Supreme Court Upholds Obamacare in Full

7-2 decision likely an end to battle over health care law

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June 17, 2021

The Supreme Court on Thursday again upheld the entirety of the Affordable Care Act, rebuffing a constitutional attack on the law from a group of red states backed by the Trump administration. 

The vote was 7-2, with Justice Stephen Breyer delivering the Court’s opinion over the dissent of Justices Samuel Alito and Neil Gorsuch. The Court said the red state coalition has no legal basis, or standing, for challenging the law. The decision means there will be no changes for enrollees, and the law’s most popular provisions, including coverage for people with preexisting conditions, will remain in place. 

"In a word, they have not shown that any kind of government action or conduct has caused or will cause the injury they attribute to the law," the decision reads. 

Thursday’s decision is likely the bookend to a decade of political struggle over the Affordable Care Act. The case is the third direct attack on Obamacare the Supreme Court has encountered, and the third time it’s refused to strike the ACA down. Changes to the Court’s personnel were not enough to bolster the red state lawsuit. Justices Brett Kavanaugh and Amy Coney Barrett both joined the majority opinion tossing the case on standing grounds, despite warnings from Democrats that their confirmations would imperil insurance coverage for millions.

President Joe Biden praised the Court's decision, adding that it was time for the nation to "move forward."

"After more than a decade of attacks on the ACA through the Congress & the courts, today’s decision—the third major challenge to the law that the U.S. Supreme Court has rejected—it is time move forward and keep building on this landmark law."

The last major attack on the mandate came in 2012, when a coalition of businesses argued Congress had no power to compel people to buy health insurance. The Supreme Court disagreed in a five-to-four ruling, saying the mandate was authorized by Congress’ taxing power. Thursday’s case was born of the 2017 Republican tax law signed by former president Donald Trump. The Tax Cut and Jobs Act "zeroed out" the mandate to buy health insurance by setting the financial penalty for noncompliance at zero dollars. 

A coalition of red states led by Texas, plus a few individuals, brought a new legal challenge to the ACA based on that change. The plaintiffs argued that the mandate cannot be sustained as a tax if it isn’t raising revenue for the government and ought to be struck down. Because the mandate is central to the law’s design, they argued the entire statute should be invalidated as well. 

Chief Justice John Roberts said the case was something of a set up during oral arguments in November. Unable to muster the votes for outright repeal of the ACA, he said the 2017 Republican Congress gutted the mandate in hopes the Court would scuttle it along with the rest of the health care law. 

"I think, frankly, that they wanted the Court to do that," Roberts said. "But that's not our job."

Texas argued the states have standing because the mandate saddles them with additional costs. Residents complying with the mandate could, the state said, enroll in public insurance programs like Medicaid, creating new program and administrative expenses the states must finance.

The Court said that theory was too speculative. It isn’t obvious that a non-coercive mandate will drive enrollments, given the many benefits public insurance offers, the Court said. Those benefits run the spectrum from COVID testing to hospice care.

"The states have not demonstrated that an unenforceable mandate will cause their residents to enroll in valuable benefits programs that they would otherwise forgo," Breyer wrote. "It would require far stronger evidence than the States have offered here to support their counterintuitive theory of standing."

Chief Justice John Roberts and Justices Clarence Thomas, Sonia Sotomayor, Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett joined Breyer’s opinion.

Alito and Gorsuch broke with the rest of the Court, arguing the states have standing because the mandate is inseparable from the rest of the ACA, which contains numerous other provisions that burden the states.

"Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two," Alito wrote. "In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue."

The lawsuit met success in the lower courts. A federal trial judge ruled for the red state plaintiffs and declared the entire law unconstitutional in 2018. The Fifth U.S. Circuit Court of Appeals upheld that decision in part. The appeals court agreed that the mandate is unconstitutional because of the tax law, but it directed the district court to reconsider whether the entire statute should be struck down as a result. 

In a highly unusual move, the Trump Justice Department refused to defend the ACA in court. The Justice Department defends federal laws in court in virtually every instance, unless no reasonable argument can be made on its behalf. The department reversed course again after President Joe Biden took office and submitted a supplementary letter asking the justices to uphold the ACA in full. Flipping sides is a disfavored practice in the Supreme Court, but the move was expected because Biden promised to protect and expand Obamacare as a candidate. 

California led a coalition of blue states who defended the ACA in court after the Justice Department declined to do so. 

About 12 million Americans are insured through the ACA’s Medicaid expansion program. Another eight million use tax credits to buy health insurance through Obamacare exchanges. Biden favors adding a public option that would let enrollees buy a government-run health care plan. 

The case is No. 20-1019 Texas v. California.


Update 1:15 p.m.: This article has been updated to include additional context.

Published under: Obamacare , Supreme Court