Oxford University Press's
Academic Insights for the Thinking World

Legal hurdles to the Affordable Care Act

Since the Affordable Care Act was signed into law in 2010, it has withstood—and overcome—a storm of legal hurdles in the past five and a half years. Lawrence Jacobs and Theda Skocpol, authors of the newly-published third edition of Health Care Reform and American Politics: What Everyone Needs to Know, provide insight into the legal challenges it faced, including the Supreme Court ruling in 2015.

Big legal challenges to Affordable Care made for riveting political drama from March 2010 to June 2012, snaking their way through the federal courts to a knife-edge five to four Supreme Court decision upholding the landmark law. In a decision that surprised many politicians and pundits who expected a straight partisan outcome, conservative Chief Justice John Roberts joined four moderate to liberal justices in upholding the core parts of health reform. As Roberts explained, “We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions.”

What the Court did, in essence, was toss the struggle over Affordable Care right back into the political and electoral arenas, where even the legal fights had been anchored all along. But the 2012 Supreme Court ruling did not eliminate attempts to get the courts to do what elected politicians could not—eviscerate the Affordable Care Act.

Although the political fight over health reform remains front and center, reform opponents also renewed legal challenges and, surprisingly, made it back to the Supreme Court in the 2015 case King v Burwell. With the law’s constitutionality settled in June 2012, opponents took aim at its funding by challenging the distribution of tax subsidies to the millions of Americans who used state exchanges set up by the federal government. Their legal toe-hold lay in one sub-section in a 906 page statute, which said that subsidies would be for purchase on exchanges “established by the state.” Challengers argued that those words meant that federal subsidies could not go to customers in dozens of states where exchanges had been set up by federal authorities after state officials proved unwilling or unable to set up exchanges themselves.

But what might seem like a literal and obvious reading crumbled under the weight of well-established legal rules and precedents. Courts have said in the past that laws are to be interpreted in accordance with their overall aims, not just by focusing on a few words taken out of context. In an unusually strong June 2015 decision, six Supreme Court Justices affirmed that the Affordable Care Act always meant for subsidies to be available in all 50 states, and in doing so, raised the bar for future conservative challenges. The Court declined to say that the executive branch has made universal subsidies available simply by offering its own interpretation of an ambiguous provision; instead the Court majority ruled that Congress always intended the subsidies to go to states relying on federal exchanges, as well as to states that built their own exchanges. This means the issue is settled: even if a Republican President takes office in the future, he or she will not be able to deny subsidies merely by issuing a new administrative ruling. Congress would have to vote to overturn the subsidies—and take responsibility before the American people.

“Tea Party rally to stop the 2010 health care reform bill” by Fibonacci Blue. CC BY 2.0 via Flickr.

In short, despite some huffing and puffing about the sloppiness of Congress in writing and proofreading the text of the Affordable Care Act, the Supreme Court’s 2015 ruling dismissed the challengers’ focus on just four words. Following long precedents, the Court majority looked at the law as a whole and noted that universally available subsidies were necessary to make health insurance affordable in working insurance markets. Without subsidies, the Court noted, insurance markets in many states would go into a “death spiral,” and that cannot be what Congress intended.

Of course, legal challenges to the Affordable Care Act have an effect even when they ultimately lose in court. Legal challenges by right-wing opponents of health reform have been part of an overall political strategy to mobilize partisans and convince worried voters that health reform is uncertain or dangerous. They have attracted media coverage and may have spread false public beliefs and stoked continuing grassroots resistance.

In the lead-in to the 2012 Supreme Court case, for instance, shrill warnings about a “massive new middle-class tax” supposedly imposed by the individual mandate amounted to fabrications not unlike the false scary claims about “death panels” deployed in the 2010 elections. In truth, the mandate applies only to a small number of Americans out of each 100—only to people who do not have health insurance through work or a government program, or who cannot afford to purchase coverage with help from generous tax credits. There are exemptions from the mandate for people who have religious objections or who cannot afford a plan. And here’s the real kicker: the Affordable Care Act does not classify the failure to obtain insurance as a crime, and the Internal Revenue Service is not allowed to impose liens or levies on people who do not comply. The fine itself is small, and compliance is basically voluntary. This is the truth of the matter, but it did not prevent challenges to the individual mandate from shaping false media coverage over the course of several years, perhaps in ways advantageous to Republicans.

As for the most recent Supreme Court ruling, Republican leaders publicly bemoaned the 2015 decision, but the truth is that it saved the GOP from a no-win explosion its own extreme right-wingers tried to ignite by taking away benefits that millions of Americans (including rank and file Republicans) were already enjoying. Had the Court cut off many subsidies, millions of Americans who can now afford to buy private health plans in states ranging from Texas and Florida to Ohio and Wisconsin would have suddenly faced the loss of coverage—and losses of that sort make voters angry much more than potential gains make them happy. Non-Tea Party Republican officeholders and leaders in Chambers of Commerce in many states where subsidies were at issue were surely relieved when the Supreme Court left them in place. The ruling may have disappointed all critics of Obamacare by leaving the President’s main domestic policy achievement in place, unhappily for Republicans now and in the future. But it also signaled a setback for right-wing ideological bomb-throwers and gave a boost to Republicans who would like to get on with the business of winning government power to serve practical business interests.

Image Credit: “Northern Inter-counties athletics” by AdamKR. CC BY-SA 2.0 via Flickr.

Recent Comments

There are currently no comments.