WASHINGTON — In deciding to uphold the constitutionality of President Barack Obama’s health care reforms, the US Supreme Court had to decide on four issues:
1. Is the individual mandate a “tax” or a “penalty”?
At the heart of the Patient Protection and Affordable Care Act, dubbed “Obamacare” by critics, lies the individual mandate that requires every US citizen from 2014 to take out health insurance or be subject to a fine.
Before reaching a decision on the constitutionality of the individual mandate, the court had to decide whether an arcane law called the federal Anti-Injunction Act prevented it from doing so at this time.
The decision hinged on whether the fine for not taking out health insurance constituted a “tax” or a “penalty.”
If the court decided the fine was a “tax,” it would not have had jurisdiction to rule until the “tax” had been collected and assessed, some time in 2015.
“Congress, however, chose to describe the ‘shared responsibility payment’ imposed on those who forego health insurance not as a ‘tax,’ but as a ‘penalty,'” Chief Justice John Roberts wrote in dismissing this case.
“There is no immediate reason to think that a statute applying to ‘any tax’ would apply to a ‘penalty,'” Roberts wrote, proceeding to the other key decisions.
2. Is the individual mandate constitutional?
Article 1, Section 8, Clause 3 of the constitution gives Congress authority “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”
The Obama administration said the clause validated the individual mandate, but Florida and 25 other supporting states claimed it didn’t because the mandate forced people to buy something.
“If they can force you to buy health insurance, they can force you to buy a car, asparagus, a gym membership,” Ken Cuccinelli, Republican attorney general for Virginia, told AFP.
Opponents of the law said a decision to not purchase health insurance constitutes inactivity so it did not count as interstate commerce and was not subject to the Commerce Clause.
The Supreme Court justices agreed, saying: “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.'”
But, and a massive but as it turned out, the Obama administration offered a second avenue to the Supreme Court to uphold the individual mandate.
It argued that if the commerce clause did not support the law, it should nonetheless be upheld as an “exercise of Congress’s power to tax.”
It was this second option that proved crucial as it was accepted by a 5-4 majority of Supreme Court justices, allowing the law to be upheld.
“It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without insurance. Such legislation is within Congress’ power to tax,” Roberts wrote.
The Obama administration had argued that because everyone uses health care at some point, Congress was within its rights to require people to buy insurance to limit the costs imposed on the system by the uninsured.
3. If the individual mandate goes is the whole law doomed?
If the Supreme Court had declared the individual mandate unconstitutional, it would then have had to decide whether the rest of the law could function without it.
This proved a moot point.
4. Is the law’s expansion of Medicaid constitutional?
The law also expands the Medicaid health program for low-income families.
States have to cover people under 65 whose household incomes are below a certain level, expanding coverage to an estimated 16 million uninsured, poor Americans, according to the non-partisan Congressional Budget Office.
Opponents argued this expansion was unconstitutional as it coerced states to provide coverage to this new group by threatening to withhold federal Medicaid funds.
The Obama administration argued that Congress has the constitutional power to attach conditions to the release of federal funds. It also said Congress had reserved the right to amend Medicaid, pointing out that the program had been repeatedly expanded over the years.
In the end, justices opted for a half-way house ruling, allowing the expansion to go ahead but ordering the government to remove the threat to withhold funds.