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Supreme Court Rejects GOP Challenge to Affordable Care Act (3)

June 17, 2021, 5:56 PM

The U.S. Supreme Court rejected the latest Republican attack on the Affordable Care Act, preserving a landmark law that provides health insurance to 20 million people.

The 7-2 ruling marks the third time the Supreme Court, despite its increasingly conservative makeup, has backed central parts of Obamacare, as the law is also known. The GOP has been trying to wipe out the measure since it was enacted in 2010 under Democratic President Barack Obama.

With health care accounting for a sixth of the U.S. economy, the stakes were massive. Advocates for patients, doctors, hospitals and insurance companies urged the court to uphold the law, warning of chaos should the measure be invalidated.

The ruling is “a big win for the American people,” President Joe Biden tweeted. “With millions of people relying on the Affordable Care Act for coverage, it remains, as ever, a BFD. And it’s here to stay.”

Opponents were trying to use a Republican-backed 2017 tax change to invalidate the law. The change eliminated the penalty for noncompliance with the so-called individual mandate to acquire insurance. That provision had been central in 2012 when the Supreme Court upheld the law as a legitimate use of Congress’ constitutional taxing power.

Writing for the court, Justice Stephen Breyer said the states and people who filed the latest suit -- later backed by former President Donald Trump’s administration -- lacked legal standing to go to court. Breyer said the people couldn’t show they were injured by the now-toothless mandate, as required under the Constitution.

“To find standing here to attack an unenforceable statutory provision would allow a federal court to issue what would amount to in advisory opinion without the possibility of any judicial relief,” Breyer wrote.

Breyer also rejected contentions by Texas and other suing states that they had standing. The states said the individual mandate is costing them money by causing more people to enroll in the Medicaid insurance program for the poor.

“A penalty might have led some inertia-bound individuals to enroll,” Breyer wrote. “But without a penalty, what incentive could the provision provide?”

Dissenting Conservatives

Justices Samuel Alito and Neil Gorsuch dissented, saying they would have let the suit go forward and dismantled much of the law.

“No one can fail to be impressed by the lengths to which this court has been willing to go to defend the ACA against all threats,” wrote Alito, who was in dissent in both previous Obamacare cases.

In a concurring opinion, Justice Clarence Thomas said he agreed with Alito’s analysis of the previous cases, but agreed with the majority that the latest challengers lacked the right to sue. “Although this court has erred twice before in cases involving the Affordable Care Act, it does not err today,” Thomas wrote.

QuickTake: How Obamacare Survived Trump and What Biden Is Doing

Three other members of the court’s conservative wing -- Chief Justice John Roberts and Trump-appointed Justices Brett Kavanaugh and Amy Coney Barrett -- joined Breyer in the majority.

The ruling is “historic,” said House Speaker Nancy Pelosi, a Democrat from California. “We thank the court in its wisdom.”

The top three House Republicans, including Leader Kevin McCarthy of California, said in a joint statement that “the ruling does not change the fact that Obamacare failed to meet its promises and is hurting hard-working American families.”

The ACA expanded the Medicaid program for the poor, provided consumers with subsidies, created marketplaces to shop for insurance policies, required insurers to cover people with pre-existing conditions, and let children stay on their parents’ policies until age 26.

A federal appeals court had declared the individual mandate unconstitutional without the tax penalty and left doubt about the rest of the law. A group of Democratic-run states led by California and the U.S. House of Representatives defended the law.

Future Litigation

Josh Blackman, a law professor at the South Texas College of Law Houston, said the court left the door open for another constitutional challenge in the future. If the federal government tries to enforce another provision of Obamacare against someone, that person could try to argue Obamacare’s individual mandate is unconstitutional and the entire law must fall, he said.

“This doesn’t resolve the validity of the ACA,” Blackman said. “It just sort of kicks it down the road.”

But Jonathan Adler, a law professor at Case Western Reserve University School of Law, said the only way the same argument could be raised is if the federal government tries to enforce the individual mandate.

“The government will not do that,” he said. “I don’t think that’s a risk.”

Texas could try to come back and shows reams of evidence of how many people are going to enroll in its plans because of this mandate, but it’s unlikely, said Katie Keith, a health law professor at Georgetown University.

“I don’t think they can do that and I think the court here would even be skeptical about that,” she said. “I think it’s a very low risk that that happens but you never say never.”

While there may not be another broad constitutional challenge ahead, litigation over Obamacare will continue.

“There will not be a big omnibus challenge to the entire statute, but there will continue to be ongoing litigation about the administration and enforcement of the law, and that will go on for some time,” Adler said.

The case is California v. Texas, 19-840.

(Updates with additional Breyer comment in ninth paragraph, reaction at end of story.)

--With assistance from Billy House and Lydia Wheeler.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Tony Czuczka

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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