Brief Summary of the Supreme Court's ObamaCare Decision

June 28, 2012 J

Anti-Injunction Act: this was a question about standing that could have prevented the Court from hearing the case at all. The Court ruled that the Anti-Injunction Act’s prohibition on challenging a tax before it is applied does not bar the court from hearing this case because Congress did not intend the individual mandate’s penalty to be a tax. Congress passed the Anti-Injunction Act and Congress passed the Affordable Care Act. Therefore, the Court should only measure Congress’s intent on whether the Anti-Injunction Act should apply to the Affordable Care Act. This is known as a statutory standing limitation; and it does not apply in this case.

Individual Mandate: the Court upheld the mandate under Congress’s taxing power but explicitly stated that the mandate is a violation of the Commerce Clause. The Commerce Clause cannot be said to extend to inactivity. Congress cannot create commerce in order to regulate it. However, Congress does have the power to issues taxes, even if those taxes are based on a citizen not taking an action. Assessing the limits of the taxing power is a constitutional question and therefore Congress’s intent that the mandate be enforced by a penalty and not a tax is irrelevant. Congress’s label does not matter. The Court looks at the Constitution, not Congress’s labels. The Court is always looking for reasons to uphold laws, not overturn them. Therefore, even though the mandate cannot survive under the Commerce Clause, it can survive under the taxing power.

Medicaid Expansion: the Court ruled that the punishment Congress exacts on the states for refusing to expand Medicaid coverage was too harsh. Congress threatened to remove not just funding for the expansion but also remove funding for the existing Medicaid provisions. The Court found that this crosses the line from putting conditions on federal funds (which is constitutional) to coercion (which is not constitutional). However, just because this punishment (Section 1396c) is unconstitutional does not mean the entire law must fall. Congress included a severability clause in that section and precedent shows that the rest of the law is not dependent on that section.

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