February 27, 2021 | Joe Brennan
Edited by Mackinley Taylor
The recent confirmation of Amy Coney Barrett to the Supreme Court has brought renewed attention to the Patient Protection and Affordable Care Act, commonly known as Obamacare. Democrats on the Senate Judiciary Committee prophesied gloom and doom if Judge Barrett’s confirmation provided the fifth vote to strike it down, while Republicans, who have long opposed the law, would be happy to see it thrown out. In light of this political controversy, it is worth reexamining the law, its history, and the case against it to see if predictions of its demise have any basis in fact.
Obamacare has been controversial since its inception. The law was signed by President Obama on March 23, 2010. Among its many provisions was one that immediately became the subject of legal scrutiny. Known as the individual mandate, the provision required that all Americans buy health insurance that covered certain kinds of treatment or pay a “penalty”. A lawsuit was brought, and it eventually ended up before the Supreme Court as National Federation of Independent Business v. Sebelius, Sebelius being the Secretary of Health and Human Services at the time. [1] The petitioners argued that such a mandate was not within the lawful powers of Congress and thus constituted an overreach. The government argued that the mandate was a lawful exercise of the Taxation Clause, Commerce Clause, and Necessary and Proper Clause of Article One, Section Eight of the Constitution, which spells out the powers of the Congress. [2] The government also argued that under the Anti-Tax Injunction Act, the petitioners could not challenge the legality of a tax until after it was collected. [3] The petitioners also raised some lesser issues, but those are not relevant to this article.
The first day of oral arguments before the Supreme Court was devoted to the Anti-Tax Injunction Act. The second day concerned the Article One, Section Eight issue. The resulting opinion, written by Chief Justice John Roberts, reached a strange conclusion. The Court held that the individual mandate was not a tax for the purposes of the Anti-Tax Injunction Act, but that it was constitutional as an exercise of the power given to Congress in the Taxation Clause. Notably, the Court explicitly held that the mandate was not legal under the Necessary and Proper Clause or under the Commerce Clause. Its constitutionality hinged on its being a tax for the purpose of the Taxation Clause, in that revenue was paid to the treasury through the IRS. It was not a tax for the purpose of the Anti-Tax Injunction Act, however, because the statute did not call it one. This ruling confused most everyone, but it put the question of the constitutionality of the mandate to bed. It was constitutional. But crucially, the entire ruling rested on this idea of the mandate being a tax for Article One purposes. If anything were to jeopardize the mandate’s status as a tax, its constitutionality would come into serious question.
This is exactly what occurred in 2017 when President Trump signed the Tax Cuts and Jobs Act. [4] This law, among other things, reduced the “penalty” for not having insurance to zero dollars. Almost immediately, the question arose: how could a tax of zero be legally permissible as an exercise of the Taxation Clause power? Texas led a group of 20 states which brought a lawsuit on exactly these grounds. The trial court held that since the mandate no longer collected revenue it was no longer a tax, and thus it was unconstitutional. Furthermore, the trial court reasoned that since the individual mandate was such an integral part of Obamacare, the entire thing was unconstitutional and thus should be struck down. The government announced that it did not dispute the trial court’s ruling and would not appeal or otherwise contest it. At this point, a group of 17 states, led by California, stepped in to defend the mandate and Obamacare as a whole. The case was appealed to the Fifth Circuit, and, after inconclusive proceedings there, to the Supreme Court as California v. Texas. The Supreme Court granted certiorari, and the case was argued on November 10, 2020.
As to the predictions of Obamacare’s downfall as a result of this case, they seem to be well founded. Roberts’ entire opinion in Sebelius was based on the proposition that the mandate is a tax. Therefore, Congress is legally permitted to enact it under the Taxation Clause of Article One, Section Eight of the Constitution. As Roberts himself explained in the opinion of the Court, the mandate is a tax because it exhibits the characteristics of a tax, including “the essential feature of any tax: it produces at least some revenue for the Government.” [6] With the tax reduced to zero, it cannot produce any revenue for the government. Therefore, by Roberts’ own definition, the mandate is no longer a tax. Since the opinion explicitly rejected the idea that the mandate could be held constitutional based on the Commerce or Necessary and Proper Clauses, the mandate has been robbed of its Article One basis and thus is unconstitutional. Congress is permitted to exercise only the powers explicitly granted to it in Article One. None of the other powers, things like building roads, printing money, and raising armies, have anything to do with health insurance, much less a mandate that everyone must have it. Therefore, no rational reading of the law, the Constitution, and the opinion in Sebelius can save the mandate. The only way out of this would be to argue that the mandate is not, in fact, a tax, and to try to justify it under some other federal power. However, the two powers that the court has historically interpreted the most broadly are the Commerce Clause and the Necessary and Proper Clause, which, as discussed previously, are off the table. Even the most gifted of lawyers will have a hard time finding another power granted to congress that can be reasonably construed to support so sweeping a piece of legislation as the individual mandate. This, of course, raises the question of severability, which is beyond the scope of this article. In a nutshell, however, if the individual mandate is struck down, there is good reason to think that the rest of Obamacare will go down with it.
In conclusion, it seems that all of the controversy over the nomination of Justice Barrett is unfounded. Any reasonable justice would strike down the individual mandate in light of the fact that it is no longer a tax. The mandate’s sole constitutional basis has been rendered moot, and the only reasonable conclusion that can be drawn from the Court’s previous ruling is that it must be struck down.
Brennan is a sophomore majoring in Economics with a minor in History.
Sources:
[1] National Federation of Independent Business v. Sebelius 567 U.S. 519, 132 S. Ct. 2566 (2012)
[2] U.S. Const. art. I, § 8
[3] 26 U.S.C. § 7421
[4] Tax Cuts and Jobs Act of 2017 Pub. l. No. 115-97 131 Stat. 2054
[5] Petition for a Writ of Certiorari California v. Texas 340 F.Supp.3d 579 (2020) (No. 19-10011)
[6] National Federation of Independent Business v. Sebelius 567 U.S. 519, 132 S. Ct. 2566 (2012)
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