Obamacare and the Court

Handing Health Policy Back to the People

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Chief Justice John Roberts in front of the Supreme Court. (Larry Downing / Courtesy Reuters)

In the weeks and months before the U.S. Supreme Court delivered its ruling on the constitutionality of the Affordable Care Act (ACA) in National Federation of Independent Business v. Sebelius, some pundits dubbed the lawsuit "the case of the century." Whatever the Court decided, commentators and activists on both sides of the aisle thought that it would resolve the fate of President Barack Obama's health-care reforms. The ruling would reverberate throughout the worlds of law and politics.

Instead, the Court surprised everyone. A five-member majority led by Chief Justice John Roberts upheld the ACA on grounds that few Court watchers had anticipated. The case may well find its way into the annals of the law. But in the end, Roberts' opinion removed the Court from the debate about health care and put the conversation back in the realm of politics.

BUYING THE BROCCOLI ARGUMENT

The debate over health care began when Obama promised to make health insurance affordable for all. To succeed, he needed to cut a deal with the health-care companies, which had long opposed such reform. In return for an expansion of the pool of insurance subscribers to cover their costs, the insurance companies agreed to neither deny coverage to those with preexisting conditions nor impose higher rates on them. To achieve this compromise, the Obama administration devised what would become known as the individual mandate: the government would require Americans to either purchase health insurance or pay a set amount to the U.S. Treasury. Republicans, opposed to such an expansion of government, fiercely resisted the bill in Congress and, once it passed, promised a full-scale campaign to overturn it. Within weeks of the bill's passage, Republican attorneys general in 26 states had launched a series of legal challenges to the legislation.

In court, opponents of the ACA presented two primary claims. First, they argued that the individual mandate exceeded the bounds of the commerce clause, the power given to Congress by the Constitution to regulate interstate commerce. The states also targeted the legality of the ACA's extension of Medicaid, a move that would cover many who were previously uninsured and deny existing Medicaid funding to states that did not comply.

Initially, few in the mainstream legal community took either claim seriously. And with good reason: neither had strong support in existing judicial precedent or practice. Since the New Deal, the Supreme Court has given Congress vast authority to regulate commerce. In 1942, the Court unanimously held in Wickard v. Filburn that Congress could forbid a farmer from growing wheat on his farm for his own consumption. Congress had set out to stabilize wheat prices, and if all farmers began growing their own wheat instead of buying it, the justices reasoned, then demand would drop and so would prices. The Court thus recognized that even the most local economic decisions could affect integrated interstate markets, and it empowered Congress to regulate them.

Given the logic of Wickard v. Filburn, the ACA seemed well within the bounds of Congress' powers. Under the existing law prior to the ACA, those who could not afford medical care ended up receiving it at emergency rooms for free. The costs were then passed onto everyone else in the form of higher insurance premiums. According to a study by the Henry J. Kaiser Family Foundation, in 2008, federal and state governments paid $43 billion to health-care providers to cover the uninsured. Many experts agreed that skyrocketing health-care costs were damaging the U.S. economy. Like the farmer's decision to opt out of the interstate market for wheat, the failure of millions to obtain health insurance was harming the interstate health-care market.

The ability of Congress to attach conditions to federal spending grants, such as Medicaid, seemed similarly invincible. As much as the Supreme Court has recognized the expansive power of Congress to regulate commerce, it has granted the legislative branch even more leeway to tax and spend on behalf of what the Constitution refers to as "the general welfare." Congress regularly adds all sorts of conditions to spending grants, giving recipients, including the states, the choice to accept those conditions or not take the money. Since the New Deal, the Supreme Court has not invalidated a single spending condition on constitutional grounds.

This all seemed uncontroversial and settled, until a powerful idea took hold. Randy Barnett, a law professor at Georgetown University and longtime champion of limiting the scope of Congress' power under the commerce clause, devised a challenge: although the legislative branch had sweeping power to regulate existing markets, he argued, that power did not extend to forcing people to participate in those markets. For the first time in history, Barnett and his conservative colleagues contended, Congress had tried to regulate market "inactivity" rather than "activity." In their view, people without health insurance had made a reasoned decision not to participate in the market, and Congress could not compel them to join it. The Tea Party and its fellow travelers took up Barnett's argument, using broccoli as a rallying cry: if Congress could make Americans buy health insurance to prop up the market and improve public health, it could make Americans buy and eat broccoli, too.

To the surprise of many scholars, the legal case against the ACA soon gained momentum. Several federal district courts -- all led by judges appointed by Republican presidents -- overturned the mandate. The Obama administration initially attempted to slow the process down, but after a federal appellate court in Atlanta ruled against the ACA, the White House decided to bring the case immediately to the Supreme Court. Both Republicans and Democrats thought that the outcome of the Court's ruling would have profound implications for the 2012 presidential election, and both sides hunkered down for a bitter post-decision fight.

COURTING VICTORY

Once it became clear that the Supreme Court would decide the health-care case before this year's presidential election, the justices found themselves caught in a partisan wrangle. The intensity of the moment was reminiscent of the turmoil during Bush v. Gore, which decided the 2000 presidential election, or during the Court-packing controversy of the 1930s, when President Franklin Roosevelt encountered so many challenges to his New Deal from conservative justices that he proposed filling the Supreme Court with additional justices to get his way (the Court ultimately caved instead). From the start, the political battle over health care loomed over the ACA case and what its outcome would mean.

The Court had become deeply politicized well before the health-care case. Liberals, wary of the Court's rightward turn with the addition of Roberts and Samuel Alito, felt their fears were justified after the Court voted in January 2010 to overturn campaign finance restrictions in Citizens United v. Federal Election Commission. When Elena Kagan replaced John Paul Stevens on the bench later that year, the Court became truly split along party lines: the five conservative justices had all been appointed by Republican presidents, and the four on the left, by Democrats.

But even with such a clear ideological split, many legal experts expected at least some of the conservative justices to side with the liberals in upholding the ACA. Some analysts thought that the swing vote would come from Justice Anthony Kennedy. Although unequivocally conservative, he had often voted with the liberal justices, such as in the Court's decision in Lawrence v. Texas to strike down state bans on sodomy. Yet Kennedy had long supported states rights, which might lead him to oppose the ACA on the grounds that it granted Congress powers more properly held by the states. Others suspected that Roberts might be willing to vote with the liberals. A staunch conservative, Roberts had nonetheless made clear that he sought to preserve the Supreme Court's nonpartisan reputation. In fact, other than in his controversial ruling in Citizens United, Roberts had steered the Court rather quietly through the political turbulence of the past several years. If Kennedy voted to declare the health-care law constitutional, many thus reasoned, Roberts might do so as well. Conventional wisdom suggested that the justices would uphold the ACA, perhaps by as wide a margin as seven to two.

Yet once the Court began hearing oral arguments, predictions quickly shifted. The conservatives on the Court, including Kennedy, asked deeply skeptical questions of the government's lawyer, Solicitor General Donald Verrilli. At one point, Kennedy said of Verrilli's argument that "the government is saying that the federal government has a duty to tell the individual citizen that it must act. . . . And that changes the relationship of the federal government to the individual in a very fundamental way." Suddenly, it seemed as though the Court would overturn the ACA. The Obama administration remained outwardly optimistic. Pundits, however, began asking not whether the Court would strike down the individual mandate but how much of the ACA would go with it.

On June 28, 2012, when the Supreme Court announced its ruling, both the way the individual justices voted and the reasoning of the decision came as a shock to almost all Court watchers. The chief justice had crossed partisan lines, writing the lead opinion upholding the individual mandate by a five-to-four vote. The other conservative justices, meanwhile, wrote an unusual jointly authored dissent.

The Court's reasoning in preserving the individual mandate proved even more unexpected. Roberts and the conservatives agreed that the individual mandate exceeded the power of Congress to regulate commerce. But Roberts then pivoted, joining with the Court's four liberals in holding that the mandate could be characterized not as a penalty but as a tax and so was well within Congress' broad power to tax for "the general welfare." Thus, the Court spared the individual mandate and upheld most of the ACA.

On the matter of the ACA's Medicaid provision, however, the liberal justices Kagan and Stephen Breyer joined with the right in holding that Congress could not condition the granting of preexisting Medicaid funds to states on whether those states would agree to accept the ACA expansion. According to the Court, the states had a choice: they could keep their existing funds under the old program, or they could sign up for the new one. For the first time since the New Deal, the justices had struck down a condition attached to a congressional spending grant.

The Court's decision had two historical analogues. Roberts' legal pirouette -- upholding the ACA while limiting Congress' power under the commerce clause -- seems similar to that performed by Chief Justice John Marshall in Marbury v. Madison. That landmark case, decided in 1803, arose after Thomas Jefferson's Republicans crushed John Adams' Federalists in the election of 1800 and the latter sought to pack the judiciary before relinquishing power. James Madison, the incoming Republican secretary of state, refused to deliver a judicial commission to a Federalist nominee named William Marbury, preventing Marbury from assuming his position, and Marbury sued to force Madison to deliver it. Marshall understood that if he ruled in favor of Marbury, the Republicans would simply ignore him and the Court would lose its credibility. To solve the dilemma, Marshall concluded that the provision that enabled Marbury to sue was itself unconstitutional. He thus managed to avoid awarding Marbury his commission, but he recognized the principle of judicial review: the power of the judiciary to review the constitutionality of actions taken by the legislative and executive branches.

Roberts seems to have achieved a similar long-term victory in his health-care decision. By upholding the mandate, he preserved the standing of the Court and prevented the left from making the Court's legitimacy an election issue. Yet in labeling the mandate a tax rather than a penalty, he gave the Republicans the ability to call the ACA a giant tax hike, exactly the scenario that the Democrats had hoped to avoid by deeming the mandate a penalty in the first place. He also accepted the conservatives' argument that Congress could not regulate inactivity under the commerce clause, potentially setting the stage for future limitations on congressional power.

At the same time, Roberts' vote echoed the actions of two conservative justices during Roosevelt's battle with the Supreme Court over the New Deal. Roosevelt's attempt to fill the Court with liberal justices ignited a political brawl that captivated the country in the first half of 1937. In the midst of it, Chief Justice Charles Evans Hughes and Justice Owen Roberts, recognizing the threat to judicial independence posed by Roosevelt's Court-packing plan, abandoned the anti-New Deal faction of the Court and voted to uphold two New Deal measures. The "switch in time that saved nine," as their maneuver came to be called, saved the president's agenda but undermined support for his Court-packing proposal, which subsequently failed.

Press reports in the days following the Court's health-care ruling seemed to confirm the comparison between the New Deal justices and Roberts. According to Jan Crawford of CBS News, two sources "with specific knowledge of the Court's deliberations" had confirmed that Roberts had originally intended to vote alongside the four conservative justices and invalidate the individual mandate but changed his mind. Why he did so remains a matter of speculation. It is possible that the other conservative justices insisted on striking down not just the individual mandate and some related provisions, such as the rule forcing insurance companies to accept those with preexisting conditions, but also the entire ACA, a step that Roberts did not want to take. It is also possible that Roberts simply worried that striking down the ACA would jeopardize the reputation of the Court. Whatever the case, his decision to uphold the ACA seems contrary to his conservative inclinations. The question is whether his judgment will set long-lasting legal precedents or have critical political implications.

JUDGING THE SCORE

Partisan debate about health care had raged before the Supreme Court's decision, with both the left and the right preparing to claim victory depending on whether the verdict went its way. But to some extent, the ruling left everyone a winner.

To begin with, Obama clearly emerged triumphant. In truth, he might have won whatever the outcome. Had the Supreme Court overturned the ACA, it would have energized the Democratic base. By upholding the act, however, the Court has enhanced the president's stature by ratifying his signature domestic policy achievement. Yet the Republican presidential candidate Mitt Romney may also profit from the decision. By labeling the individual mandate a tax, Roberts handed the Republicans a prime talking point. It took Romney several days to agree with the chief justice, given that as governor he had imposed just the same "tax" in Massachusetts. But Romney seems to have embraced the Court's logic and begun to exploit it by accusing Obama of raising taxes.

Roberts also benefited from the decision. Many on the right have expressed bitter disappointment and a sense of betrayal following his ruling, with some even calling for his impeachment. Meanwhile, the left has lauded him as a heroic centrist. But Roberts will almost certainly return to his conservative values soon enough, especially as the Court tackles such issues as affirmative action, voting rights, and gay marriage. Rumors suggest that the other conservative justices have decided to turn their backs on Roberts. If that is in any way true, it would be a mistake. Justice Antonin Scalia alienated former Justice Sandra Day O'Connor when he ridiculed her in opinions and expressed his displeasure with her frequent swing voting, and there would be little profit in repeating that tactic with Roberts, who remains the fifth conservative vote necessary for so many issues.

The American public also got what it wanted. A cursory glance at the polls in the lead-up to the decision, which regularly reported that a plurality of Americans opposed the ACA, would suggest otherwise. But a closer reading shows that although some voters tended to dislike the act in general and a majority opposed the mandate in particular, a strong majority also favored several individual aspects of the health-care bill, such as the provision allowing children to remain on their parents' policies until age 26 and that forbidding insurance companies from denying coverage to those with preexisting conditions. Roberts addressed public concerns about the mandate, ruling that people did have a choice: buy insurance or pay a relatively small tax. And he saved the parts of the bill with broad support.

In the immediate aftermath of the decision, partisans on both sides struggled to decide whether the ruling helped or harmed their political fortunes. Roberts' ruling split the difference, allowing each side to claim some measure of victory.

THE LEGAL STATE

The political effects of the ACA decision may not prove as decisive to this year's election as previously thought, and the constitutional validity of the health-care bill is now certain. The most interesting implications of the ruling, then, may play out in the legal arena itself.

To begin with, this case was never truly about federalism; the real underlying concern was for individual liberty. Tea Party activists would have protested against any state-imposed mandate to buy health insurance as vigorously as they did against the ACA. Yet states have long issued such mandates; for example, 47 states require motorists to purchase auto insurance to obtain and keep a driver's license. This fact made it difficult to argue the case from the perspective of individual liberty. Federalism thus offered the only avenue of possible success.

Although federalism was only a front for concerns about liberty, the Supreme Court's decision ended up touching on a number of critical states rights issues, the first being the commerce power. The take of the five conservative justices on the central question of the case, the validity of the legislation under the commerce clause, will likely matter much less than anyone thinks. The right fought hard for exactly this ruling, and some on the left believe that it may impede the future ability of Congress to regulate commerce, particularly commercial inactivity. But Congress has gone more than 200 years without trying to regulate economic inactivity, and it did so in this instance only to avoid calling the individual mandate a tax. As a result, the Court's holding on the ACA will likely not limit Congress' actual power in this area very much.

On the other hand, the issue that broke the least ground as a legal matter, the Court's ruling on the authority of Congress to tax, may prove more important. The Supreme Court has traditionally given Congress broad authority to levy taxes, and it would have come as a shock had the justices decided to strike down the individual mandate as an individual tax. But Roberts essentially argued that although Congress could not regulate inactivity through a penalty, it could do so through a tax. In other words, Congress could not compel people to buy broccoli through a fine, but if they chose not to buy broccoli, it could tax them for not doing so. In coming to that conclusion, the chief justice gave Congress the license not just to tax activities that people do perform but also to tax ones that they do not perform -- something a revenue-starved Congress may well take advantage of in the future.

The Court's decision to forbid Congress from conditioning existing Medicaid funds on states' agreements to accept the new plan will also affect the legal universe. The justices concluded that the condition on the Medicaid grant in the ACA was too coercive, and thus invalid, but it is difficult to understand the precise reasoning behind that from their decision. True, the amount of money at stake for states in choosing whether to accept the conditions was far greater than in past grant situations, making the government's conditions more onerous. But the line between inducing state participation, which is legal, and coercing it, which is not, remains hard to identify with precision. In the wake of this decision, state and local governments will likely challenge existing conditions on other federal spending grants.

The ACA decision certainly added new elements to the debate about federal power. Although the limitation on the regulation of commerce may not amount to much, the Court did give Congress room to explore new methods of taxation and invited state and local governments to challenge the ability of Washington to condition their participation in federal programs. The health-care case will thus change the legal landscape in some ways but not in others.

THROWN OUT OF COURT

The ACA ruling may have mixed consequences for electoral politics and the law. Sometimes, Supreme Court decisions can spark fierce opposition and energize protest movements that play out over generations. But this one will probably not.

Two famous cases from the 1970s exemplify the long-term effects of controversial Supreme Court verdicts: Furman v. Georgia, which abolished the death penalty, and Roe v. Wade, which established abortion rights. The Court's ruling in Furman v. Georgia seemed sensible at the time. Polls suggested declining support for the death penalty across the country, and many states had entered moratoriums on executions and others had banned the practice entirely. Yet Furman v. Georgia generated an enormous backlash, with 35 states and Congress responding by enacting new death penalties. The justices heard the roar; shortly thereafter, they upheld most of the new statutes and have done all they could to avoid interfering with the death penalty since.

Meanwhile, in Roe v. Wade, polling data taken around the time of the decision indicated that Americans broadly supported liberalizing abortion rules, and many approved of the Court's verdict. But Roe v. Wade ignited a slow burn of opposition on the right, bringing many formerly inactive citizens into politics and aiding the election of President Ronald Reagan, a social conservative, less than a decade later. Much like in the aftermath of Furman v. Georgia, the Supreme Court backtracked from its initial ruling under intense political pressure. In the 1992 case Planned Parenthood v. Casey, the justices formally upheld Roe v. Wade but gave states permission to put new restrictions on abortion, something polls at the time showed the public favored.

In the ACA decision, Roberts likely broke with this pattern. By voting with the liberal justices to uphold the bill, he removed the spotlight from the Court and placed the issue of health care back in the realm of politics. States may reject the Medicaid expansion for fear of higher costs or because they see a political benefit to undermining the law. Individuals also face a choice: whether to buy health insurance or pay what the Court's majority deemed a tax. Some may figure that as long as they have to pay one way or another, they might as well buy insurance. Others may stand by their ideological opposition to the ACA and opt out. Meanwhile, if Romney wins the election and Republicans retain the House of Representatives and capture the Senate, they may attempt to repeal the law. If, on the other hand, Obama wins a second term, then the health-care law will likely become entrenched alongside long-standing social welfare programs such as Social Security and Medicare.

No matter what happens, however, the debate over the ACA will now take place in the public sphere rather than in the courtroom. In both Furman v. Georgia and Roe v. Wade, constitutional principles interfered with the will of a democratic majority, preventing it from fulfilling its political aspirations in the future. In the ACA ruling, however, the Court did exactly the opposite: not stand in the way of the political process but give the health-care issue back to it.

Both the left and the right today often look to the Supreme Court to fight their political battles for them rather than engage in the messy business of effectively designing and executing policy. But Roberts refused the temptation to take up that responsibility, understanding that his and the Court's reputations were at stake. In that sense, he reestablished the boundaries between the three branches of government and between law and politics. And that, above all, might be the most lasting legacy of the ACA decision.

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