The Future of the "Affordable Care Act"


ACRU Staff


July 11, 2012

This piece is by John McClaughry, Vice President of the Ethan Allen Institute, a member of the CCPP Policy Board and former senior policy advisor to President Reagan.

The Supreme Court has now issued its startling ruling on the Patient Protection and Affordable Care Act (aka ObamaCare).

Four liberal justices ardently believe, with President Obama, that the constitutional power to regulate commerce authorizes Congress to require individuals to purchase government-approved health insurance, or suffer a monetary penalty for minding their own business.

Five conservative justices believe that the commerce power cannot be stretched to authorize any such penalty.

Four of these five believe that the entire act – enacted without a severability clause – should be invalidated.

One of these five – Chief Justice Roberts – believes that the government that argued the case for the commerce power expansion that he resoundingly rejected has nonetheless shown that the law passes constitutional muster as an exercise of the taxing power, which the government barely mentioned in its briefs and oral argument.

To avoid throwing out the entire case under the Anti-Injunction Act (which prevents litigating a tax until it is actually applied), the Chief Justice decreed that the individual mandate carries a penalty for unlawful acts, and is thus not a tax to raise revenue for the support of the government.

Then, with the case safely before the Court, the same Chief Justice rewrote the ACA into a tax law that Congress did not pass, the President emphatically rejected, and the Solicitor General failed even to discuss until he offered 21 lines of text in reply to another party’s Supreme Court brief.

Then the Chief Justice triumphantly upheld his newly invented law, decreeing that an individual’s failure to buy government-approved health insurance triggers not a penalty but a new tax, and thus is within the power of Congress to levy taxes.

As the four conservative justices pointed out, in so many words, this sort of sophistry gives judicial activism a bad name. Meanwhile, the four liberal justices, clearly furious at the Chief Justice’s rejection of their beloved commerce power rationale, nonetheless joined his opinion based on the taxing power as the only way of keeping their equally beloved ACA alive.

Meanwhile, seven justices – the Chief Justice, the four conservatives, and two of the liberals – held that the power of Congress to spend money does not extend to the point of demanding that the states produce billions of dollars to expand Medicaid spending beyond its present levels, or lose all current Federal matching money. Exactly how far Washington can go before reaching the point of “too far” remains to be seen on a case by case basis, which is not reassuring.

Politically, what happened beginning in 2009 was this: first the House passed a bill taxing failure to purchase government-approved health insurance. But then Obama and the Democratic Senate got cold feet about creating a new federal tax likely to be very unpopular.

So the Senate converted the House-passed tax bill to a regulatory measure based on the commerce power. Obama then went on national television to say he “absolutely rejects” the charge that his individual health insurance mandate – which became the Affordable Care Act – was a tax.

But it soon became clear to Obama that the commerce power mandate wouldn’t survive a Constitutional challenge. Suddenly, as the Justice Department defended the ACA in the Florida case, the administration began to recast the mandate as a tax.

When oral argument in the Supreme Court in March strongly indicated that five justices wouldn’t buy his commerce power argument, Obama and his political and media allies (notably including Sen. Patrick Leahy) launched a campaign to intimidate the Chief Justice into “preserving the integrity and legitimacy of his court” by upholding the ACA. The Chief Justice, for reasons still not known, caved in to the pressure, switched sides, struck down the commerce power expansion, but seized on the little-noticed taxing power argument to keep the ACA alive.

The upshot is that, thanks to the Chief Justice’s excursion into judicial never never land in an almost certainly vain attempt to improve his reputation as Chief Justice, America now has a new federal tax on personal behavior that Congress never enacted, at least as a tax.

A responsible Justice, faithful to his duty to interpret the constitution, ought to have struck down the commerce power expansion, refused to consider the ACA as a tax measure until actually applied to a taxpayer (per the Anti-Injunction Act), noted that the ACA’s provisions were not declared severable, and tossed out the whole law.

Then Congress and President would be free to pass a new ACA founded on the taxing power, impose the tax on someone, and defend it against constitutional challenge.

It may or may not be within the constitutional power of Congress to tax an individual for declining to buy government-approved health insurance. Whether such a tax would be a direct tax (that must be apportioned among the states) deserves argument. In any case, as the four conservative justices wrote, “one would expect this Court to demand more than fly-by-night briefing and argument before deciding a difficult constitutional question of first impression.”

The Court has spoken, albeit with quadruply forked tongue. Now the issue comes before the voters in November. The ACA, which remarkably avoided interment by the apostasy of one Justice, is still likely to have a very rocky future.



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