When we last discussed the new health care law (The Patient Protection and Affordable Care Act, often called “Obamacare”), the Supreme Court had just held three days of oral argument concerning whether it was constitutional. As we noted, the Supreme Court justices mercilessly grilled the proponents of the law, and as a result most legal observers agreed that the law was in serious jeopardy.
We concluded, however, that “the Court has surprised us before, so no one can be sure what their decision will be. One thing is certain, however: it will be a very close vote.”
Sure enough, the Court has surprised us once again, as it upheld the “individual mandate,” i.e., the requirement in the law that everyone participate in the health insurance market, or pay a fine. And sure enough, the Court’s decision was by the slimmest of margins: 5-4.
The central argument before the Court was whether the individual mandate violated the commerce clause of the Constitution. Opponents of the law argued that the commerce clause only allows Congress to regulate commerce that already exists, and does not give Congress the power to require people to engage in commerce. They argued that Congress can regulate people who choose to sell and purchase health insurance, but it cannot make people buy insurance in the first place.
Five of the nine justices agreed with this position, and found that the health care law simply pushed the commerce clause too far. But the law survived. How?
The answer was provided by Chief Justice John Roberts, who, with the agreement of four other justices, concluded that while the individual mandate may not pass muster under the commerce clause, it is permissible under Congress’s taxation powers. The Chief Justice held that Congress has the power to tax people who do not buy health insurance.
This conclusion was a surprise, because the law specifically calls the fine for not purchasing health insurance a “penalty” and not a “tax.” Also, those in favor of the law primarily argued that the law was not a tax and was instead a regulation of commerce. The reason for this is obvious: “tax” is a dirty word in contemporary American politics, and the law would have had a difficult time passing if it were promoted as a new tax.
However, the Chief Justice held that if it looks like a tax and quacks like a tax, Congress can call it whatever it wants, but it’s still a tax. Furthermore, because taxes that seek to influence conduct are constitutional (for example, cigarettes are highly taxed in order to deter smoking), the Chief Justice found that it was acceptable for Congress to tax people for not buying health insurance.
To make a long story short, thanks to the Chief Justice, the Court upheld the individual mandate, just not for the reason everyone thought it would.
So what does this mean for the average American? Assuming the law is not repealed (as Republicans have threatened to do if they regain control over the Presidency and the Senate), or otherwise challenged, it means all of the provisions of the law should go into effect as planned. This includes the elimination of annual and lifetime coverage limits, the elimination of pre-existing conditions as a reason to deny coverage, permitting children to stay on their parents’ coverage until age 26, and certain free preventive care, among other benefits. The Congressional Budget Office has also projected that the law will decrease the federal deficit by hundreds of billions of dollars.
There will surely be more debate about the law as more of its provisions are phased in. We’ll keep you updated about the legal implications of that debate.