So first things, first. The Supreme Court upheld the Patient Protection and Affordable Care Act (a little background on the Act can be found here). It was a close decision, with the final vote being 5-4. The opinion was delivered by Chief Justice Roberts, who affirmed the decision along with (generally) Justices Breyer, Sotomayor, and Kagan. Justice Ginsberg wrote the concurring opinion. The dissenting Justices were (sort of) Scalia, Kennedy, Thomas, and Alito. I say “generally” and “sort of” not to be funny but to be accurate: there were several questions at issue and the Justices did not vote consistently together on each issue.
Second, to understand the decision, it’s important to understand the role of the Supreme Court. The Supreme Court doesn’t weigh in on whether they liked the law or whether the law was good or fair for the country. It’s a purely legal analysis based only on the issues raised in the initial arguments. To understand what the Court is saying, it’s a good idea to have the Constitution handy (try this edition as published by the Legal Information Institute).
In this case, the Supreme Court was asked to examine four issues:
- Is the “individual mandate” a violation of the Constitution?
- If the “individual mandate” is found to be a violation of the Constitution, does that mean that the entire Act must be struck down?
- In terms of timing (referred to as “ripeness” in the legal world), can lawsuits be brought now under the Tax Anti-Injunction Act or must they wait until the law goes into effect?
- Finally, is the federal government allowed to expand the Medicaid program and pull funding from the states if they choose not to comply?
The answer to the first question, as delivered in the opinion by Chief Justice Roberts is no – but with some explanation. Chief Justice Roberts agreed with the government’s position that the “[s]hared responsibility payment” under the Affordable Care Act is a “tax” and not a “penalty.” Under the Constitution, Congress has the authority to regulate federal tax. And what makes it a tax?
The payment is not so high that there is really no choice but to buy health insurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by the IRS through the normal means of taxation.
Chief Justice Roberts went on to explain that “[n]either the Affordable Care Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS.” He particularly stressed that “Congress’s choice of language…does not require reading §5000A as punishing unlawful conduct. It may also be read as imposing a tax on those who go without insurance.”
So remember when I was railing about how involved the IRS would be in the health care law even though the Act was never really presented as a tax law? That’s one of the primary reasons it was saved. Remember: words matter.
Another factor in the analysis was the nature of the penalty: if you don’t want to buy health insurance, you pay a price. There’s nothing else, really, that will happen to you. You’re not going to be thrown in jail or otherwise punished (the Act bars the IRS from many of its bag of enforcement tricks, such as criminal prosecutions and levies). In that way, Chief Justice Roberts reasoned, choosing not to comply with the mandate subjects you to what amounts to a tax.
Meh. Do I buy that? Not completely. I think that same kind of reasoning makes a parking ticket a tax. But then, my opinion doesn’t quite matter here (that explains the lack of a robe).
Justice Roberts went on to say that “if the mandate may reasonably be characterized as a tax, it must still comply with the Direct Tax Clause” (found at Article One of the United States Constitution, section 2, clause 3) which, he concludes, it does. Specifically, he noted that “[a] tax on going without health insurance is not like a capitation or other direct tax … It therefore need not be apportioned so that each State pays in proportion to its population.”
In her concurring opinion, Justice Ginsburg writes that the mandate would also stand under the Commerce Clause (found at Article One of the United States Constitution, section 8, clause 3). Justice Roberts disagreed, noting that:
Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Congress already possesses expansive power to regulate what people do. Upholding the Affordable Care Act under the Commerce Clause would give Congress the same license to regulate what people do not do.
In other words, Congress has broad power to act under the Commerce Clause, but there has to be existing commercial activity for that to happen. Chief Justice Roberts reasoned that the mandate creates activity (buying insurance); it doesn’t attempt to regulate it.
Justice Roberts also opined that the mandate would not be sustained under the Necessary and Proper Clause (found at Article One of the United States Constitution, section 8, clause 18), writing:
The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power and draw within its regulatory scope those who would otherwise be outside of it. Even if the individual mandate is “necessary” to the Affordable Care Act’s other reforms, such an expansion of federal power is not a “proper” means for making those reforms effective.
But the fact that the mandate wouldn’t stand under the Commerce or the Necessary and Proper Clause is not enough to block it: it need only be found constitutional under a leg of the Constitution. It was (tax), so it stands.
The second question is rendered moot. The Court didn’t feel the need to answer it since the first question was answered so the “if” part didn’t matter.
The answer to the third question is yes. The question specifically involves whether “ripeness” was an issue and whether a tax could be challenged in court before it was actually imposed since the health care law, as written, doesn’t actually call for penalties for non-compliance until 2014. Chief Justice Roberts pointed out that, again, words matter. He noted that the Tax Anti-Injunction Act specifically provides “those subject to a tax must first pay it and then sue for a refund.”
Interesting, right? Because here’s where things get tricky: Chief Justice Roberts says that Congress did not intend the payment to be treated as a “tax” for purposes of the Tax Anti-Injunction Act and therefore, the Anti-Injunction Act doesn’t bar this suit.
I know – you’re scratching your head at this point and maybe even scrolling back up to read. How can it be a tax for one purpose and not another? Here’s the distinction: the label matters for purposes of the Tax Anti-Injunction Act. But the label doesn’t “control whether an exaction is within Congress’s power to tax.” That question is based on “substance and application.” In other words, if it quacks like a duck and walks like a duck, it’s a duck.
Still confused? It’s bizarre, I know. But think of it this way: Congress wrote the Tax Anti-Injunction Act to be, ostensibly, exactly the way they wanted. As Chief Justice Roberts, wrote, “Where Congress uses certain language in one part of a statute and different language in another, it is generally presumed that Congress acts intentionally.” So the conclusion is that Congress wanted the Tax Anti-Injunction Act to apply to pure tax cases. So it does. And this isn’t one of those cases.
However, when it comes to the bigger question – is this law constitutional? – the Court is not restricted to one specific clause or interpretation. The Court must consider the bigger picture. Here, the Court determined that Congress had the authority to regulate tax and found that the mandate, as written, could be interpreted as a tax.
As to the final question, the Court ruled with a mixed bag. It found that the federal government cannot remove existing Medicaid funding if the states choose not to participate in the Act. However, there’s an out in the Act which allows states to expand their Medicaid coverage under the Act in exchange for new funds (assuming that they agree to the terms and conditions). States can opt to not participate but will, more or less, be forced to continue any existing plans with existing funding.
Whew, right?
The entire opinion can be found here (downloads as a pdf). It’s 193 pages as downloaded (about 110 if you were to print with “regular” margins) and there’s a lot of nuances here. I’ll be following up with a more detailed analysis later – once the dust has settled and I’ve thought this through again – but this is the quick and dirty version. More to come.
Your thoughts, generally?
