(By NCrissie B)
The media reporting a 5-4 Supreme Court decision upholding the Affordable Care Act is not wrong, but it’s not exactly right either. In their 193-page decision, the Court weighed several issues: whether the case was premature under the Tax Anti-Injunction Act, whether the individual mandate was authorized by the Commerce, Necessary and Proper, or Taxing and Spending Clauses, and whether the Medicaid expansion was a legitimate inducement or an unconstitutional coercion of state action. The votes were different on each issue, and those differences may be significant in future cases.
Was the case premature under the Tax Anti-Injunction Act? NO (9-0)
The Tax Anti-Injunction Act (TAIA), first passed in 1867 and reenacted in 1954, prohibits courts from blocking the collection of taxes enacted by Congress. Instead, individuals must first pay the tax. Then, if they have legal grounds to object, they may petition the IRS for a refund and file a lawsuit if the IRS does not respond. Thus, a tax cannot be challenged in court until it has been paid.
As mechanism for enforcing the individual mandate is a “penalty” paid to the IRS, and as neither the mandate nor the “penalty” take effect until 2014, no one has yet paid that “penalty.” Some legal scholars argued that – because the “penalty” looks a lot like a “tax” – the individual mandate could not be challenged until the “tax” was due and paid, in 2014. The Obama administration did not raise this defense, but the Court solicited briefs from other parties and considered the issue.
– Chief Justice Roberts held that as the TAIA was enacted by Congress, Congress has the authority to decide whether the TAIA will apply to a law. Congress expresses such decisions by using or not using “tax” and related words in drafting a law. As Congress did not term the individual mandate “penalty” a “tax” – Chief Justice Roberts held – Congress did not intend the TAIA to apply to that provision and the challenges to the ACA were not premature. No Justices dissented.
Was the individual mandate authorized by the Commerce, Necessary and Proper, or Taxing and Spending Clauses? NO (1-3-1-4), NO (5-4), YES (5-4)
The Obama administration claimed the individual mandate was authorized by the Commerce Clause, the Necessary and Proper Clause, and/or the Taxing and Spending Clause. Note that the Court did not have to find the individual mandate was authorized by all three or even two of these three clauses. Any one would suffice. The Court split differently on each clause:
- Commerce Clause: NO (1-3-1-4)– Chief Justice Roberts held that while Congress has long regulated the supply of goods and services, Congress may not regulate the demand for goods and services under the Commerce Clause. That is, Congress may regulate market “activity,” but not market “inactivity.” Contrary to some media reports, Chief Justice Roberts did not “narrow” Congress’ authority under the Commerce Clause. He simply refused to expand that authority to cover demand or “inactivity.”
– Justices Scalia, Kennedy, and Alito concurred, making essentially the same argument (but with more mentions of broccoli).
–Justice Thomas concurred in a separate opinion that would have narrowed Congress’ authority under the Commerce Clause.
– Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented, writing that almost everyone buys health care at some point, either through health insurance or “self-insurance.” Thus, they argued, almost everyone “participates in” the health care market and Congress may regulate that under the Commerce Clause.
- Necessary and Proper Clause: NO (5-4)– Chief Justice Roberts, joined by Justices Scalia, Kennedy, Thomas, and Alito in a separate opinion, held that the Necessary and Proper Clause could not stand alone to authorize an act of Congress that was not authorized under another provision of the Constitution. It was not, in Chief Justice Roberts’ wording, a “by any means necessary” provision.
– Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented, arguing that the guaranteed issue and community rating provisions of the ACA would fail without the individual mandate, thus the mandate was “necessary and proper.”
- Taxing and Spending Clause: YES (5-4)– Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan, held that the individual mandate could reasonably be read to establish a tax for people who did not buy health insurance. While Congress did not invoke the TAIA by calling the “shared responsibility fee” a tax, Chief Justice Roberts held that the TAIA issue was a statutory decision of Congress, while the Taxing and Spending Clause issue was a separate constitutional decision for the Court.
– Justices Scalia, Kennedy, Thomas, and Alito dissented, arguing the Court must either find the “penalty” or “shared responsibility fee” was a “tax” (making the entire case premature under the TAIA) or was not a “tax” (making the individual mandate unconstitutional).
– Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan held that because the individual mandate was constitutional under the Taxing and Spending Clause, there was no need to consider whether the rest of the ACA could survive without the mandate.
– Justices Scalia, Kennedy, Thomas, and Alito dissented, arguing that Congress had not specified that the rest of the ACA could be upheld without the individual mandate, and indeed that the rest of the ACA would be unworkable without the mandate. They would have overturned the entire ACA.
Did the Medicaid expansion induce or coerce state action? PENALTY NARROWED: 3-2-4
– Chief Justice Roberts, joined by Justices Breyer and Kagan, held that the Medicaid expansion provision – which would have withheld all of Medicaid funding unless a state expanded Medicaid eligibility to all adults earning less than 133% of the federal poverty level – was indeed unconstitutionally coercive. Cutting off all federal Medicaid funds to states that did not expand eligibility would have gutted their budgets, forcing them to end existing Medicaid programs, raise taxes to make up for lost federal funding, or cut other state programs. However, they held that the provision was constitutional if read to apply only to new federal funds designated for expanded Medicaid eligibility, and thus they interpreted the provision that way.
– Justices Ginsburg and Sotomayor dissented in part, arguing that the Medicaid expansion provision was an inducement similar to previous federal changes in Medicaid, and concurred in part, accepting Chief Justice Roberts’ remedy.
– Justices Scalia, Kennedy, Thomas, and Alito concurred in part, agreeing that the Medicaid expansion was coercive rather than an inducement, and dissented in part, arguing the only remedy was to strike the entire Medicaid expansion provision.
Tomorrow we’ll discuss what the decision means – and what it doesn’t – for the future of the ACA, Medicaid, and the Commerce Clause.