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Supreme Court Ruling on Affordable Care Act

Overview

Since its establishment, the Supreme Court of the United States of America has played significant roles in the arbitration of justice and offering an opinion on contentious matters affecting the country. In 2012, for example, the Supreme Court of the United States made a decision in the National Federation of Independent Business vs. Sebelius case. Over twenty-five, states filed an injunction at the Supreme Court seeking opinion on the constitutionality of the Affordable Care Act (ACA), which President Obama had signed into law. In what many analysts consider as a landmark ruling, the United States Supreme Court considered the two provisions that make up the ACA, that is, the Medicaid expansion and the individual mandate. Five out of the nine judges ruled by the majority that the individual mandate provision was constitutional. However, although the Court determined that the Medicaid expansion provision was unconstitutional, it upheld this provision due to lack of majority vote. This paper describes the majority opinion of the five judges and the dissent of the four judges. The paper also discusses personal views on the constitutionality of the ACA. Additionally, the paper highlights how the Supreme Court of 1925 and 1965 would have ruled based on past decisions.

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Background

President Obama came into office and promised Americans to reform the healthcare sector so that every person is able to afford healthcare services. The drafting and signing of the ACA became the foundation of healthcare reform in America. However, as expected, proponents and opponents of the ACA continued to debate its constitutionality. Immediately after signing the ACA, twenty-six states led by Florida filed a lawsuit challenging the act in the federal district court. Other groups such as health insurance firms and the National Federation of Independent Businesses (NFIB) also filed lawsuits in the federal district courts challenging the constitutionality of the ACA. Due to the magnanimity of the matter and the number of the filed lawsuits, the Supreme Court took over. In the Supreme Court, thirteen states led by California filed amicus and supported the two provisions of the ACA (Kliff 1).

The individual mandate

Primarily, the individual mandate of the ACA is the basis of the Act, and requires every person to uphold a minimum level of health coverage insurance first for themselves, and secondly, for their tax dependents. All Americans with healthcare insurance coverage from employers, individual plans, government-sponsored coverage, and any other coverage acceptable by the state satisfy the individual mandate. The role of this provision is to increase access to healthcare coverage by allowing the exchange of health insurance plans among the people. Additionally, the individual mandate allows the purchase of tax premium credits in advance for families whose net annual income is between $23,050 and $92,200. Thus, depending on one’s income, premium tax credits fluctuate, giving people an opportunity to enjoy free coverage for a particular period. Premium tax credits are also available for immigrants and religious objectors who do not qualify for any health insurance plan. The individual mandate also allows a family of four people whose yearly income is between $23,050 and $57,625 to share premium tax credits. Every person must satisfy this provision; otherwise, they will have to pay a financial penalty, which is a fraction of the household income, and will increase from 1% in 2014 to 2.5% in 2016 (Congressional Budget Office 1).

The Medicaid Expansion

The second provision of the ACA is the Medicaid expansion, which aims to enhance access to affordable healthcare insurance so that all Americans access affordable health care. Notably, the Medicaid program allows people from poor backgrounds to access affordable health insurance. Both the federal and state governments fund this program, although individual states have the right to implement or leave it. The ACA extends the Medicaid program by allowing states to cover all people aged below 65 years, and whose household yearly income is between $14,856 and $30,657. Although many states have gone past the ACA, they do not offer a health care package for children. Nonetheless, the ACA proposed 100% funding of this provision in all states between 2014 and 2016, but gradually reduce this funding by 10% in 2020 and beyond.

The Supreme Court’s Decision

Before delivering its decision, the Court considered the two provisions separately. By 5-4 majority, the Court ruled that the individual mandate was constitutional. On the Medicaid expansion, the four dissenting Justices maintained that the ACA was unconstitutional; two Justices supported its constitutionality, while three ruled that it was unconstitutional.

The individual mandate

Chief Justice Roberts and Justices Ginsburg, Sotomayor, Breyer, and Kagan ruled that the individual mandate was constitutional. Using article l, Section 8 of the United States Constitution, the five Justices ruled that due to the Congress’s taxing power, the individual mandate provision was within the law, to which the plaintiffs did not object. According to the Justices, the taxing power allows the federal states to implement the individual mandate, failure to which they will pay additional money equivalent of a tax, and enter a shared responsibility payment scheme. The Court also noted that not only does the shared responsibility payment comply with the federal tax return laws, but it will also generate over $4 billion of revenue per year.

In their decision, the majority of Justices asserted that the individual mandate was similar to tax, and therefore, it is constitutional. To start with, Justice Roberts read that the taxes people pay for the individual mandate does not exceed earlier health insurance prices, thus they are admissible. Secondly, the mandate does not imply that some Americans will deliberately fail to purchase health insurance to pay the penalty. Lastly, the Court found out that the ACA disallows IRS from instituting criminal proceedings, as a way of amassing the shared responsibility payment. Justice Roberts observed that the shared responsibility payment does not compel people to purchase insurance, but it is a taxation measure, which is willing to comply. Additionally, he noted that taxes function as inducements, which influence individual behavior, but the nature of taxation remains unchanged. On the other hand, the four dissenting Justices Kennedy, Scalia, Alito, and Tomas observed that the shared responsibility payment forces Americans to purchase insurance, thus violating the law (Kliff 1).

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The Medicaid expansion

This was the complex provision for the Court in arriving at a decision. To make a decision, the Court relied on the Congress’ Spending Clause to determine the constitutionality of this provision. The Court recognized the federal fund receipts that Congress uses in exercising its spending power, noting that this has enabled it to achieve its policy objectives without applying enumerated powers. Considering similar cases of 1937 and 1987, the Court noted that in the future, financial incentives from Congress might exceed permissible limits leading to unconstitutional coercion. This was the first time the Court had considered coercion in determining the constitutionality of the law on federal funding. Although for varied reasons, the nine Justices upheld that this provision was in the minimum unconstitutionally coercive of states. Firstly, the three Justices observed the lack of adequate notice to willingly consent is unconstitutional. Secondly, Justice Roberts observed that the Secretary would use the case of non-compliance to punish states by not remitting Medicaid funds. On the other hand, the four dissenting Justices also ruled that the Medicaid expansion was unconstitutional; noting that the Medicaid expansion is inseparable from other provisions, and therefore, the entire ACA is unconstitutional. Two Justices noted that the Medicaid expansion was constitutional. However, since there was no majority opinion on this provision, it remained in the act.

Looking ahead

Most Americans agree that the country requires health care reform to ensure every American citizen, immigrant, and religious objector is under health insurance coverage. The public continues to debate the decision as read by Justice Roberts and the dissenting view even today. Many Americans believe that by upholding the ACA, the nation made tremendous strides towards reform of the health care systems. Moreover, by upholding the ACA, the Court ensured that millions of Americans could access affordable and quality health care services irrespective of their income. The individual mandate allows people to purchase insurance through taxes. This provision also ensures children and low-income earners access affordable health care. The Medicaid expansion has seen the opening of state-owned health insurance, thus opening up the healthcare market.

The Obama administration remains committed to health care reform by ensuring that every American is able to access affordable and quality health care. Thus, the ACA not only offers cheap health care plans but also patient-centered services that all people irrespective of their levels of income enjoy. Additionally, the ACA aims to improve the quality of health care by allowing the federal and state governments to invest more money, and ensuring the continuity of payment for services. As opposed to the sustainable growth rate (SGR) formula, which many people believe is unaffordable; the ACA offers exciting options. For instance, through collaborations, the three parties may create policies that will improve access to health care, enhance quality, and make health care affordable by reducing the cost of premiums (Barrett 1).

The potential decision of the Supreme Court of 1925

In the case of Linder vs. the US, the Supreme Court of the United States ruled that any health care reform is a prerogative of the state. The case involved the legitimacy of medical practitioners prescribing drugs to addicts. However, the Supreme Court decided that federal governments have no role in regulating healthcare. On this basis, the Supreme Court of 1925 would have voted to repeal the individual mandate as it emanates from the federal governments, and uphold the Medicaid expansion. Nonetheless, state governments are instrumental in implementing the objectives of Congress and by extension, the federal government policies.

The potential decision of the Supreme Court of 1965

Since 1963, Medicaid and Medicare social programs have done much to provide health coverage for children, underserved persons, low-income earners, and those who cannot afford health care completely. Both the federal government and state governments jointly run some of these social programs. The Court of 1965 could have ruled the constitutionality of the individual mandate, but found the Medicaid expansion unconstitutionally coercive of states. By giving the secretary powers to uphold the funds for non-compliant states, it means that states have limited options. Thus, the Medicaid expansion largely violates the constitution. Today, the ACA exists just as President Obama signed it; however, it does not compel the withdrawal of funds for non-compliant states.

Works Cited

Barrett, Paul. Supreme Court Supports Obamacare, Bolsters Obama. Bloomberg Business week, 2012. Web.

Congressional Budget Office. Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act. Congressional Budget Office, 2012. Web.

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Kliff, Sarah. What happens if a State opts out of Medicaid, in one chart? The Washington Post, 2012. Web.

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