Case Study On Patient Protection And Affordable Care Act

In March 2012, the United States Supreme Court heard oral arguments for a case challenging the constitutionality of the Patient Protection and Affordable Care Act (ACA). The challenge was brought by a number of state governments, businesses and individuals that the Court collectively referred to as the National Federation of Independent Business (NFIB). The NFIB argued that the ACA was an unconstitutional expansion of Congress’ powers. According to the NFIB, the Congress is constitutionally limited to exercise only those enumerated powers granted it in the Constitution. Specifically, those powers include the power to regulated interstate commerce under the Commerce Clause; and the power to levy taxes and use federal funds under the Taxing and Spending Clause.
Under the NFIB’s analysis, no enumerated power gave Congress the authority to require Americans to purchase some minimum level of insurance or be assessed a tax penalty under the ACA’s Individual Mandate. Moreover, the NFIB further argued that forcing states to provide Medicaid coverage or completely lose their federal Medicaid funding under the ACA’s Medicaid Expansion Provision was an unconstitutional expansion of Congress’ authority. Lastly, the NFIB argued that the ACA requirement ordering employer’s to provide health insurance coverage for their employees was as unconstitutional “power-grab” by Congress to state government authority.
The trial court held that the Individual Mandate was unconstitutional and that Congress did not have the authority under the Commerce Clause or the Tax and Spending Clause to enact it. The trial court dismissed NFIB’s argument challenging the requirement for employers. Furthermore, the trial court did not find enough evidence that Congress unconstitutionally expanded its authority in its requirement that states to provide Medicaid coverage. The trial court, however, held that ACA’s provisions could not be severed. Therefore, since one part was unconstitutional, the whole law was unconstitutional. On appeal to the Eleventh Circuit, the appeals court affirmed the trial court’s holdings with the exception that the ACA’s unconstitutional provision could be severed and its constitutional provisions allowed to remain as law.
The Supreme Court re-examined the issues as posed to the Eleventh Circuit and found, in a 5-4 decision authored by Chief Justice John Roberts, that the ACA was more-or-less constitutional. First, the Court agreed with the NFIB that Congress did not have the authority to enact the Individual Mandate under the Commerce Clause. Chief Justice Roberts wrote that Commerce Clause allowed Congress to regulate commerce that is already happening but not force people to take part in commerce as the law required. The Court, however, did find that the Individual Mandate was a valid under Congress’ taxing authority. Under the Court’s analysis, the tax assessment for those that did not buy insurance was the same as any government levied tax in that it collected by the Internal Revenue Service (IRS); it was not extremely large; the tax was the only result of disobedience; and it could not be considered a penalty for an unlawful act. Second, the Court found that the Medicaid Expansion provision was an unconstitutional in that Congress did not have the authority to threaten the withholding all federal Medicaid funds to get states to comply with its orders. Chief Justice Roberts wrote that completely withholding all funds, in essence, forced states to comply. Accordingly, this would destroy the authority of states to regulate their own matters. However, the Court also held that, under the Taxing and Spending Clause, Congress could threaten to withhold some federal Medicaid funds in an effort to try to persuade states to follow its orders. Third, because the Court found that both the Individual Mandate and Medicaid Expansion provisions were constitutional they did not address whether or not different provisions in the ACA were severable.
Three years after the last ACA decision, in March 2015, the Supreme Court is set to hear another legal challenge to its existence. This time, the argument is focuses on federally tax-credit subsidies granted by the IRS to “offset the cost of insurance premiums for low and middle-class people” (Parloff). The plaintiffs argue that ACA only allows the IRS to grant subsidies, which they claim were specifically created as an incentive to states, to those states that actually “establish” their own health exchanges. At present, 34 states opted not to set up their own health exchanges which means that the exchanges in those states were stablished by the federal government. Those 34 states are therefore, according to the plaintiffs, prohibited from receiving the IRS subsidies. The plaintiffs claim, however, that the IRS has in violation of the ACA granted subsidies to all states. On the other hand, the IRS has argued that “establish” should be interpreted broadly to include federal health exchanges that are created “for use” by the state. In essence, the argument is one of interpretation.
Unlike the 2012 case which pointed directly to specific provisions of the Constitution, this case is, as mentioned, centered on how the justices interpret English. If enough evidence is presented that Congress meant more than the plain meaning of the words in the law, then the Court should hold for the IRS. However, if there is no proof of Congress’ intent or if the justices decide to simply abide by the plain meaning of the words than the plaintiffs will win.

Works Cited

Liptak, Adam. “Supreme Court Upholds Health Care Law, 5-4, in Victory for Obama.” The New York Times. The New York Times, 28 Jun. 2012. Web. 20 Feb. 2015.
National Federation of Independent Business v. Sebelius, 132 S.Ct 2566 (2012). Supreme Court. 2012. Web. 20 Feb. 2015
Parloff, Roger. Supreme Court’s new Obamacare case could be the next Bush v. Gore.” Fortune. Fortune, 10 Nov. 2014. Web. 20 Feb. 2015.
Reynolds, Glenn and Brannon Denning. “National Federation of Independent Business v. Sebelius: Five Takes. Social Science Research Network, 17 Aug. 2012. Web. 20 Feb. 2015.