Individual Mandate Upheld–Medicaid Expansion Upheld (Mostly)
I blogged on January 18, 2012, about the constitutional challenges to the Patient Protection and Affordable Care Act (“the Act”) , where I expressed the view that the individual mandate was clearly constitutional under the Commerce Clause. Also, on February 24, 2012, I posted a video presentation I made (with others) to the Shriver Center about all aspects of the Act. See these posts for background.
Today, the United States Supreme Court ruled, 5-4, in an opinion (PDF) by Chief Justice Roberts, that the individual mandate was constitutional under the Taxing Power of Congress, albeit not under the Commerce Clause.
The Court also upheld the Act’s significant expansion of Medicaid to include individuals under 65 whose income is under 133% of the federal poverty line, except insofar as the Act provides that states that do not opt into the expansion will lose all of their Medicaid funding.
The Chief Justice’s opinion, Justice Ginsburg‘s concurring in part and dissenting in part opinion (joined by Justices Breyer, Sotomayor and Kagan with regard to the Commerce Clause and the Taxing Power, and by Justice Sotomayor with regard to the Spending Power) and the dissenting opinion of Justices Kennedy, Scalia, Alito and Thomas on every issue except for the Commerce Clause and the Anti-Injunction Act, are available on the Court’s website. They are all quite lengthy.
Here are some points worth noting.
1. Chief Justice Roberts began his opinion by emphasizing that the Court’s role was to rule on the constitutionality of the Act, and not on its wisdom. This important civics lesson appears to have been lost during the heated political debate about the Act. And it may continue to be lost in future discussions of this decision.
2. The opinion of Chief Justice Roberts for the Court grounded the Act’s constitutionality on the Taxing Power (which surprised me). However, he went on to declare that, in his view and in the view of the four dissenting Justices, the individual mandate was unconstitutional under the Commerce Clause.
Since the individual mandate is constitutional under the Taxing Power, why reach out to discuss the Commerce Clause issue? This is both unnecessary and an inappropriate assertion of judicial power: it is clearly dictum and constitutes judicial activism. On the other hand, it sends a powerful federalism signal to Congress and the public since five justices signed on to it. Perhaps this was the Chief Justice’s way of giving something to the challengers of the Act.
Even more speculatively, is it possible that the original opinion of the Court, written by the Chief Justice, was to strike down the individual mandate under both the Commerce Clause and the Taxing Power, but the Chief Justice subsequently changed his mind about the Taxing Power? This theory is consistent with the fact that the dissenting opinion was handed down by the four justices jointly.
3. The Chief Justice’s opinion strained a bit to explain why the individual mandate was a tax for Taxing Power purposes even though the Act itself seemed to characterize the individual mandate as a “penalty.” He took a functional approach to this issue, and also pointed out that a tax can regulate while raising revenue. Federal taxation of liquor and cigarettes is an example of taxes that regulate.
4. Justice Ginsburg, with Justices Breyer, Sotomayor and Kagan, argued that the individual mandate was constitutional under the Commerce Clause as well as under the Taxing Power. In contrast, the dissenting justices contended that the individual mandate and the expansion of Medicaid, coupled with the threat to states of the loss of all Medicaid funds if they did not opt in, were both unconstitutional. They also maintained that for this reason the entire Act should be struck down.
5. All of the justices apparently agreed that the Anti-Injunction Act was inapplicable. In other words, the individual mandate was a tax for constitutional purposes but was not a tax for Anti-Injunction Act purposes. This is the kind of legal analysis that will make little sense to non-lawyers and perhaps to some lawyers as well. I mentioned this possibility when I spoke to the Shriver Center about the Act, and the audience laughed.
5. The Chief Justice’s opinion on the Medicaid expansion issue (joined by Justices Breyer and Kagan) maintained that Congress exceeded its authority under the Spending Power by insisting that states not opting into the expansion of Medicaid would lose all of their Medicaid funding. This was a truly significant amount for the states, constituting for many of them 10% percent of their entire budgets. The four dissenters agreed with this.
According to the Chief Justice, this was the equivalent of putting a gun to the state’s “head.” It was thus unconstitutionally coercive and violated federalism by effectively commandeering the states into federal service. Justice Ginsburg. joined by Justice Sotomayor, strongly disagreed.
Note that this ruling is the first in decades to strike down an exercise of the Spending Power on federalism grounds. Compare United States v. Butler, 297 U.S. 1 (1936)(invalidating provision in Agricultural Adjustment Act) and Steward Machine Co. v. Davis, 301 U.S. 548 (1937)(upholding provision of Social Security Act dealing with unemployment compensation). See also South Dakota v. Dole, 483 U.S. 203 (1987)(upholding federal statute that directed the withholding of a portion of federal highway funds from states that did not prohibit the purchase of alcohol by people under twenty-one). As such, the ruling has the potential to be a game-changer with regard to the Spending Power.
Bottom line: the Act is constitutional in its entirety except for the loss-of-all Medicaid-funding sanction imposed on states that do not opt into the Medicaid expansion.