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Obamacare in the Supreme Court, 5-4 Decision on June 28, 2012


I. Summary II. History III. Court Hearing IV. Court Ruling V. Resources
I. Summary
The Nine Justices of the US Supreme Court.
Source: "Legal Experts Predict a Supreme Court Win for 'Obamacare,'" Los Angeles Times, Mar. 14, 2012
On Monday Mar. 26, 2012 the US Supreme Court heard the first of three days of arguments in a case against the Patient Protection and Affordable Care Act (PPACA) also known as "Obamacare."

The lawsuit was brought against the US Department of Health and Human Services by 26 states, the National Federation of Independent Business, and two individuals, Kaj Ahlburg and Mary Brown.

The original case, Florida v. Sebelius, was filed against the PPACA by Florida and 12 other states on Mar. 23, 2010. On Jan. 31, 2011 the District Court of Northern Florida found the PPACA to be unconstitutional. The case was appealed, and on Aug. 12, 2011 the 11th Circuit upheld the ruling (2-1) that the PPACA was unconstitutional. The case was again appealed, and on Nov. 14, 2011 the US Supreme Court agreed to hear the case.

The case heard by the Supreme Court on Mar. 26-28, 2012 dealt with four main issues (see section III. below): 1. the constitutionality of the individual mandate portion of the PPACA which requires people to buy health insurance or pay a penalty; 2. the PPACA's mandated expansion of Medicaid; 3. whether or not the remainder of the PPACA can stand if the mandate is ruled unconstitutional (severability); and 4. whether or not the law can even be challenged before it takes effect in 2014 (Anti-Injunction Act).

On Thursday June 28, 2012 the US Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act in a 5-4 ruling. The majority opinion (777 KB) was written by Chief Justice John Roberts and joined by Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. Justices Samuel Alito, Anthony Kennedy, Antonin Scalia, and Clarence Thomas dissented.
II. History
June 28, 2012 On June 28, 2012, the US Supreme Court ruled (5-4) (777 KB) that the Patient Protection and Affordable Care Act was constitutional.
Mar. 28, 2012 On Mar. 28, 2012, the court heard two and a half hours of arguments over two separate issues. The first 90 minutes of argument were on the issue of severability – whether or not the remainder of the PPACA can stand if the individual mandate to purchase insurance is ruled unconstitutional. The second hour of arguments discussed whether or not the mandated expansion of Medicaid under the PPACA is constitutional.
Mar. 27, 2012 On Mar. 27, 2012, the court heard two hours of arguments on the constitutionality of the mandate for individuals to purchase health insurance or face a fine. The central issue was whether or not the mandate was a constitutional use of federal power to regulate interstate commerce under the commerce clause of the US constitution.
Mar. 26, 2012 On Mar. 26, 2012, the first day of hearings, the court heard 90 minutes of arguments to decide whether or not the challenge to the individual health insurance mandate can even be heard before the law takes effect in 2014. The central issue was whether or not the fine imposed for not acquiring health insurance is in fact a tax. The Anti-Injunction Act (321 KB) [1] says that all taxes must first be paid before a person can challenge their legality in court.
Nov. 14, 2011 The United States Supreme Court agreed to decide (126 KB) whether or not the PPACA is constitutional.
Sep. 28, 2011 The Department of Health and Human Services filed a petition for writ of certiorari (196 KB) asking the Supreme Court to hear the case.
Aug. 12, 2011 A three-judge panel of the US Court of Appeals for the 11th Circuit ruled (2-1) (1 MB) to uphold the ruling of the US District Court of Northern Florida.
Jan. 31, 2011 The US District Court of Northern Florida ruled in the case Florida v. Sebelius (261 KB) that the PPACA was unconstitutional and violated article I of the Constitution, the Commerce Clause, and the Necessary and Proper Clause. The case was appealed.
Mar. 23, 2010 Just minutes after President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law, the state of Florida and 12 other states filed a lawsuit against the PPACA. The case was Florida v. Sebelius (187 KB) .
III. Court Hearing
Date Four Main Issues for the Court Attorneys Oral Arguments
Mar. 26, 2012 Anti-Injunction Act - "Whether the suit brought by respondents to challenge the minimum coverage provisions of the Patient Protection and Affordable Act is barred by the Anti-Injunction Act 26 U.S.C. §7421(A)." [2] For Court-appointed amicus curiae: Robert A. Long

For petitioners:
Donald B. Verrilli, Jr., Solicitor General

For respondents:
Gregory G. Katsas
Transcript - No. 11–398. Department of Health and Human Services, et al. v. Florida, et al (460 KB)

Audio - Mar. 26 file (40.7 MB)
Mar. 27, 2012 Individual Insurance Mandate - "Whether Congress had the power under Article I of the Constitution to enact the minimum coverage provision." [3] For petitioners: Donald B. Verrilli, Jr., Solicitor General

For respondents Florida, et al.: Paul D. Clement,

For respondents Natl. Fed. Ind. Business, et al.: Michael A. Carvin
Transcript - No. 11–398. Department of Health and Human Services, et al. v. Florida, et al (683 KB)

Audio - Mar. 27 file (54.7 MB)
Mar. 28, 2012 Severability - "The question presented is whether the ACA must be invalidated in its entirety because it is non-severable from the individual mandate that exceeds Congress' limited and enumerated powers under the Constitution." [4] For petitioners: Paul D. Clement

For respondents: Edwin S. Kneedler, Deputy Solicitor General

For Court-appointed amicus curiae: H. Bartow Farr, III,
Transcript - No. 11–393. National Federation of Independent Business, et al. v. Kathleen Sebelius, Secretary of Health and Human Services, et al (503 KB)

Transcript - No. 11–400. Florida, et al. v. Department of Health and Human Services, et al (503 KB)

Audio - Mar. 28 I file (41.4 MB)
Mar. 28, 2012 Medicaid Expansion - "Does Congress exceed its enumerated powers and violate basic principles of federalism when it coerces States into accepting onerous conditions that it could not impose directly by threatening to withhold all federal funding under the single largest grant-in-aid program, or does the limitation on Congress's spending power that this Court recognized in South Dakota v. Dole, 483 U.S. 203 (1987), no longer apply?" [5] For petitioners: Paul D. Clement

For respondents: Donald B. Verrilli, Jr., Solicitor General
Transcript - No. 11–400. Florida, et al. v. Department of Health and Human Services, et al (510 KB)

Audio - Mar. 28 II file (38.7 MB)

IV. Court Ruling:
On Thursday June 28, 2012 the US Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act in a 5-4 ruling. The majority opinion (777 KB) was written by Chief Justice John Roberts and joined by Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. Justices Samuel Alito, Anthony Kennedy, Antonin Scalia, and Clarence Thomas dissented.

The court's majority ruling states that the law's penalty for people who ignore the mandate to purchase health insurance was constitutional under Congress's constitutional power to levy taxes, but that the insurance mandate would not be a constitutional exercise of congress's power under the Commerce Clause of the US Constitution. In addition, the court ruled that the Anti-Injunction Act did not bar the court from hearing the case.

The expansion of Medicaid under "Obamacare" had a mixed ruling. The court found that it was unconstitutional for the federal government to withhold Medicaid funding to States that refused to expand their Medicaid systems but also ruled that the funding to expand Medicaid would remain available to states that chose to voluntarily participate.

The syllabus (pages 1-6) of the ruling included the following six points explaining how the court ruled on the issues:
1. Anti-Injunction Act:

"...[T]he Anti-Injunction Act does not bar this suit." (syllabus: page 2)

2. Individual mandate:

"...[T]he indi­vidual mandate is not a valid exercise of Congress’s power under the Commerce Clause and the Necessary and Proper Clause."
(syllabus: pages 2-3)
3. Individual mandate:

"...[T]he individ­ual mandate must be construed as imposing a tax on those who do not have health insurance..."
(syllabus: pages 3-4)
4. Individual mandate:

"...[T]he individual mandate may be upheld as within Congress’s power under the Taxing Clause."
(syllabus: page 4)
5. Medicaid expansion:

"...[T]he Medicaid expansion violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion."
(syllabus: pages 4-5)
6. Medicaid expansion:

"...Congress’ extension of Medicaid remains available to any State that affirms its willingness to participate." (syllabus: pages 5-6)

Quotations from the majority opinion and the dissent on the issue of the individual mandate:
In the three cases against the Patient Protection and Affordable Care Act (decided June 28, 2012), the US Supreme Court, in a 5-4 majority decision written by Chief Justice John G. Roberts, held that: Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito, US Supreme Court Justices, wrote in their June 28, 2012 jointly written dissenting opinion in the three cases against the Patient Protection and Affordable Care Act:

"The Government advances two theories for the proposition that Congress had constitutional authority to enact the individual mandate. First, the Government argues that Congress had the power to enact the mandate under the Commerce Clause… Second, the Government argues that if the commerce power does not support the mandate, we should nonetheless uphold it as an exercise of Congress’s power to tax.” (page 17)

"The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. 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.” (pages 20-21)

"The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress’s actions have reflected this understanding. There is no reason to depart from that understanding now.” (pages 24)

"The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to ‘regulate Commerce.’” (page 27)

"Because the Commerce Clause does not support the individual mandate, it is necessary to turn to the Government’s second argument: that the mandate may be upheld as within Congress’s enumerated power to 'lay and collect Taxes.' Art. I, §8, cl. 1.” (page 31)

"The joint dissenters argue that we cannot uphold §5000A [the individual mandate] as a tax because Congress did not ‘frame’ it as such… In effect, they contend that even if the Constitution permits Congress to do exactly what we interpret this statute to do, the law must be struck down because Congress used the wrong labels.” (page 39)

"The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” (page 44)

"Congress has set out to remedy the problem that the best health care is beyond the reach of many Americans who cannot afford it. It can assuredly do that, by exercis­ing the powers accorded to it under the Constitution. The question in this case, however, is whether the complex structures and provisions of the Patient Protection and Affordable Care Act (Affordable Care Act or ACA) go beyond those powers. We conclude that they do…” (page 1)

"The Act before us here exceeds federal power both in mandating the purchase of health insurance and in deny­ing non consenting States all Medicaid funding. These parts of the Act are central to its design and operation, and all the Act’s other provisions would not have been enacted without them. In our view it must follow that the entire statute is inoperative.” (pages 3-4)

"If this provision [the individual mandate] ‘regulates’ anything, it is the failure to maintain mini­mum essential coverage. One might argue that it regu­lates that failure by requiring it to be accompanied by payment of a penalty. But that failure - that abstention from commerce - is not ‘Commerce.’ To be sure, purchas­ing insurance is ‘Commerce’; but one does not regulate commerce that does not exist by compelling its existence.” (page 4)

"...Congress has attempted to regulate beyond the scope of its Commerce Clause authority, and §5000A [the individual mandate] is therefore invalid. The Government contends, however... that 'THE MINIMUM COVERAGE PROVISION IS INDEPENDENTLY AUTHORIZED BY CONGRESS’S TAXING POWER.'... The phrase 'independently authorized' suggests the existence of a creature never hitherto seen in the United States Reports: A penalty for constitutional purposes that is also a tax for constitutional purposes. In all our cases the two are mutually exclusive... The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so.” (pages 16-17)

"…[W]e cannot rewrite the statute to be what it is not… In this case, there is simply no way... to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty.” (page 18)

"…[T]o say that the Individual Man­date merely imposes a tax is not to interpret the statute but to rewrite it.” (page 24)

Full Text: US Supreme Court Ruling on the Patient Protection and Affordable Care Act (777 KB)
V. Resources:
A. History of the Individual Health Insurance Mandate, 1989-2010: Republican Origins of Democratic Health Care Provision
B. History of the Passage of the March 2010 Health Care Reform Laws
C. Patient Protection and Affordable Care Act - Section by Section
D. Calendar of What's Changing Under the Mar. 2010 Health Care Reforms
E. Landmark Entitlement Programs: Pro & Con Reactions at the Time of Their Passage
Sources:

1. Bryan Camp and Jordan Barry, "The Anti-Injunction Act Issue," www.americanbar.org (accessed Apr. 18, 2012)

2. American Bar Association, "11-398 Anti-Injuntcion Act," www.americanbar.org
(accessed Apr. 18, 2012)

3. American Bar Association, "11-398 Minimum Coverage," www.americanbar.org (accessed Apr. 18, 2012)

4. American Bar Association, "11-393 and 11-400 Severability," www.americanbar.org (accessed Apr. 18, 2012)

5. American Bar Association, "11-400 Medicaid," www.americanbar.org (accessed Apr. 18, 2012)