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Health and taxes

Supreme Court upholds Obamacare but may have opened financial and political floodgates

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Health and taxes
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WASHINGTON-Congressional cat fights, a "Cornhusker Kickback," a 2,700 page law, a Tea Party backlash, several circuit court rulings, and six hours of oral arguments later, the Supreme Court on June 28 gave the final legal word on a law that has consumed national dialogue since 2009.

Outside the high court was all sweat from 100 degree temperatures and noise from drums, shouting, megaphones, and music. Inside the courtroom, for five minutes before the nine justices entered, there was a tense silence as the audience waited. No cell phones are allowed in the room-or anything beyond a pen and the clothes on your back-so everyone sat still and felt the suspense grow.

The court announced that it had left the Affordable Care Act of 2010 largely intact, thanks to the alliance that few predicted of Chief Justice John Roberts and the liberal bloc of the court: Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan.

But Roberts, penning the majority opinion, limited the ruling to say that Congress had the power to tax, and the individual mandate's penalty for not having health insurance counted as a tax increase. The court declared the individual mandate unconstitutional under the Commerce Clause, because Roberts said Congress can't create activity to regulate it. But the mandate faced two questions: whether it was constitutional under the Commerce Clause and under Congress' power to tax. It only had to survive one of those questions for the court to uphold it.

At the beginning of his opinion Roberts outlined the role of the court: he noted that the court was not ruling on the "wisdom or fairness" of the mandate's tax for not buying insurance. "It is not our job to save the people from the consequences of their political choices," he said.

Casey Mattox, a lawyer for the Alliance Defense Fund (ADF), attended the healthcare arguments in March and stood in a suit on the hot steps of the court after the decision. ADF is working on cases challenging the contraceptive mandate, a part of the law that the Supreme Court was not addressing in these cases. He disputed Roberts' assertion that the penalty was a tax and therefore was under Congress' prerogative. "Congress when they were passing the bill said, 'This is not a tax,'" he said. "Political accountability works only when you can have accountability."

The court by a 7-2 vote did limit the law's expansion of Medicaid, saying that the federal government could offer additional funds to states to expand coverage but could not threaten the rest of the states' Medicaid funding if the states don't accept the extra funds. This has the potential to raise the cost of the law significantly, depending on how many states opt out: In those states, persons who would have been insured by the Medicaid expansion will instead get more expensive federally subsidized private insurance.

The ruling could have gone so differently. The dissenting bloc of Justices Anthony Kennedy (who most observers focused on during the arguments as the swing vote), Antonin Scalia, Clarence Thomas, and Samuel Alito wrote that they would have nullified the entire law as unconstitutional. They would do that on the grounds that the individual mandate was unconstitutional, and that it was the heart of the law and could not be "severed" without taking the rest of the law down with it. Kennedy read the close of his dissent in court with an atypical weariness. He said the majority was guilty of "vast judicial overreaching." Now the healthcare law is "a distorted version of the act-decreed by the court and no one else."

President Obama and his administration celebrated the ruling on Thursday, but Mitt Romney might gain the most from it. As the court recessed for its term, Solicitor General Donald Verrilli Jr. patted the back of Martin Lederman, a top lawyer until recently for President Obama's Office of Legal Counsel. That afternoon, the Romney campaign announced that it had raised $1 million in the two hours since the decision.


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