Healthcare

It’s a tax!

It's a tax!

A law that would force most Americans to buy health care will survive in limited form as a tax, the Supreme Court ruled in a jaw-dropping, landmark decision on Thursday that dealt a disappointment to many conservatives, but included several small victories for the free market and individual rights.

In a split 5-4 decision, with Chief Justice John Roberts delivering the majority opinion, the court upheld President Barack Obama’s 2,700-page Patient Protection and Affordable Care Act, including a much-decried provision that would require all Americans to purchase a minimum level of health insurance coverage, a far-reaching move that justices in oral argument compared to being forced to buy healthy broccoli, a cell phone to dial 911, or burial insurance. The court opined that the mandate could not be supported under the Constitution’s commerce clause, but could be seen as part of Congress’s power to tax.

Roberts chides the government in his opinion for attempting to justify coercion of individuals through the Commerce Clause

“People, for reasons of their own, often fail to do things that would be good for them or for society,” he wrote. “Under the Government’s logic, that authorizes Congress to use its commerce power to compel citizens to act as the Government would have them act. That is not the country the Framers of our Constitution envisioned.”

He also dispensed with attempts by the government to regulate the uninsured based on their “prophesied future activity” — whether they will be in the market for health care.

“The Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions,” he said. “Any police power to regulate individuals as such, as opposed to their activities, remains vested in the states.”

However, Roberts said, the mandate can be seen as a tax, because individuals who choose to forgo insurance have the alternative to pay a fine to the IRS instead.

“Under that theory, the mandate is not a legal command to buy insurance,” Roberts wrote. “Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.”

Because the fee is described as a penalty, rather than a tax, in the statute, the Anti-Injunction Act, which would postpone a ruling on taxes until enactment, does not apply, the court said; but it still could be seen as a tax by the court.

The other much-contested part of the healthcare law would expand Medicaid by a staggering 16 million people. The court ruled that this, too would survive under a narrow reading, which gave leeway to the states to decide whether to implement the measure.

Justice Roberts wrote a separate opinion to explain his reasoning in striking down a requirement for states to adopt the expansion, but allowing them to opt in if they choose. In this opinion, he was joined by all justices but Sonia Sotomayor and Ruth Bader Ginsburg in finding the requirement for states unconstitutional, making that ruling 7-2, though the decision to narrowly uphold the law regardless remained a 5-4 split.

Under the Constitution’s Spending Clause, Roberts wrote, Congress’s power was limited to require states to comply with federal goals.

“Indeed, the manner in which the expansion is structured indicates that while Congress may have styled the expansion a mere alteration of existing Medicaid, it recognized it was enlisting the States in a new healthcare program,” Roberts wrote.

But, he said, Congress may offer funds under the law to allow states to expand the availability of Medicaid if they choose to do so.

Another victory for conservatives may be found in this last part: it is unconstitutional, the court holds, to force states to participate in the expansion.

“As a practical matter, that means states may now choose to reject the expansion; that is the whole point,” Chief Justice John Roberts wriote. “… Congress has no authority to order the states to regulate according to its instructions.”

The law is expected to cost the country $950 billion over the first ten years, but some have estimated the Medicaid expansion could drive costs even higher if all states participate.

Justices Ruth Bader Ginsburg filed an opinion concurring in part, concurring partly with the judgment, and dissenting in part, saying she believed the Commerce Clause allowed Congress to enact the individual mandate, and holding the Medicaid expansion as it was written. She was joined in the whole of her opinion by Justice Sonia Sotomayor, and in various parts by Justice Stephen Breyer and Justice Elena Kagan.

Justice Antonin Scalia was joined by Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito in filing a dissent, saying the court used activist reasoning to defend a constitutionally indefensible law.

“The Court today decides to save a statute Congress did not write,” Scalia said. “… The Court regards its strained statutory interpretation as judicial modesty, it is not. It amounts instead to a vast judicial overreaching. It creates a debilitated, inoperable version of health care regulation that Congress did not enact and the public does not expect.”

Thomas also wrote separately to voice disagreement with the court’s use at all of the Commerce Clause as a test in the case, saying the clause was overused to far expand the powers of Congress.

“The government’s unprecedented claim in this suit that it may regulate not only economic activity but also inactivity that substantially affects interstate commerce is a case in point,” he wrote.

This decision, likely to be declared a resounding victory for the president, who made the PPACA the keystone accomplishment of his first term, in fact will have a variety of political reverberations.

Just as the majority of Americans supported Arizona’s hard-line laws on immigration, which the court overturned earlier this week, polls continue to show that Americans oppose Obama’s health law, 56 to 44 percent.

According to a study completed last year by the nonpartisan Congressional Budget Office, that event will result in an employment reduction of about 800,000 American workers, or 0.5 percent of the workforce, because of the people who will no longer work to pay for and afford their own health insurance. Businesses, meanwhile, are already calculating how the law’s new minimum standards for providing health care — backed with a fine for non-compliance — will hurt their bottom line and change plans for hiring and expansion.

Update 10:36 a.m.: A law that would force most Americans to buy healthcare will survive in limited form as a tax, the Supreme Court ruled in a jaw-dropping, landmark decision on Thursday.

In a split 5-4 decision, with Chief Justice John Roberts delivering the majority opinion, the court upheld President Barack Obama’s 2,700-page Patient Protection and Affordable Care Act, including a much-decried provision that would require all Americans to purchase a minimum level of health insurance coverage, a far-reaching move that justices in oral argument compared to being forced to buy healthy broccoli, a cell phone to dial 911, or burial insurance. The court opined that the mandate could not be supported under the Constitution’s Commerce Clause, but could be seen as part of Congress’s power to tax.

Justices Samuel Alito, Clarence Thomas, and Antonin Scalia filed a dissent.

Click here to read the opinion of the Supreme Court.

Other parts of the law would expand Medicaid by a staggering 16 million people. The court ruled that this, too would survive under a narrow reading, which gave leeway to the states to decide whether to implement the measure.

“As a practical matter, that means states may now choose to reject the expansion; that is the whole point,” Chief Justice John Roberts writes in the majority opinion. “… Congress has no authority to order the states to regulate according to its instructions.”

The law is expected to cost the country $950 billion over the first ten years, but some have estimated the Medicaid expansion could drive costs even higher.

This decision, likely to be declared a resounding victory by the president, who made the Affordable Care Act the keystone accomplishment of his first term, in fact will have a variety of political reverberations.

Just as the majority of Americans supported Arizona’s hard-line laws on immigration, which the court overturned earlier this week, polls continue to show that Americans oppose Obama’s health law, 56 to 44 percent.

According to a study completed last year by the nonpartisan Congressional Budget Office, that event will result in an employment reduction of about 800,000 American workers, or 0.5 percent of the workforce, because of the people who will no longer work to pay for and afford their own health insurance. Businesses, meanwhile, are already calculating how the law’s new minimum standards for providing healthcare — backed with a fine for non-compliance — will hurt their bottom line and change plans for hiring and expansion.

Reps. Cathy McMorris Rogers (R-Wash.) and Tom Price (R-Ga.) are expected to address the decision for the GOP later today.

Update 10:31 a.m.: The narrow interpretation of the Medicaid expansion leaves latitude to the states to implement that portion of the Affordable Care Act.

“As a practical matter, that means States may now choose to reject the expansion; that is the whole point,” Chief Justice John Roberts writes in the majority opinion. “… Congress has no authority to order the States to regulate according to its instructions.”

Update 10:28 a.m.: In addition, the court upheld a narrow interpretation of the expansion of Medicaid, ruling it cannot invalidate that part of the Affordable care Act. Under the severability clause, they ruled that they would not have had to invalidate the whole law even if they struck down the individual mandate. Moreover, the court ruled that the Anti-Injunction Act does not apply to this case, and they would not have to postpone a ruling until the law goes into effect in 2014.

The Supreme Court has said the individual mandate can be upheld as a tax, although it cannot be supported under the Commerce Clause of the Constitution. Chief Justice Roberts delivered the majority opinion, joined in the first part by justices Ginsburg, Breyer, Sotomayor, and Kagan. Justices Scalia, Kennedy, Thomas, and Alito filed a dissenting opinion to the whole.

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