even though the President and members of Congress have vehemently denied that Obamacare contains any taxes.
The main brief opposing the individual mandate (submitted by 26 states) points out that forcing people to buy insurance is not a “regulation of commerce.” The main brief says: “The individual mandate rests on a claim of federal power that is both unprecedented and unbounded: the power to compel individuals to engage in commerce in order more effectively to regulate commerce. This asserted power does not exist.” If regulating inactivity were a “necessary and proper” means of regulating commerce, they argue, we would expect to see more of it, but in 220 years, Congress has never required individuals to purchase particular goods or services as a condition of being alive. The government, of course, denies that it is trying to regulate inactivity; rather, they repeat the argument they sold to several lower courts, that the mandate regulates “economic decisions.”
The states also argue against the mandate on the basis of federalism. The individual mandate asserts an authority that “smacks of the police power, which the framers reserved to the states.” This is the basic Tenth Amendment point.
In his third installment, Freedman tackles the issue of the “so-called ‘severability clause,’ which states that if any provision of the law is found to be invalid, the rest of the law will continue in operation.”
But the ACA does not have a severability clause, so there is no clear answer as to whether Congress intended the healthcare law, or parts of it, to survive even without the individual mandate. In one ruling, Senior U.S. District Judge Roger Vinson held that Congress intended all of Obamacare to hang together. Therefore, since Vinson found the mandate was invalid, he also concluded that the entire statute must fall. On appeal, the Eleventh Circuit agreed that the individual mandate is unconstitutional, but the Court held that the rest of the ACA could survive. The fact that Congress failed to insert a severability clause, said the Court, is not decisive. At SCOTUS, the states’ briefs have generally picked up Judge Vinson’s argument that the components of the ACA are too inter-connected to be upheld if the mandate is struck down.
The administration, as usual, is tripping over itself. On Tuesday it will argue that the mandate is “necessary and proper” because it is an integral part of a “comprehensive regulatory scheme” to regulate the market for health insurance. But on Wednesday, the mandate will suddenly be not so integral to the whole scheme, but will instead be a free-floating provision that can be severed from the rest of the law.
Freedman wraps it up with the same issue the Supreme Court will address Wednesday, when it considers the constitutionality of Obamacare’s expansion of Medicaid:
Obamacare forces the States to accept an expansion of Medicaid. All States will be required to offer Medicaid to all individuals under 65 with incomes up to 133% of the poverty level. This new mandate will require a massive expansion of Medicaid rolls. States that refuse to participate in this expansion of Medicaid risk losing every single penny of federal Medicaid funds – for most States, more than a billion dollars a year. This is not a real choice, of course; in fact, the ACA assumes that low income persons will satisfy the individual mandate via Medicaid — there is no other option under the statue. In short, Congress knew all along that it was forcing the States to adopt a federal policy.
On two occasions – in 1937 and 1987 – the Supreme Court stated that the federal government cannot use conditional grants to coerce states into adopting particular policies, because such coercion would violate the basic principles of federalism inherent in the Constitution. The problem is, the Court was speaking hypothetically on both occasions (in both cases, the Court held that there was no coercion), and the Court did not give clear guidance about when federal “pressure” turns into “coercion.” The Court has never held that a program of ostensibly “conditional” grants to States amounted to coercion. The Court has established an “anti-commandeering” principle, which holds that Congress cannot explicitly dictate policies to the States. The argument here is that the Medicaid expansion is an obvious example of “commandeering” the State’s regulatory machinery under the fig leaf of a “conditional” grant program.
Many commentators say the odds are against the States on this one. I hope not. The expansion of Medicaid springs from the same tyrannical spirit as the individual mandate.
If that’s not enough primer to get you geared up, here’s some additional wisdom from, respectively, Reason TV and the Institute for Justice:
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