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Apr 09 2013

Roberts Opinion on Obamacare

Justice Roberts opinion on Obamacare has been characterized in many ways, but most of them have been flavored by expectations set before the decision was rendered.

Here is Roberts opinion:
11-393 National Federation of Independent Business v. Sibelius
(decided June 28, 2012)

The case is in regards to the Patient Protection and Affordable Care Act (commonly called PPACA or just ACA) that was passed by Congress in 2010 and is referenced as “26 U. S. C. §5000A” or just §5000A in many parts of the opinion.

A key provision of the act required most Americans to maintain “minimum essential” health insurance coverage or pay a penalty to the IRS. This is known as the, “individual mandate”.

Another key provision of the act expanded Medicaid and increased the number of individuals that states must cover. It also penalized states that do not comply by all federal Medicaid funds.

The judgement ruled that:

  • The Anti-Injunction Act (AIA) does not bar the suit.
  • The individual mandate is not valid under the commerce clause and the necessary and proper clause.
  • The individual mandate must be construed as a tax, if that is reasonable.
  • The individual mandate is upheld as within the power of Congress to levy taxes.

Here is a key quote from Roberts ruling:

The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax.

Thus, the ruling maintains that Congress does not have the power (under the Commerce clause) to compel citizens to purchase health insurance. While the Commerce clause may grant Congress some ability to regulate the behavior of activity, it does not give Congress the power to compel activity.

While striking down the individual mandate under the Commerce clause, Roberts also ruled that the penalty for failing to buy health insurance may be considered as a tax and Congress does have a broad power to impose taxes. Despite the attempts by Democrats to avoid having the ACA labeled as a tax, the penalty was placed within the tax code, will be collected by the IRS and will yield revenue for the Government.

The debate over whether or not the payment required for not buying health insurance is a “penalty” or a “tax” was key in this ruling. Roberts admits that weighing this is a close call, and points out that there are no legal penalties for not paying the tax. It is possible that with some criminal liability for not paying the tax, Roberts would have considered it to be more like a penalty than a tax. The fact that there is no criminal penalty for not paying the ACA “tax” makes it seem the system is not economically feasible. However, if criminal liability is added, the law may be open to a future constitutional challenge.

Here is another interesting quote from Roberts ruling:

Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.

p.s.
The Constitution requires bills raising revenue to originate in the House of Representatives. When the ACA was being debated in Congress, concerns over that requirement were brushed aside by Democrats who wanted to avoid Republican attempts to frame the bill as a tax. Claiming that it was not a tax, they scrapped the House version and passed a Senate version (although by “deeming” it passed). Since Roberts ruling has established that it is a tax, this may now open the door for a future constitutional challenge.