In one of the most controversial and closely watched cases in decades, the U.S. Supreme Court, by a 5-4 vote, upheld the constitutionality of most of the Patient Protection and Affordable Care Act, President Barack Obama’s signature legislative accomplishment. In the most notable part of the decision, the Court upheld the act’s mandate requiring individuals to purchase health insurance or pay a penalty.
The majority opinion, written by Chief Justice John Roberts Jr., first found that the Anti-Injunction Act, which prohibits court challenges to taxes until the tax has actually been paid, did not bar the challenge to the individual mandate, since Congress did not intend the mandate to be a tax for the purposes of the Anti-Injunction Act, but rather intended it to be a penalty.
Addressing the individual mandate itself, the chief justice found that it was not a valid exercise of Congress’ power under either the commerce clause or the necessary and proper clause. His opinion noted that while Congress has expansive power under the commerce clause to regulate what people do, sustaining the mandate under the commerce clause would give Congress inappropriate authority to regulate what people do not do. He reasoned that, while the framers of the Constitution gave Congress the power to regulate commerce, this does not extend to compelling people to engage in commerce.
The chief justice then accepted the Obama administration’s alternative argument that the individual mandate is authorized by Congress’ taxing authority under the Constitution. He concluded that the act can be read as imposing a penalty on those who choose not to purchase health insurance.
Lastly, the court found that while Congress could encourage states to expand their Medicaid programs, the Medicaid provision threatening states with the loss of their existing Medicaid funding if they refuse to go along with such an expansion was coercion, and an unconstitutional intrusion on the sovereignty of the states.
The alignment of the justices on parts of the opinion is as interesting as the content of the opinion itself. Justices Anthony Kennedy, Antonin Scalia, Clarence Thomas and Samuel Alito dissented, finding the entire law unconstitutional. While Justices Ruth Bader Ginsberg, Stephen Breyer, Sonia Sotamayor and Elana Kagan joined the chief justice in upholding the individual mandate, they dissented from his conclusion that the mandate is not supported by the commerce clause. Thus, a five-justice majority concluded that Congress could not use the commerce clause to regulate economic inactivity, thereby effectively limiting the power of Congress under the commerce clause, as well as furnishing a potential basis for challenging existing and future laws relying upon the commerce clause.
The highest court has now spoken, and implementation of the bulk of the enormously complex Affordable Care Act can continue. The future of the act is no longer in the judicial arena, but is now in the hands of Congress, and the voters this November.
Francis J. Serbaroli is a shareholder in Greenberg Traurig.