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A Very American Problem – Part 2

A Very American Problem – Part 2

As the millions of Americans who were left scratching their heads when they tuned into the opening ceremony of the Summer Olympics in London to find a bed-bouncing, swing-dancing tribute to the NHS can attest, Brits and Americans have very different views of healthcare. Many Americans were left equally confused by the ruling of the Supreme Court on the healthcare legislation passed by the Obama administration. Despite the obvious political divisions, the ruling itself came a quite a surprise.

On 28 June 2012, the Supreme Court of the United States passed down a much anticipated opinion of the Affordable Care Act (ACA). The case arose from a challenge brought by 26 states who sought to have the Act struck down as unconstitutional. The Court chose to uphold the most contentious provision of the Act, the ‘Individual Mandate’ (forcing everyone to take out health insurance) but struck down the provision that imposed Medicaid expansion (health care for sick and low-income people). The fact that the Court upheld the Individual Mandate may not come as surprise for many, but the way the Justices voted and the reasoning for their decision was not commonly anticipated.

If you read A Very American Problem Part 1, you were probably under the impression that the Affordable Care Act would be decided on the basis of the Commerce Clause. By way of a refresher, the Commerce Clause is a broad grant of power to Congress (the legislative branch of the Federal Government) to make laws that relate to the movement of commerce between the individual states. It sounds dry, but has actually been used in some quite remarkable ways to ban racial segregation and limit gun possession (with varying degrees of success). Because the US Constitution is basically a document that limits the power of the Federal Government, it is only in very specific and highly controlled ways that Congress may actually legislate for the whole of the country. This makes the Commerce Clause (and the Enumerated Powers, that it forms a part of) an important tool in law making.

The opinions of constitutional lawyers and legal academics in the period leading up to the Supreme Court ruling all agreed: the Commerce Clause would be the key part of the court’s opinion. This was supported by the American Solicitor General, who actually wrote the brief in support of the ACA. However, the Supreme Court Justices disagreed. For them the ACA was all about taxation and not commerce.

Solicitor General Donald Verrilli was quoted as saying that the taxation power argument was ‘the Administration’s third backup argument’, after the Commerce Clause and the ‘necessary and proper clause’.[1] Perhaps the reason it was the third argument was because the Act makes it mandatory to take out healthcare insurance with a private company. In that sense, it is not really a tax in the way that we commonly understand the term. Chief Justice Roberts, writing the opinion of the Court, stated that there were many factors that led to the decision, including the fact that internal revenue (the taxing department of the government) would be collecting it. In addition, he stated, the fact that the Act’s ‘requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as tax’. There are many taxes that act in a fashion designed to encourage certain behaviour in America, such as home-owners’ tax breaks, and many that discourage bad behaviour, such as taxing cigarettes and alcohol. This ACA is now to be treated as one such tax.

Perhaps the most important aspect of the ruling constitutionally, however, is that it leaves the Commerce Clause untouched. In the run up to the decision, there was a great deal of concern and speculation that the ruling would either narrow or broaden the scope of the Commerce Clause, thus granting much more power to the Federal Government or taking some away. The decision of the majority of the Court to do neither of these things shows a great deal of judicial restraint.

What also came as a surprise was the way the individual Justices voted. The common understanding was that the conservative–liberal split on the Court, which makes them fairly consistent in their voting patterns, would determine much of the ruling. It was anticipated that the conservative Justices, Antonin Scalia, Clarence Thomas, Samuel Alito and (Chief Justice) John Roberts, would construe the Commerce Clause to rule the ACA as unconstitutional. Equally, it was anticipated that the consistently liberal Justices, Ruth Bader Ginsberg, Sonia Sotomayor, Elena Kagan and Stephen G. Breyer, would vote to uphold the ACA (again based on their construction of the Commerce Clause). This would have left Anthony M. Kennedy, who is widely considered to be the swing vote, to ultimately make the decision. After all of the interest and speculation about Justice Kennedy’s vote, he actually joined conservative Justices in voting to void the law. It was Chief Justice Roberts who joined the traditionally liberal Justices, even writing the majority opinion. Perhaps most telling was that Chief Justice Roberts took the time to state very clearly that deciding the merits of the policy were not within the Court’s purview. Of the Court’s rule in deciding the ACA case, Chief Justice Roberts said, ‘[it] is not our job to protect the people from the consequences of their political choices’.

This ruling, as unexpected as it was in some ways, leaves mandatory insurance on the statute books and upholds the Obama administration’s key piece of legislation. The battle now is a political one, and with arguments by the Republican Party to repeal the Act, if Mitt Romney wins the Presidential Election in November 2012, the debate could be opened up again.

As for me, I will learn my lessons from this ruling; give every legal argument you can in court (it maybe your third backup that wins it) and never attempt to guess a Supreme Court opinion.


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