Supreme Court Upholds Most of the Affordable Care Act
The Supreme Court today in National Federation of Independent Business vs. Sebelius upheld the main provisions of the Patient Protection and Affordable Care Act (ACA), finding that Congress did not exceed their Constitutional authority in passing the legislation. Chief Justice Roberts joined Justices Bader Ginsburg, Breyer, Sotomayor and Kagan in forming the court’s majority. Justice Kennedy, thought by some to be the “swing vote,” sided with Scalia, Thomas, and Alito in dissenting to the upholding of the law.
The highly politicized debate leading up to the Court’s decision often touched on far reaching issues like the economic cost of the legislation and whether regulating health care is in the public’s best interests. The Court, however, does not reach those broad philosophical arguments. They had to decide on whether Congress’s decisions about how to address health care went beyond what is allowed by the U.S. Constitution. They were careful to point out that they are not necessarily endorsing the policies of The ACA. They wrote:
Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nations’ elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.
The Individual Mandate Upheld
The aspect of the law that raised the most controversy is the requirement for individuals to maintain health insurance or pay a “Shared Responsibility Payment.” The payment has been called a “fine,” a “penalty,” and a “tax.” The Court went beyond the term used and looked at the substance of the provision to find that three core elements make the payment a tax as opposed to a penalty or fine:
- The payment is not so prohibitively high as to absolutely require an individual to purchase health insurance
- The payment is not limited to willful violations
- The payment is collected solely through the Internal Revenue Service
The finding that the payment is in its application a tax is important because it then allowed the Court to find Congress had the authority, under the Taxation Clause, to enact such a tax.
The Court did not find that Congressional authority stemmed from the government’s ability to regulate interstate commerce under the Interstate Commerce Clause of the Constitution, as had been argued by the Government.
The Medicaid Expansion
Under the Affordable Care Act, in 2014, states must begin to expand their Medicaid programs by covering adults, including those without children, with incomes up to 133% of the federal poverty level. States failing to comply would forfeit federal Medicaid funds, which the Court noted, account for a large part of state budgets. The possibility of such a large forfeiture would, in effect, leave the states with no choice but to expand their programs. Therefore, the Court struck down the government’s ability to deny all Medicaid funding. The federal government may, however, withhold expansion funding for states that fail to expand their coverage as required under the law.
The Anti-Injunction Act
The Court also had to decide a technical issue, which determined whether they could decide the case now or would have to wait until fines were actually levied under the ACA. The Court quickly disposed of the issue, finding that they had the authority to decide the case.
In addition to the individual mandate, a number of provisions not addressed by this case remain intact. They include:
- Adults may keep a young adult insured under their policies until age 26. Millions of young adults have gained access to health care coverage under this provision.
- In 2014, insurance companies will not be able to deny or limit coverage or charge unrealistic rates based on pre-existing conditions.
- Small businesses with 50 or more employees will have to provide insurance coverage or pay fines. The National Federation of Independent Business was one of the main plaintiffs in the suit. But others in the small business community supported the ACA. The law provides tax credits to make coverage more affordable for individuals and businesses.
Many Republicans have threatened to dismantle the ACA regardless of today’s decision, so while this signifies a victory for the Administration, the fight has not ended. Some have likened it to the political struggle that ensued after the passage of Medicare, today a popular program. The White House quickly issued a statement asking Congress to join them in ensuring security and protection for everyone, including the Middle Class.
About the Author
Katherine Astrich is senior vice president of public policy and mobilization for the Alliance and UNCA.
She previously worked as a consultant for The Lewin Group, a national health and human services consulting firm. She has advocated for Medicaid, early education, and workforce assistance programs that benefit vulnerable children and families.
Her expertise includes regulatory and information collection policy. She also has eight years of experience working for the Office of Management and Budget. ... more
About the Author
Cecilia Fiermonte is director of child welfare policy at the Alliance. An attorney, she previously was assistant director at the American Bar Association Center on Children and the Law, advocating for policy change and providing training and technical assistance.
She also previously:
- Supervised the child welfare program of the County Attorney's Office in Wyoming County, N.Y.
- Worked in research and evaluation at the Quality Improvement Center on the Representation of Children
- Represented children in family court matters ... more