June 28, 2012 14:54 Age: 2 yrs

Professor Buzbee Writes on Supreme Court’s Affordable Care Act Ruling

William W. Buzbee

The Supreme Court’s ruling today upheld the Affordable Care Act. Chief Justice John Roberts joined the more liberal wing of the Court (Justices Stephen Breyer, Ruth Ginsburg, Elena Kagan, and Sonia Sotomayor), finding that Congress had power to pass this law under its broad tax power.

Much of the focus in briefs, argument, and press about this case centered on whether Congress had power under the Constitution’s Commerce Clause to enact the “individual mandate” that subjected individuals who did not acquire health insurance in the market to a penalty. Opponents of the law objected to the government compelling entry into private markets. Supporters countered that the law fell well within authority upheld in dozens of Supreme Court decisions over about 70 years that broadly construed Congress’s power to pass laws to address actions, especially economic actions, with interstate commerce effects.

But that was not the only grounds for upholding the law. The penalty was enforced through the Internal Revenue Service, and several of the health law’s provisions were integrated into the Internal Revenue Code. This was important because Congress has another source of power under the Constitution’s grant of power to “lay and collect Taxes, Duties, Imposts and Excises.” And this ended up the focus of the Court’s decision, with a five justice majority seeing this law and case as like many, many others that have broadly construed the federal government’s taxing power. If an individual does not enter the health market (and earns enough income to pay taxes), the individual is subject to the penalty. And that penalty is a tax, whether Congress used the word “tax” or not. And that taxing power justifies the individual mandate. Therefore, the law’s key provision is upheld and the law stands.

A majority of seven justices did agree on another important result, but there was no single opinion on this point. The Court struck down Congress’s effort to withhold all federal Medicaid funds flowing to a state if a state did not comply with its obligations under the new health law. While the justices did not join in one opinion explaining why that was, seven justices agreed that Congress crossed the line from permissible inducements long allowed under the Constitution’s Spending Power Clause, to impermissible coercion. Chief Justice Roberts highlighted that as much as 10 percent to 16 percent of some states’ budgets are from federal Medicaid funding. It appears that Congress simply threatened the states too much. More tailored inducements would likely be upheld. It appears that a majority agrees that Congress could withhold new funds to states linked to the Affordable Care Act’s efforts to expand coverage for Americans. A different majority agrees that Congress could not threaten to take away all Medicaid funds.

The alignment of the justices will get a great deal of scrutiny. Chief Justice Roberts joined justices with whom he usually clashes. He plus four made the majority upholding the tax power authority, but the Court otherwise was divided. The four more liberal justices would also have upheld the law under the Commerce Clause and Necessary and Proper Clause, while the four conservative dissenters thought the government lacked power under any constitutional provision. Chief Justice Robert’s willingness to go against his conservative colleagues and a strong Republican Party attack on the health law will likely enhance his reputation for independence, despite his overall voting record which has been strongly aligned with his usual conservative colleagues on the bench.

Longer term, the opinions in the case are likely to shift arguments on several important constitutional questions, but due to the complicated alignments of the justices in their opinions, future opinions and arguments are far from clear. For example, the four conservative justices (Scalia, Kennedy, Thomas, and Alito) reached results aligned with Chief Justice Roberts that Congress did not have power to impose the individual mandate under the Commerce Clause, and that Congress also could not do so under usually broad power to regulate under the Constitution’s “necessary and proper clause.” In future cases, advocates will likely use points of agreement among these justices’ opinions to argue that the law has shifted. Opponents of such a move will focus on the lack of a shared opinion, and also seek to limit the various opinions’ language to the factual setting of this case. The same holds true in figuring out where the permissible line stands under Congress’ power to induce states to act under its Spending Power. Congress went too far here, but the new line between permissible and impermissible is not clear.  

Professor Buzbee teaches and writes on issues of constitutional law, federalism, legislation and regulation, and environmental law. He is the editor and a contributor
to Preemption Choice: The Theory, Law, and Reality of Federalism’s Core Question (Cambridge U. Press 2009). He has also worked on Supreme Court federalism cases and testified before Congress regarding Supreme Court decisions and the reach of the federal power. He co-directs Emory’s Center on Federalism and Intersystemic Governance, and is also a member-scholar of the regulatory think tank the Center for Progressive Reform

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