After years of failed efforts to enact national health care reform and piecemeal federal efforts to band-aid particular gaps, Congress enacted comprehensive health care reform in 2010---the Patient Protection and Affordable Care Act. The act was no model of perfection and reflected a number of compromises, but it was a major step forward in addressing the need to provide access to affordable health care for all Americans.
Complex and controversial, the act was challenged almost immediately. The focus of opposition was the act's requirement that all individual purchase health insurance (the "individual mandate"), although there were many seeking to overturn the statute in its entirety.
This morning, in a decision awaited with more anticipation and attention than any other I can remember, the Supreme Court upheld the constitutionality of the individual mandate by a 5-4 vote, with Chief Justice Roberts providing the key swing vote.
From the Commerce Clause to the Taxing Authority
Although much of the discussion of the individual mandate had focused on Congress' power under the Commerce Clause, it was Congress' taxing authority that convinced Justice Roberts of Congress' power to mandate that individuals purchase insurance. The act provides that those who fail to comply with the mandate must make a "shared responsibility payment" to the federal government, a "penalty" to be "assessed and collected in the same manner" as tax penalties. Writing for the majority Justice Roberts wrote, "[o]ur precedent demonstrates that Congress had the power to impose the [individual mandate] under the taxing power, and [the mandate] need not be read to do more than impose a tax. This is sufficient to sustain it." He made clear that individuals may choose to pay the tax in lieu of purchasing insurance. In a concurring opinion, Justice Ginsberg, writing on behalf of herself and for Justices Sotormayor, Breyer, and Kagan, indicated that she would uphold the mandate under the Commerce Clause.
With the survival of the individual mandate, major provisions of the act, a number of which found support even among those who opposed the individual mandate, remain in place. These include the act's requirements that plans may no longer put lifetime limits on essential health benefits or impose limits on pre-existing coverage and must provide for coverage for adult children until age 26.
The act did not survive completely intact, however. In a 7-2 decision, the Court struck down the provision of the act forcing states to expand their Medicaid coverage to the poor. It ruled that the federal government lacks the power to terminate Medicaid funds to state who do not wish to expand. However, the Court left open to states the ability to opt into an expanded Medicaid program. It wrote, "[n]othing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding."
Today's decision upholding the individual mandate is an enormous victory for President Obama. However, the decision is not likely to end of the battle. Foes of the individual mandate will be gearing up in the hope that the November election leads to enough additional Republican for Congress to repeal the act. In addition, there has been a lot of infighting at the state level over implementation, particularly the establishment at the state level of exchanges through which people buying insurance can get coverage. Many states have refrained from moving forward with the exchanges, waiting for today's decision. It would not be surprising to see the federal government having to step in to manage efforts in cases where the states drag their feet.
Reigniting the HHS Mandate Controversy
The Court's decision to uphold the act means that the controversy over the requirement that employers provide contraception coverage for their employees remains a live one. Regulations enacted by HHS pursuant to the act require that contraception coverage be provided at no cost to individuals. The Catholic Church and other religious institutions have objected that the failure to exempt from the requirement those with religious objections to contraception constitutes a violation of religious freedom. (The regulations do contain an exemption for religious employers, but it is a very narrow one.) Whether the Obama administration can come up with a compromise position that satisfies those with religious objections remains to be seen. In the absence of such a solution, Catholic hospitals, universities, and other entities will have to decide how to respond to the contraception mandate. Litigation has already been brought; how it will be resolved is an open question.
Responding to this morning's decision, the U.S. Conference of Catholic Bishops issued a statement that concluded, "The decision of the Supreme Court neither diminishes the moral imperative to ensure decent health care for all, nor eliminates the need to correct the fundamental flaws described above. We therefore continue to urge Congress to pass, and the Administration to sign, legislation to fix those flaws."
Outside of the health care area, today's decision may also be construed as a blow to Congress' authority under the Commerce Clause. Justice Roberts's opinion for the Court held that the individual mandate is not a valid exercise of Congress' power under the Commerce Clause and Necessary and Proper Clause. In his view, the power to regulate presupposes the existence of commercial activity to be regulated and to allow regulation in the absence of activity would grant too much power to Congress. It remains to be seen how much of a limit today's decision will impose on Congress' authority to enact social welfare laws, but it assuredly will have some.