Supreme Court to Decide Fate of Affordable Care Act Amid Litigation and Debate

Strategic Insights -

The Affordable Care Act (ACA), signed into law on March 23, 2010, has been embroiled in litigation on its one-year anniversary, with five key decisions rendered in separate lawsuits challenging the constitutionality of the law. The decisions, brought by individual citizens, states, academic institutions, and foundations, center around the individual mandate that requires all individuals to purchase "minimum essential coverage" (MEC) by January 1, 2014, or pay a tax penalty.

Key Takeaways:

  • The litigation revolves around the commerce clause issue, with plaintiffs arguing that regulating a decision not to purchase health insurance exceeds congressional authority under the commerce clause.
  • Two district court decisions, State of Florida v. Sebelius and Virginia ex rel Cuccinelli v. Sebelius, awarded summary judgment to plaintiffs, while three federal district court decisions, Liberty Univ. v. Geithner, Mead v. Holder, and Thomas More Law Center v. Obama, dismissed plaintiffs' claims.
  • The decisions ruling in favor of and against the ACA on commerce clause grounds are separated by a gaping doctrinal divide, with the Florida and Virginia courts concluding that the individual mandate is an unconstitutional "penalty" rather than a tax.
  • Plaintiffs also argued that the assessment for noncompliance was not a properly apportioned direct tax, with no court yet deciding this issue.
  • The Florida decision rejected 10th Amendment and abuse-of-commerce clause challenges to provisions of the ACA that expanded Medicaid coverage, finding that the "voluntary" nature of a state's Medicaid participation precludes a viable 10th Amendment claim.
  • However, the court also found the individual mandate too crucial to the overall purpose of the reform law to be "severed" from the remainder of the statute, declaring the ACA invalid in its entirety.
  • The Virginia court took a more traditional path, severing the invalid provision and leaving the remainder of the ACA intact.

Statistics:

  • The tax penalty for noncompliance is approximately $695 per person.
  • The states get to eat their cake without having it because Vinson also found the individual mandate too crucial to the overall purpose of the reform law to be "severed" from the remainder of the statute.
  • The government is seeking a "clarification" of Vinson's order, and several states have proclaimed their intentions not to comply with its other requirements or deadlines.

Sources:

  • The Legal Intelligencer
  • Cozen O'Connor, Mr Mark Gallant
  • Mondaq Ltd
  • U.S. Constitution, Article 1, Section 8, Clause 3
  • U.S. Constitution, Article 1, Section 8, Clause 18
  • Wickard v. Fulburn, 317 U.S. 111 (1942)
  • Gonzales v. Raich, 545 U.S. 1 (2005)
  • United States v. Lopez, 514 U.S. 549 (1995)
  • United States v. Morrison, 529 U.S. 598 (2000)