Thursday, June 28, 2012

Breaking News-Supreme Court Decision on Obamacare *UPDATED w/ BREAKDOWN*

The US Supreme Court ruled in a decision released today that the individual mandate is constitutional and falls under the power to tax.  This post will be updated in the next hour as links to opinion and dissent(s) become available.
In a victory for President Obama, the Supreme Court decided to uphold his signature health care law's individual mandate in a split decision, upending speculation after hostile-seeming oral arguments in March that the justices would overturn the law. The mandate has been upheld as a tax,according to SCOTUSblog, with Chief Justice John Roberts joining the liberal wing of the court.
Twenty six states sued over the law, arguing that the individual mandate, which requires people to buy health insurance or face a fine starting in 2014, was unconstitutional. Opponents cast the individual mandate as the government forcing Americans to enter a market and buy a product against their will, while the government countered that the law was actually only regulating a market that everyone is already in, since almost everyone will seek health care at some point in his or her life.
Before oral arguments in March, polls of Supreme Court experts and scholars showed that most believed the mandate would be upheld as an exercise of Congress' power to regulate interstate commerce. But after justices seemed deeply skeptical of the mandate in oral arguments in March, the consensus flipped, with most experts guessing the court would strike down the law.

Our full analysis of the Supreme Court's decision on ObamaCare after the jump:

[From the Desk of The Janitor]:

Find the full text of the COURT OPINION HERE:

To say that this decision was long-awaited is an understatement of epic proportions.  Ever since the Affordable Care Act (aka "ObamaCare") was passed by Congress and signed into law by President Obama in 2010, opponents to the Act have mounted a campaign of legal challenges that have led us to this day.  Today's landmark 5-4 decision by the Supreme Court upholding ObamaCare came as a shock to many on the Right and Left for several reasons.

First and foremost, Chief Justice John Roberts, a Republican Justice appointed by President George W. Bush, joined the 4 liberal Justices on the Left (Justices Ginsburg, Breyer, Sotomayor and Kagan) in upholding ObamaCare.  This act alone will have pundits at MSNBC and Fox News scratching their heads for days.  [Editor's Note: It should be noted that our very own Shady Grady did predict that we could see Roberts join the Left on this one.]

Politics aside, what also came as a shock to many is that the Court upheld as Constitutional the extremely controversial heart of ObamaCare: the Individual Mandate.  As we discuss more fully below, Chief Justice Roberts ruled that the individual mandate is a tax, and nobody questions the fact that Congress has the Constitutional power to tax.  [Editor's Note: Please note for the record that we made this same argument back in 2010 (see Item #2 in this Post) when ObamaCare was first signed into law].

So now that we've gotten the preliminaries out of the way, what did the Supreme Court say about ObamaCare?

THE 411:
We know that "ObamaCare" was before the Supreme Court, but what exactly was the Supreme Court being asked to review about it?  Very quickly, the Court was asked to review the following items of the ObamaCare law:

1. Whether the Individual Mandate is Constitutional.
2. Whether the Medicaid Expansion is Constitutional.
3. Whether striking down any one portion of ObamaCare means that the whole thing must be struck down.

Chief Justice John Roberts
Part 1: The Individual Mandate
The individual mandate (officially known as "26 U.S.C.  § 5000A") is often described as the core of ObamaCare.  The mandate requires that every man, woman and child in America must have health insurance starting in 2014.  The theory behind the mandate is that in order to bring health care costs down for everybody, we need everybody to be a part of the insurance pool.  If we do this, then people who do have insurance will no longer be footing the bill for those who don't have insurance but who, nonetheless, receive medical treatment anyway.

As we mentioned above, Chief Justice Roberts, joined by Justices Ginsburg, Breyer, Sotomayor and Kagan, started off by ruling that the individual mandate is a tax.  This may seem like semantics, but because the individual mandate qualifies as a "tax" under the Tax & Spend Clauase -- and not a requirement to affirmatively "do something" under the Commerce Clause as we discussed yesterday -- it makes all the difference in the world when it comes to the Constitution.  As Chief Justice Roberts made clear:
The Federal Government does not have the power to order people to buy health insurance. [The individual mandate] would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. [The individual mandate] is therefore constitutional, because it can reasonably be read as a tax.
Part 2: The Medicaid Expansion
There is a provision in ObamaCare that seeks to expand Medicaid to include more people. Medicaid is health insurance for certain groups of people which is paid for by the States who are, in turn, reimbursed by the Federal Government. Currently, Medicaid only provides health coverage to kids, pregnant women, the blind, the elderly, the disabled, and poor people.  ObamaCare seeks to expand this to include ALL adults under the age of 65 whose annual salaries fall below a certain level (133% of the federal proverty line).  The way it is worded, the ObamaCare provision threatens to withhold all Federal Medicaid funding to any State that opts out of the new Medicaid Expansion program.

Justice Roberts held that although the Federal Government can certainly place conditions on the Federal dollars that it gives to the States, the Federal Government cannot force states (either through the threat of withholding all Federal funding or otherwise) to opt into the new Medicaid Expansion program.  Having said that, he ruled that the Medicaid Expansion program is Constitutional so long as the States are "free" to opt out if they so choose; and by "free" we mean that the Federal Government cannot withholding all of its Federal funding from a State that chooses to opt out.

As for the Medicaid expansion, that portion of the Affordable Care Act violates the Constitution by threatening existing Medicaid funding. Congress has no authority to order the States to regulate according to its instructions.Congress may offer the States grants and require the States to comply with accompanying conditions, but the States must have a genuine choice whether to accept the offer. The States are given no such choice in this case: They must either accept a basic change in the nature of Medicaid, or risk losing all Medicaid funding. The remedy for that constitutional violation is to preclude the Federal Government from imposing such a sanction. That remedy does not require striking down other portions of the Affordable Care Act. (emphasis supplied)
Part 3: Severability
Now, do you see that last sentence in the quote above?  That's called "severability."  It's a doctrine that the Supreme Court has adopted over the years that basically goes like this:  If Congress passes a law with multiple sections, and the Supreme Court finds a section of that law unconstitutional, the Supreme Court should leave the other sections intact.

As you can imagine, the opponents of ObamaCare -- including the 4 Republican Supreme Court Justices who wrote today's Dissenting Opinion -- wanted to see the ENTIRE law thrown out.  Chief Justice Roberts did not do that.  He reminded the Court in a very law professor-like manner that the purpose of the Court is not to undo all of Congress' hard work whenever they make a law that turns out to be unpopular.  Instead, the job of the Court is to use a scalpel and remove only that which it finds unconstitutional.  By following this method, the Supreme Court shows deference to Congress because Congress is made up of officials who are elected by the People of the United States.

Per Chief Justice Roberts:
The question remains whether today’s holding affects other provisions of the Affordable Care Act. In considering that question, “[w]e seek to determine what Congress would have intended in light of the Court’s constitutional holding.” Our “touchstone for any decision about remedy is legislative intent, for a court cannot use its remedial powers to circumvent the intent of the legislature.” The question here is whether Congress would have wanted the rest of the Act to stand, had it known that States would have a genuine choice whether to participate in the new Medicaid expansion. Unless it is “evident” that the answer is no, we must leave the rest of the Act intact. We are confident that Congress would have wanted to preserve the rest of the Act...According to the States, this means that the entire Act must fall. We disagree. (emphasis supplied)
Justice Ruth Bader Ginsburg
Justice Ginsburg, as the member of the Court in the majority with the most seniority besides the Chief Justice, wrote a concurring opinion joined by Justices Breyer, Sotomayor and Kagan.  Justice Ginsburg agrees with the holding written by Chief Justice Roberts, but she notes for the record in her 61-page Concurring Opinion that, unlike Roberts, she feels that the Commerce Clause DOES allow the Federal Government to force people to buy health insurance because everybody is a part of the health care market:  
The health-care market’s size is not its only distinctive feature. Unlike the market for almost any other product or service, the market for medical care is one in which all individuals inevitably participate. Virtually every person residing in the United States, sooner or later, will visit a doctor or other health-care professional.
Furthermore, she feels that the Federal Government should be able to withhold 100% of its Medicaid funding from any state that opts out of the new Medicaid Expansion program:
States have no entitlement to receive any Medicaid funds; they enjoy only the opportunity to accept funds on Congress’ terms. Future Congresses are not bound by their predecessors’ dispositions; they have authority to spend federal revenue as they see fit. The Federal Government, therefore, is not, as THE CHIEF JUSTICE charges, threatening States with the loss of “existing” funds from one spending program in order to induce them to opt into another program. Congress is simply requiring States to do what States have long been required to do to receive Medicaid funding: comply with the conditions Congress prescribes for participation. (emphasis supplied).
Justice Antonin Scalia
The Supreme Court's die hard conservative, Justice Antonin Scalia, authored the official 65-page Dissenting Opinion for this case joined by Justices Kennedy, Thomas and Alito.  In his view, the Commerce Clause clearly does not allow the Federal Government to require that people buy health insurance:

Wickard v. Filburn has been regarded as the most expansive assertion of the commerce power in our history. A close second is Perez v. United States, 402 U. S. 146 (1971), which upheld a statute criminalizing the eminently local activity of loan-sharking. Both of those cases, however involved commercial activity. To go beyond that, and to say that the failure to grow wheat or the refusal to make loans affects commerce, so that growing and lending can be federally compelled, is to extend federal power to virtually everything. All of us consume food, and when we do so the Federal Government can prescribe what its quality must be and even how much we must pay. But the mere fact that we all consume food and are thus, sooner or later, participants in the “market” for food, does not empower the Government to say when and what we will buy. That is essentially what this Act seeks to do with respect to the purchase of health care. It exceeds federal power. (emphasis supplied).
 And with respect to Chief Justice Robert's ruling that the individual mandate is a "tax", Scalia argues:

The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so...we cannot rewrite the statute to be what it is not. “‘“[A]lthough this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . . .” or judicially rewriting it.’” In this case, there is simply no way, “without doing violence to the fair meaning of the words used,” to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty. (emphasis supplied).
As for the Medicaid Expansion, Scalia had this to say:
Coercing States to accept conditions risks the destruction of the “unique role of the States in our system.” “[T]he Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ instructions.”
Justice Clarence Thomas
Not satisfied by the Dissent above, Justice Clarence Thomas felt compelled to author his own 2-page Dissenting Opinion joined by nobody but himself.

In his Dissenting Opinion, Justice Thomas makes the same kind of arguments that we have grown accustomed to seeing from him over the years about the "original intent" of the Constitution as it was written by the founders way back in 1789 when Justice Thomas himself would have been considered, by his own logic, 3/5ths of a human being.  In short, Justice Thomas argues that the "original intent" of the Commerce Clause not only precludes Congress from passing the individual mandate, but it also precludes the Supreme Court from trying to evaluate whether having health insurance has a "substantial effect" on interstate commerce because there was no "substantial effect" test back in 1789.  The Supreme Court came up with this test 70 years ago back in Wickard v. Filburn (see our post from yesterday).  So in other words, Justice Thomas would have overruled Wickard v. Filburn.

So what's your take?
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