The content and context of the Supreme Court’s decision on the ACA

Last week, the US Supreme Court announced the Affordable Care Act would survive one more major court challenge.

In a 7-2 vote, with Justice Stephen Breyer writing the opinion, the Supreme Court threw out the claims brought by the State of Texas et al. In somewhat circuitous logic, Texas argued two injuries from the ACA, both brought on by the individual mandate and its enforcement penalty.

 

 

Texas claimed direct injury “resulting from a variety of increased administrative and related expenses” from the individual mandate. It also claimed indirect injury from the mandate as a result of increased costs to Medicaid and other state-run insurance programs.

However, recall that in 2017, Congressional Republicans used the budget reconciliation process to lower the enforcement penalty to zero. This removed the enforcement mechanism of the mandate, which became critical in the Court’s decision.

From Justice Breyer:

“Neither logic nor evidence suggests that an unenforceable mandate will cause state residents to enroll in valuable benefits programs that they would otherwise forgo. It would require far stronger evidence than the States have offered here to support their counterintuitive theory of standing…

…Here no unlawful Government action “fairly traceable” to (the individual mandate) caused the plaintiffs’ pocketbook harm. Here,
there is no action—actual or threatened—whatsoever. There is only the statute’s textually unenforceable language.”

Even the conservative Justice Clarence Thomas writes a concurring opinion as part of the 7-2 majority, finding no harm was inflicted.

“The plaintiffs failed to demonstrate that the harm they suffered is traceable to unlawful conduct. Although this Court has erred twice before in cases involving the Affordable Care Act, it does not err today.”

Standing occurs when harm has been actually inflicted, when a wrong has been committed. One has standing to bring a case before the court system as a result.

With a mandate penalty set at zero by Congressional Republicans, it meant the Republican Attorneys General no longer could claim standing. The Court said there was not any harm to which the plaintiffs could point — and therefore the Constitutional questions before the Court’s 6-3 conservative majority would not be heard.

The case was dismissed with a stroke of unintended irony.

 

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This marks the third time when the Supreme Court, led by Chief Justice John Roberts, used creative logic to cobble together a majority that would keep the ACA on the books, at least in part.

It is what Justice Samuel Alito wrote in his dissent:

“Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two. In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue.”

He has a point.

In the first major case against the ACA, NFIB v Sebelius, the Roberts Court built a creative logic and wrote some of its own health policy into the ACA.

For example, the Obama administration argued that the individual mandate penalty was an act by Congress to regulate interstate commerce, something that is expressly within Congress’s power.

The Court denied that claim, rejecting the logic in part because health care insurance is primarily a state-regulated and state-based regime.

However, the Court came up with a new conclusion, one not argued by the Obama administration: that the penalty is not a penalty; the penalty is actually a tax. And, as a tax, the penalty for not having insurance (known as the individual mandate enforcement mechanism) is also expressly within Congress’s powers.

Note in later cases, the penalty is generally referred to as a penalty rather than a tax, but in NFIB, it was a tax.

The Court in NFIB also said the federal government was different from states and had to respect the states’ rights to manage Medicaid. In the original passage of the ACA, Medicaid expansion was not voluntary. All states were compelled to expand Medicaid. In Roberts’s opinion in NFIB, he made expansion a voluntary choice for states, and that the federal government could not compel state action.

That’s relevant for the next key case, King v Burwell.

In King, the question was regarding the ACA’s language saying that premium supports for the insurance exchanges were to be distributed in “state” based insurance exchanges. Congress imagined that the states would set up these marketplaces, and some did. Not every state did, however. So, do those states with federally-operated exchanges still have the benefit of premium supports if the state isn’t operating the exchange?

Yes, they did, the Court opined. As Justice Alito writes in Texas about that King decision:

“Once again, some feared that the Act was in mortal danger, but the Court came to the rescue by finding that the Federal Government is a ‘State.’”

Another reasonable but innovative conclusion.

In this third installment of the ACA trilogy, Texas v California, Roberts’s Court is able to sidestep the constitutional questions altogether by finding the plaintiff states do not have standing because they cannot trace any harm from the individual mandate provision on which their case rests.

Constitutional questions were therefore not taken up by the Court, averting perhaps a majority opinion that might revoke some or all of the ACA. It is, after all, a 6-3 conservative majority.

This time, however, those questions will need to wait for a new challenge.

Today in 2021, at the conclusion of this three-part trilogy, the ACA remains just as it was following Roberts’ opinion in NFIB in 2012. We’ll see if the Court gets to write any more volumes in this American saga, or if the last word on the ACA’s constitutionality has been written.