Supreme Court Tosses Obamacare Challenge by 18 States on Grounds of Legal Standing

By Matthew Vadum
Matthew Vadum
Matthew Vadum
contributor
Matthew Vadum is an award-winning investigative journalist and a recognized expert in left-wing activism.
June 17, 2021 Updated: June 17, 2021

By a vote of 7–2, the Supreme Court has upheld the Patient Protection and Affordable Care Act—commonly known as Obamacare—for the third time, ignoring the question of its constitutionality by ruling that those challenging it lacked the required legal standing to do so.

In a tweet, President Joe Biden said the decision was “a big win for the American people.”

Sen. John Barrasso (R-Wyo.), a medical doctor who has worked to repeal the law, lamented the ruling.

“The failed Obamacare system will stagger on as a result of this decision,” he said in a statement. “Every American’s health care has been harmed by Obamacare.”

In the 2008 election cycle, then-candidate Barack Obama promised voters that his health care plan would cut annual premiums by $2,500. After he became president, the law was enacted in 2010 without a single Republican vote in Congress during its final passage.

Insurance premiums have since skyrocketed. According to the Kaiser Family Foundation, the total cost of the average employer-sponsored family health insurance premium increased to $20,576 in 2019 from $13,375 in 2009, a 54 percent increase, and many consumers have been unable to afford premiums and have lost their insurance.

Lawsuits

In NFIB v. Sebelius (2012), the Supreme Court upheld the statute by a 5–4 margin, on the theory that the individual mandate—which forced Americans to buy health insurance even if they didn’t want it—was a valid exercise of Congress’s power to tax.

The court again upheld the mandate in King v. Burwell (2015), in a 6–3 vote, ruling, among other things, that even though the statute states that Congress makes tax credits available only on an “Exchange established by the State,” the latter phrase actually means on an “Exchange established by the State or the Federal Government,” as the late Justice Antonin Scalia put it in his dissenting opinion.

Congress later rendered the mandate null in the Tax Cuts and Jobs Act of 2017 by reducing the tax penalty for not purchasing insurance to zero, effective 2019.

Those who challenged the law in the current case argued that the revised law was unconstitutional because the individual mandate was so integral to the law that it couldn’t function without it.

In December 2018, Judge Reed O’Connor of the Northern District of Texas agreed with the challengers, ruling that the plaintiffs had standing and that the Obamacare law was unconstitutional in its entirety.

In 2017, Congress “sawed off the last leg [Obamacare] stood on,” O’Connor said. The “mandate ‘is essential to’ and inseverable from ‘the other provisions of’” the statute.

The case is actually two lawsuits that were heard together—California v. Texas and Texas v. California. Oral arguments were heard telephonically on Nov. 10, 2020.

In the Supreme Court proceeding, the Trump administration supported the legal challenge mounted by 18 states and two individual plaintiffs. California, 15 other states, and the District of Columbia, as well as the U. S. House of Representatives, intervened to defend the law.

Standing

The majority opinion was written by Justice Stephen Breyer. It was joined by Chief Justice John Roberts and Justices Clarence Thomas, Sonia Sotomayor, Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett.

Justice Samuel Alito wrote a dissenting opinion, which Justice Neil Gorsuch joined.

As enacted in 2010, the Affordable Care Act required most Americans to obtain health insurance coverage, Breyer wrote for the court.

The statute also “imposed a monetary penalty, scaled according to income, upon individuals who failed to do so,” but Congress “effectively nullified” the penalty in 2017.

“Texas and 17 other States brought this lawsuit against the United States. They were later joined by two individuals … [and] claim that without the penalty the Act’s minimum essential coverage requirement is unconstitutional.

“Specifically, they say neither the Commerce Clause nor the Tax Clause (nor any other enumerated power) grants Congress the power to enact it. … They also argue that the minimum essential coverage requirement is not severable from the rest of the Act. Hence, they believe the Act as a whole is invalid.

“We do not reach these questions of the Act’s validity, however, for Texas and the other plaintiffs in this suit lack the standing necessary to raise them.”

Article III of the Constitution “gives federal courts the power to adjudicate only genuine ‘Cases’ and ‘Controversies[,]’ … [and] includes the requirement that litigants have standing,” Breyer wrote.

Citing two precedents, he stated that a “plaintiff has standing only if he can ‘allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief.’”

“Neither the individual nor the state plaintiffs have shown that the injury they will suffer or have suffered is ‘fairly traceable’ to the ‘allegedly unlawful conduct’ of which they complain,” Breyer wrote.

“The state plaintiffs have failed to show that the challenged minimum essential coverage provision, without any prospect of penalty, will harm them by leading more individuals to enroll in” programs such as Medicaid, the Children’s Health Insurance Program (CHIP), and health insurance programs for state employees.

Justice Thomas wrote a concurring opinion, but he faulted the court for deciding NFIB v. Sebelius and King v. Burwell wrongly in his view.

“But, whatever the Act’s dubious history in this Court, we must assess the current suit on its own terms. And, here, there is a fundamental problem with the arguments advanced by the plaintiffs in attacking the Act—they have not identified any unlawful action that has injured them,” he wrote.

In his dissenting opinion, Justice Alito quipped: “Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two. In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue.

“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. A penalty is a tax. The United States is a State. And 18 States who bear costly burdens under the ACA cannot even get a foot in the door to raise a constitutional challenge. So a tax that does not tax is allowed to stand and support one of the biggest Government programs in our Nation’s history. Fans of judicial inventiveness will applaud once again. But I must respectfully dissent.”

Matthew Vadum
Matthew Vadum
contributor
Matthew Vadum is an award-winning investigative journalist and a recognized expert in left-wing activism.