Awaiting the Obamacare Decision - Issues and Possible Outcomes

Edward White

6/19/2012 12:01:00 AM - Edward White
Within the next two weeks we will know the outcome of the ObamaCare case, filed by twenty-six States, pending at the United States Supreme Court. The outcome of that case will directly impact the challenge to ObamaCare that the American Center for Law & Justice (“ACLJ”) filed in Seven-Sky v. Holder, also pending at the Supreme Court.

The four issues in the States’ case are (1) whether the Anti-Injunction Act(“AIA”) applies to this case (which would prevent the Court from deciding it); (2) whether the individual mandate (which requires Americans to buy health insurance from private companies for the rest of their lives or pay annual penalties) is constitutional; (3) whether the individual mandate is severable from the rest of ObamaCare and, if not, whether the entire law should be invalidated; and (4) whether ObamaCare’s Medicaid expansion is constitutional.

The following is an outline of the Supreme Court’s options in deciding these issues.

Anti-Injuction Act Issue

The AIA was enacted soon after the Civil War to stop lawsuits seeking to prevent the federal government from assessing and collecting taxes. For the Supreme Court to hold that the AIA applies to the ObamaCare litigation, it would have to conclude that the penalty designed to enforce the individual mandate is a tax. If the Court concludes that the penalty is a tax and that the AIA applies, the Supreme Court and all other courts would be barred from resolving the constitutionality of the individual mandate for a number of years.

In that situation, the following would have to happen before the Court could resolve the individual mandate issue: the Court would have to wait until the individual mandate goes into effect on January 1, 2014, and then wait until the person, who would be challenging the constitutionality of the individual mandate, pays the penalty, which would be due on April 15, 2015. That person would then file a lawsuit, which would not reach the Supreme Court until 2017 at the earliest.

Thus, if the Court determines that the AIA applies, the Court could not decide the constitutionality of the individual mandate and its severability for several years. Application of the AIA, however, would not stop the Court from resolving the Medicaid expansion issue.

Individual Mandate Issue

The individual mandate is the main component of ObamaCare. It requires millions of Americans to buy and indefinitely maintain health insurance or face annual penalties. The question is whether Congress’s power to regulate interstate commerce includes the power to require Americans to buy a product (here, health insurance) just because they are Americans.

If the Court upholds the individual mandate, the Court will authorize Congress to tell Americans what to buy and what not to buy, no matter the product; if we refuse, we will have to pay annual penalties. If the Court upholds the individual mandate, it does not need to address the severability issue and would move directly to the Medicaid expansion issue.

On the other hand, if the Court invalidates the individual mandate, then the Court will address the issue of whether the individual mandate can be severed from the rest of ObamaCare and it will also address the Medicaid expansion issue.

Severability Issue

If the Court holds that the individual mandate is unconstitutional, it will then consider whether the other provisions of ObamaCare can function without the individual mandate. The Court has three options: (1) invalidate just the individual mandate, but leave the rest of ObamaCare intact; (2) invalidate both the individual mandate and other related parts of ObamaCare; and (3) invalidate all of ObamaCare along with the individual mandate.

How the Court rules on the severability issue is important not just as it applies to ObamaCare, but also as it applies to the recent HHS mandate, which is authorized by other ObamaCare provisions.

The HHS mandate requires employers with fifty or more employees to subsidize, provide, and/or facilitate sterilization, contraceptives, and abortion-inducing drugs, regardless of their religious beliefs. There are multiple lawsuits challenging the constitutionality of the HHS mandate, including the one filed by the ACLJ in O’Brien v. HHS . If the Court invalidates all of ObamaCare, or at least those provisions that authorize the HHS mandate, then the HHS mandate will be invalidated by implication as it will no longer have a legal basis to exist.

Medicaid Expansion Issue

Through ObamaCare, the federal government has reorganized Medicaid to compel States to add millions of additional people to their Medicaid roles, which will greatly increase the costs to each State.

As noted previously, resolution of the Medicaid expansion issue is not dependent on the resolution of the AIA issue or the individual mandate issue. If the Court holds that the AIA applies, it can still reach the Medicaid expansion issue and uphold or invalidate it. If the Court reaches the individual mandate issue, the Court can uphold or invalidate the Medicaid expansion issue regardless of how it rules on the individual mandate issue.

Summary

The Court’s ObamaCare decision is expected by the end of this month. The Court has a multitude of options on how to resolve the case. Once the decision comes out, the ACLJ will provide analysis of the decision and its implications on the pages of our Docket Blog.

In the meantime, you can access additional information about the ObamaCare litigation by clicking here for previous Docket Blog entries. You can also read the three friend-of-the court briefs the ACLJ filed in support of the States’ challenge to ObamaCare by clicking on the following links: Anti-Injunction Act brief, individual mandate brief, and severability brief.