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U.S. Supreme Court Upholds Health Care Reform, a Major Victory for Obama and the Uninsured

| June 28, 2012

'This is a big fucking deal,' Joe Biden told President Obama the day he signed the health care law. It still is, the U.S. Supreme court ruled.

Last Updated: 1:53 p.m.

Chief Justice John Roberts joined the left of the U.S. Supreme Court in upholding the 2010 health care reform law, including the individual mandate. The Roberts ruling narrowed the allowance under tax rules, as opposed to the commerce clause. But virtually the entire law was upheld.

Click On:

The complete ruling is here, or below. (NPR has a particularly good, interactive reading of the opinion here.)

“Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it,” Roberts’s ruling reads.

The health care case before the court was framed as an answer to this question: Does it violate the Constitution for Congress to require virtually all Americans to obtain health insurance by 2014 or pay a penalty? That’s the individual mandate in question. If the answer is yes, the court had to decide whether the individual mandate alone is invalid, or whether the rest of the health care law must be ruled invalid as well. The most relevant parts of the health care law to most people affect insurance rules.

Unlikely liberal hero: Chief Justice John Roberts.

The answer was no: it does not violate the constitution. And it was Chief Justice Roberts, a George W. Bush appointee, who made the difference in the law’s favor, in a 5-4 decision. Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan joined the majority. Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito were in the minority.

Roberts cited Justice Oliver Wendell Holmes at one point: “[T]he rule issettled that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that whichwill save the Act.” But in subsequent days the analytical reasoning that gave Roberts’s opinion its legal grounding will most likely be compared to that of John Marshall who, in one of the most imaginative (and consequential) decisions in the court’s history, managed both to support a presidential prerogative while asserting the court’s supremacy (in Marbury vs. Madison).

The Affordable Health Act has nothing to do with the balance of powers. But as Roberts’s decision to join the majority is parsed for its motives, that element–the court’s transcendence of politics even as it asserts its power to define the politics of the moment–will be key in understanding the decision. There is an elegance to Roberts’s route: while most legal and political analysts obsessed over the constitutionality of the mandate under the commerce clause, he simply set it aside by declaring it unconstitutional within that scope, while doing what now appears obvious: no one ever said Congress doesn’t have the right to tax. It’s that clever, unforeseen crafting of the obvious that Roberts manages with the same astuteness Marshall did in Marbury. (Breyer, Kagan, Sotomayor and Ginsburg did not agree with Roberts’s reasoning, as they believe the act is constitutional under the commerce clause of the Constitution.)

Roberts went on: “The most straightforward reading of the mandate isthat it commands individuals to purchase insurance. After all, it states that individuals ‘shall’ maintain health insurance. 26 U. S. C. §5000A(a). Congress thought itcould enact such a command under the Commerce Clause, and the Government primarily defended the law on thatbasis. But, for the reasons explained above, the Commerce Clause does not give Congress that power. Under our precedent, it is therefore necessary to ask whether the Government’s alternative reading of the statute—that itonly imposes a tax on those without insurance—is a reasonable one.”

Roberts considers the mandate reasonable.

President Obama Speaks on the Court’s Decision

His explanation is lucid: “Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. [...] That, according to the Government,means the mandate can be regarded as establishing acondition—not owning health insurance—that triggers atax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance.Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, itmay be within Congress’s constitutional power to tax.”

But the court does not leave the door open for people not to pay the tax under the mandate, and therefore not comply with it. Congress may still impose a tax, and no taxpayer is ever allowed to evade a tax. A footnote in Roberts’s opinion, on page 44, clarifies the point: “Of course, individuals do not have a lawful choice not to pay a taxdue, and may sometimes face prosecution for failing to do so (although not for declining to make the shared responsibility payment. [...] But that does not show that the tax restricts the lawful choice whether to undertake or forgo the activity on which the taxis predicated. Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing they may not lawfully do is notbuy health insurance and not pay the resulting tax.”

From Amy Howe at Scotus Blog: “The Court holds that the mandate violates the Commerce Clause, but that doesn’t matter b/c there are five votes for the mandate to be constitutional under the taxing power.”

From Justice Kennedy’s dissent: “In our view, the entire Act before us is invalid in its entirety.”

Legal Analyst Stuart Taylor on the Ruling

The moment the law passed, it became illegal for insurance companies to cap policies’ lifetime payouts (which were typically capped at $1 million). The law also enabled parents to keep their children on their insurance policy until the children are 26. Beginning in 2014, the law forbids insurance companies from taking pre-existing conditions into account when writing policies. That means no one may be kept from being covered based on pre-existing conditions, nor could conditions be excluded from coverage, as they typically are under most policies today.

The law also will potentially cover some 50 million people without insurance, to the extent that they would be enabled to buy insurance–with government subsidies when they cannot afford the premiums–or become eligible for an expanded Medicaid, the health care program for the poor. A key passage in Roberts’s opinion, ratifying the legality of that Medicaid expansion: “Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.”

That’s not what the Obama administration was asking for. In other words Medicaid itself would have had to be expanded under the law, and states would have had to comply with the expansion. The ruling gives states the option either to go along with the Medicaid expansion, or to opt out of it (as Florida will), without suffering financial penalties. That’s a blow to Medicaid patients, who have already seen their benefits erode significantly over the years, particularly in southern states (and even more particularly in Florida), where government budgets have been balanced in part on the back of the poor through big cuts to Medicaid.

Only two justices would have upheld the Medicaid provision of the law (Ginsburg and Sotomayor).

Florida Attorney general Pam, Bondi on the Decision

Until the law’s passage in 2010, the United States was the only western democracy without universal health insurance. Mitt Romney, the Republican presidential nominee, has pledged to repeal the law if he’s elected. Republican groups intend to launch a major offensive against the law and use the court’s decision as a rallying cry in the campaign to unseat Obama. Republicans have not, however, presented an alternative. The thrust of the GOP claim against Obama and the law is that it imposes a new tax–and that Obama lied when he claimed, in defense of the law, that the health care mandate was not a tax.

Obama was not lying. He never said the mandate was “not a tax,” as Republicans (and some media) are portraying it.

the mandate results in an additional tax only for those who choose not to buy insurance. Most, especially the uninsured, for whom the law was designed, will never face a tax, but will benefit from subsidies in order to afford insurance. The number of people choosing not to be ensured, and not qualifying for subsidies, will presumably be relatively small–and wealthier than not.

More from Scotus Blog: “Justice Ginsburg makes clear that the vote is 5-4 on sustaining the mandate as a form of tax. Her opinion, for herself and Sotomayor, Breyer and Kagan, joins the key section of Roberts opinion on that point. She would go further and uphold the mandate under the Commerce Clause, which Roberts wouldn’t. Her opinion on Commerce does not control.”

From the Kennedy dissent: “What is absolutely clear, affirmed by thetext of the 1789 Constitution, by the Tenth Amendmentratified in 1791, and by innumerable cases of ours in the 220 years since, is that there are structural limits upon federal power—upon what it can prescribe with respect to private conduct, and upon what it can impose upon thesovereign States. Whatever may be the conceptual limitsupon the Commerce Clause and upon the power to taxand spend, they cannot be such as will enable the Federal Government to regulate all private conduct and to compel the States to function as administrators of federal programs.”

And at the concludion of the dissent: “The values that should have determined our course today are caution, minimalism, and the understanding thatthe Federal Government is one of limited powers. But the Court’s ruling undermines those values at every turn. In the name of restraint, it overreaches. In the name of constitutional avoidance, it creates new constitutional questions. In the name of cooperative federalism, it undermines state sovereignty.”

At 10 a.m. President Obama and Vice President Biden were at the White House, receiving the Presidential Daily Briefing. Obama’s only event today is a 2 p.m. visit to the Walter Reed National Military Medical Center. It’s not open to the press. But the White House has announced that Obama will be delivering some remarks within a couple of hours.

Michelle Bachman to CNN: “It really is a turning point in American history. We will never be the same again.” She calls Roberts’s tax argument “bizarre,” and a “black cloud on economic recovery.” Mitt Romney spoke at 11:53: “Obamacare was bad policy yesterday, it’s bad policy today.” He claims, falsely, that up to 20 million Americans who now have insurance will lose the insurance they have. (See Politifacts’s analysis of that claim here.)

US Supreme Court Ruling on Health Care Reform

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55 Responses for “U.S. Supreme Court Upholds Health Care Reform, a Major Victory for Obama and the Uninsured”

  1. Dorothea says:

    Republicans mantra for the day: “It’s a tax.” Like waving a red flag in front of a bull. Let’s hope that the majority of Americans aren’t dumb as bulls and believe all this empty rhetoric. For heaven’s sake read more about the benefits of the Affordable Care Act before you post a comment. Unless you are afraid that if you educate yourselves, you might actually approve of the ACA.


  2. Obama 2012 says:

    Dear Tea Party.. Please fight, march and go on Fox News and demand all the states pay back the millions of tax dollars that they have spent fighting Obamacare in local and federal courts. Those tax dollars that have been wasted have killed jobs and hurt our Economy. Talk about wasted Tax dollars.


  3. Biker says:

    Obama 2012- Obama Lied- “This is not a Tax” – He lied it is a tax.


  4. Umm says:

    I currently do not have health care because I cannot afford it. Come 2014, my income will not be changing so I will still not be able to afford it. Perhaps if they made health insurance premiums more affordable, I would be more inclined to purchase it. I think that if the government has this much control over us, it should work at controlling the cost of health care…that’s what they should have been doing in the first place. Make health care more affordable, not tax the person who can’t afford it!! Instead of “for the people, by the people” it should now read “for the government, mandated by the government”…


  5. question says:

    An even better HAPPY DANCE !!

    About 30 sec in on below video clip:


  6. Liana G. says:

    The supreme court just handed the 2012 election to the GOP! Yee Haw!!! Obama won’t be re-elected!!!!!!!!!!

    And now because my husband’s employer is based MD and we now live in NY, we are forced to pay the $600.00 monthly insurance premium for a family of 5. That’s freakin $7,200 a year that could have been put towards savings. Ron Paul 2012!!!!!!!! or Romney/Paul 2012!!!!!!


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