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Supreme Court turns back Obamacare challenge, allowing individual coverage mandate to stand

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USA TODAY
USA TODAY
 2021-06-17

WASHINGTON – The Supreme Court turned back another major challenge to the Affordable Care Act on Thursday, allowing the 2010 law to stand despite objections from Republicans who had once again questioned its constitutionality.

In a 7-2 ruling, the court issued a narrow ruling holding that the conservative states that sued over the law did not have standing to do so because they were not directly harmed.

Though the court's decision did not touch on the merits of the legal issues raised by the states, Democrats praised it as the latest indication of permanency for the controversial law, a centerpiece of former President Barack Obama's policy agenda. Republicans in Congress, the White House and several states have for years sought to chip away at the law's  provisions or unwind it entirely.

"With millions of people relying on the Affordable Care Act for coverage, it remains, as ever, a BFD," President Joe Biden tweeted shortly after the court handed down its decision, referencing a moment in 2010 when he was caught on a hot microphone praising the law with a swear word. "And it’s here to stay."

After upholding the law in 2012 and again in 2015 , the court was faced with a new challenge to the requirement that every American obtain insurance coverage, known as the individual mandate, or pay a penalty.

The penalty was initially upheld under Congress' constitutional power to levy a tax, but the Republican attorney general in Texas, Ken Paxton, argued it stopped being a tax once President Donald Trump signed a law in 2017 cutting it to zero.

Texas, joined by 17 other states, didn't stop there: It told the court that the rest of Obamacare also had to be thrown out because its other provisions – such as protections for people with preexisting conditions and the prohibition on lifetime benefit caps – rested on the requirement that all Americans obtain health coverage in some form.

But the nation's highest court never even got to those questions in its opinion Thursday. Instead, it held that the states that filed the suit lacked the right to do so. The states sued because, they claimed, they would have to pay a share of the cost for new enrollees in Medicaid and similar programs. But by eliminating the penalty, the court found, the states could no longer reasonably say they would have to pay more.

"Neither logic nor intuition suggests that the presence of the minimum essential coverage requirement would lead an individual to enroll in one of those programs that its absence would lead them to ignore," Associate Justice Stephen Breyer wrote for the majority. "A penalty might have led some inertia bound individuals to enroll. But without a penalty, what incentive could the provision provide?"

Republicans slammed the decision, and the law, noting that the high court didn't address the underlying legal questions in the case. Paxton  faulted the court for deciding to "avoid the question of constitutionality." He said allowing the health care law to stand "spells doom for the principles of federalism and limited government."

Sen. Bill Hagerty, R-Tenn., said that Congress "must focus on reforms" to change the law.

"The Obamacare individual mandate – a provision that forces someone to purchase insurance whether they want to or not – is unconstitutional," Hagerty asserted.

Despite the recent focus on the Supreme Court's shift to the right , the opinion drew both conservative and liberal justices – and a bigger majority than the past Obamacare cases. Breyer was joined by Chief Justice John Roberts and Associate Justices Clarence Thomas , Sonia Sotomayor , Elena Kagan , Brett Kavanaugh and Amy Coney Barrett . Associate Justices Samuel Alito and Neil Gorsuch signed a dissenting opinion.

"Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two," Alito wrote, adding that he would have sided with the states. "In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue."

The case was among the most consequential the nation's highest court has considered this term, and it follows more than a decade of bitter partisan dispute over a law that expanded coverage to some 23 million Americans. Obama said in a statement that the decision reaffirmed the notion that "the Affordable Care Act is here to stay."

Earlier: Supreme Court appears unlikely to topple Affordable Care Act

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A. Michael Khoury stands outside of his Leading Insurance Agency, which offers plans under the Affordable Care Act (also known as Obamacare) on January 28, 2021 in Miami, Florida. President Joe Biden signed an executive order to reopen the Affordable Care Act’s federal insurance marketplaces from February 15 to May 15. Joe Raedle, Getty Images

The fate of Obamacare was top of mind for senators during the confirmation of Barrett last fall. Democrats on the Senate Judiciary Committee urged her to recuse herself from the Texas case because, as a law professor at Notre Dame, she had openly criticized the court's earlier rulings upholding the law. Barrett, seated in October to replace the late Associate Justice Ruth Bader Ginsburg , refused to commit to recusal but asserted she wasn't "on a mission to destroy the Affordable Care Act."

California and other blue states stepped in to defend the law after Trump's Justice Department declined to do so. They argued that the zeroed-out penalty at the heart of the case couldn't be unconstitutional because it didn't require anyone to do anything. And if it was so central to the rest of the health care law, they added, then Congress would have repealed the entire law instead of just one piece of it.

Roberts made a similar point during oral argument last fall, pointing out that Congress had not tried to do away with the entire law when it removed the tax penalty in 2017. In fact, at the time, several Republican lawmakers said explicitly that removing the tax would not undermine other protections.

“They wanted the court to do that, but that’s not our job,” Roberts, who has played a leading role in rescuing the law in the past, said during the November argument.

More: Court rejects retroactive sentence reductions for small amounts of crack cocaine

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A protester holds a sign in front of the Supreme Court in Washington, D.C., on November 10, 2020, as the high court held oral argument in the long-brewing dispute over the constitutionality of the 2010 Affordable Care Act. NICHOLAS KAMM, AFP via Getty Images

The landmark Affordable Care Act, hotly debated early in Obama's tenure, created health care marketplaces that nearly 12 million Americans who don't get insurance through their work or a government program used last year to buy coverage. It also created incentives that 36 states took advantage of to expand their Medicaid programs.

Obamacare also imposed new requirements on other segments of the industry, which accounts for nearly one-fifth of the nation's economy. For instance, it prohibited insurance firms from denying coverage to people with preexisting conditions, such as cancer or diabetes, that had previously left ill Americans stuck without insurance.

Lawmakers at the time were concerned the policy would encourage people to forgo coverage until they got sick: Why pay for a policy in health if insurance companies would be required to provide coverage after a patient became ill? The solution: The so-called individual mandate, a requirement that most Americans have coverage or pay a penalty.

Conservatives balked at the idea that the government could force people to purchase something, and the individual mandate quickly became one of the most controversial aspects of the law. Trump repeatedly sought to undermine the individual mandate, first by signaling that his administration wouldn't enforce it and then by supporting the 2017 law that technically kept the penalty on the books but set the amount to $0.

In December 2018, federal District Judge Reed O'Connor ruled that because the Supreme Court originally upheld the individual mandate under Congress' power to tax, it could not survive with a penalty that had been zeroed out. His ruling, which was put on hold while it was appealed, threatened to wipe out the entire health care law.

A panel of the New Orleans-based U.S. Court of Appeals for the 5th Circuit agreed that the individual mandate is unconstitutional "because it can no longer be read as a tax." But rather than strike down the entire law, as O'Connor would have done, the panel sent the case back to the district court for additional analysis to determine which parts of the law could be separated from the individual mandate.

Both courts found that the states had standing to sue because the law increased their costs of complying with reporting requirements that are part of the individual mandate.

Contributing: Ledyard King

This article originally appeared on USA TODAY: Supreme Court turns back Obamacare challenge, allowing individual coverage mandate to stand

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