The Last Ditch Obamacare Challenge

The Supreme Court decided yesterday to announce opinions today in addition to its June Monday-Thursday arrangement as to not go beyond the month of June.  Arguably the most anticipated ruling(s) from the October 2013 term is the Sebelius v. Hobby Lobby and Conestoga Wood v. Sebelius cases, both heard together during oral argument despite the aggressive media attention Hobby Lobby has received over Conestoga Wood.  Both are challenging the contraception mandate in the Affordable Care Act, which requires employers to provide FDA approved birth control to their employees.  Both companies oppose on religious objections and are challenging under a statute passed in the early 1990s – not the First Amendment’s freedom of religion – called the Religious Freedom Restoration Act or RFRA.  It is important to note the structure of the ACA is not in danger but the outcome of the case will merely determine what companies/corporations will be forced to provide this coverage.

Opponents of the Affordable Care Act have, however, put forth what many are calling the last effort to challenge the legitimacy and constitutionality of the ACA.  In a case, in which the DC Circuit Court recently heard oral arguments in May, called Sissel v. Health and Human Services,  petitioners are asserting that the ACA’s individual mandate, or the requirement that every American have health insurance, is unconstitutional as it violates Article I Section 7, which is referred to as the Origination Clause.  The Origination Clause states, “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.”  Since Chief Justice John Roberts famously ruled in the landmark 2010 NFIB v. Sebelius that the individual mandate was a “tax,” the Origination Clause argument was born.

The petitioners assert in their briefs that since the ACA originated in the Senate, it is therefore unconstitutional.  Opponents of the suit claim that the Senate took a bill from the House as the model for the ACA, which under the Constitution is permitted, though petitioners and sympathizers for the Sissel case state that the House bill used by the Senate was not germane and the Senate gutted it to create the ACA.

This case has now opened a debate over what constitutes a tax or revenue for the purposes of satisfying the Origination Clause.  Many on the side of Sissel, question what type of tax the individual mandate is.  At an event hosted by the Cato Institute in Washington in May, days after the oral arguments in Sissel at the circuit, Timothy Sandefur, who argued the case, stated the individual mandate is not an income tax, so what type of tax is it?.  Cato adjunct scholar and ACA opponent Ilya Somin also stated at the policy roundtable, that the lower courts ruled the ACA was not a bill for raising revenue or a tax, though Chief Justice John Roberts disagreed as he eventually called it a “tax.”*  According to Somin, the individual mandate is a penalty, not a tax.  Somin also bursts Roberts’ argument by saying that under Roberts’ logic, if the ACA worked the way it is supposed to, meaning everyone bought health insurance, there would be no revenue derived from it.  Roberts then believes that the individual mandate is a “voluntary tax,” which Somin believes serves the purpose of revenue in the context of this argument.

This case has not received much media attention, especially from liberal groups.  Even opponents of the ACA such as Somin and Sandefur* believe this case is a longshot, though they went forward with it on constitutional principles.  Liberals such as Simon Lazarus of the Constitutional Accountability Center and one of the ACA’s staunchest defenders especially in the context of the various delays associated with it, believes the individual mandate serves another purpose separate from the Origination Clause.  The penalty or “tax” is an incentive to force people to buy health insurance, not a designed system for raising government revenue, according to Lazarus.

The Supreme Court only has three more days (counting today) to deliver decisions from the October 2013 term without going over their typical June calendar.  It is impossible to tell if they will release the Hobby Lobby decision today, but regardless of the outcome, there is still one more last ditch effort to derail Obamacare in the judicial system.  We will have to wait for the circuit opinion to come down in Sissel.

* Correction: An earlier version said that Somin stated the lower courts ruled the ACA was a bill for raising revenue.  The lower courts ruled the individual mandate was in fact a penalty and not a bill for raising revenue or a tax. 

*Correction: An earlier version misrepresented Mr. Somin and Mr. Sandefur as conservatives, which they are not.