The Supreme Court and the ACA

First, it is good to get this mattered settled quickly.  Serious constitutional issues are on the table for resolution, make no mistake.  For some time, it seemed the Obama Administration preferred to slow walk the process.  Their recent desire to speed it up reflects their growing confidence that the SCOTUS will decide the case in their preferred direction. 

Second, the Administration’s optimism is tied to recent rulings issued by four federal Appeals Courts.  Only one of the four, the 11^th Circuit in Atlanta, ruled that Congress exceeded its authority by passing the individual mandate.  The 6^th and the DC Appeals Courts both upheld the provision’s constitutionality, and both panels include opinions written by respected conservative Republican jurists (Jeffrey Sutton on the 6^th, named by George W. Bush and Laurence Silberman on the DC Court, named by Ronald Reagan).  The fear of a partisan divide among court opinions was true at the District level, and not at the Appeals Court level (one Dem appointee sided with the majority in the 11^th as well).  Let’s breathe a sigh of relief on this score.  The 4^th Circuit dismissed its anti-ACA suit because of something most Americans have never heard of, the Anti-Injunction Act.

Third, pay attention to an obscure 1867 federal law called the Anti-Injunction Act (AIA).    Passed after the end of the Civil War, it disallows anyone from suing to prevent the collection of a federal tax until the tax actually takes effect – to prevent persons from avoiding taxation by suing before a tax takes effect.  This brings up the thorny question of whether the individual mandate is or is not a “tax.”  Three of the Appeals Courts decided it was not, and one decided it was.  The ACA calls the individual mandate requirement a “penalty” – though it’s to be collected as part of your annual spring tax reporting, and it’s to be enforced by the Internal Revenue Service.  The AIA has been interpreted over time to use a broad definition of the term “tax.”  (Even the U.S. Constitution uses three different terms – tax, impost, and duty.)  Using the AIA line of reasoning, the 4^th Circuit dismissed its ACA lawsuit as not ripe before 2015.  The SCOTUS has decided to devote one of the five hours of oral argument to this issue.

Fourth, pay attention to something called “severability.”  Severability means that if one provision in a law is tossed out, the rest of the law stands.  Normally, laws routinely contain severability clauses, though the ACA did not because its Senate drafters expected to insert it into the law at the conference committee stage; but no conference committee was formed in the frenetic process leading to passage, so no severability clause.  But prior court precedent says that severability is implied anyway. 

The Obama Administration surprised many observers, including me, by arguing that if the Individual Mandate goes down, then the insurance market reform known as “guaranteed issue” (see yesterday’s post under Title I) must also fall.  The SCOTUS has decided to consider severability even more broadly framed, even though none of the various Appeals Court decisions invoked severability at all.  Observers believe the Obama Administration’s argument is based on: a. a desire to force the court to strike down something popular (guaranteed issue and elimination of pre-existing condition exclusions) if they strike down something unpopular (the individual mandate); and b. confidence that the SCOTUS will rule their preferred way. 

Fifth, the consideration of Medicaid in the ruling is a surprise.  None of the Appeals Courts struck down the Medicaid expansion in Title II of the ACA.  If it had not been included today, no one would have been surprised.  The inclusion means that at least four justices believe the states have an argument here.  That’s worth worrying about.

My non-lawyer guess: SCOTUS upholds the law by a 6-3 vote. 

May you live in interesting times!  Mission accomplished.