Commentary: False Alarm, The Supreme Court and the Affordable Care Act

U.S Senate Democrats are claiming that a conservative Supreme Court will end Obamacare coverage for 20 million Americans. This is shameless fearmongering. The horrors they so stridently predict will simply not materialize.

Sen. Patrick Leahy and five of his Democratic colleagues on the Senate Judiciary Committee have repeatedly stoked fears that a conservative Supreme Court, including Justice-to-be Amy Coney Barrett, will destroy the Obama Affordable Care Act (ACA) of 2010. That, they say, would leave 20 million Americans without health care coverage, especially coverage for preexisting conditions.

This is rank partisan fearmongering, and anybody willing to bet that will happen should demand hundred to one odds. Let’s look at how things got to this point.

In 2009 President Obama proposed tax credits to help middle income families buy health insurance covering very generous “essential benefits.”  Early the following year the House Democrats passed a bill mandating that all individuals not covered by Medicare, Medicaid, Veterans, or Employer Sponsored Insurance pay a tax for not having government-approved coverage. (This is the mandate that candidate Obama emphatically opposed in a 2008 debate with Hillary Clinton.)

The House bill included Sec. 401, forthrightly titled “Tax on Individuals Without Acceptable Health Care”.  But Democratic Senators (including Sen. Leahy) balked at advancing a bill enforced by a politically dangerous new tax provision. They scrapped the House-passed bill and passed their own bill founded on the power to Congress to regulate interstate commerce. The Senate version was duly enacted in March 2010.

When the first test case reached the Supreme Court in 2012, five justices agreed that this startling extension of the Commerce Power, not to raise revenues, but to penalize persons who did not choose to participate in interstate commerce at all, was unconstitutional. But one of them, Chief Justice Roberts, joined the four liberal justices to hold – implausibly - that the penalty was in fact a tax, and thus within the constitutional power of Congress to levy. Obamacare was saved!

The ACA survived at least two more Supreme Court challenges. Meanwhile, in 2017, the Republican Congress eliminated the tax/penalty. In 2019 a district judge in Texas ruled that since according to Roberts’ decision and the insistence of the ACA’s backers that the penalty/tax was essential to make the ACA work, the elimination of an enforceable tax left the ACA with no constitutional support at all. The Judge also found that the insupportable individual mandate provision was not severable from the rest of the wide-ranging act; the whole thing was a constitutional failure.

On November 10 the Supreme Court will hear the appeal in that case (California v. Texas). Here’s my prediction:

The Court could, but won‘t, agree with the district court and toss the entire law out as unconstitutional.

The Court could, but won’t, overturn the five-justice majority of 2012 and sustain the individual mandate as an extension of the commerce power.

Most likely the Court will agree that the individual mandate to buy approved insurance is constitutionally insupportable without an enforceable tax. As one commentator put it, it has become “a unicorn with no horn”.  However the ACA’s subsidies for buying insurance would remain available for those qualified purchasers who want them, with no penalties for those that don’t.

Under this scenario, the Court would have to decide which provisions of this 600+ page act are so essentially interwoven with the individual mandate that they must fall with it. It’s  quite likely that the Court would remand the case with guidelines to a lower court to decide which provisions are severable, and consider the result when it’s appealed again in a year or two.

Meanwhile, the ACA will keep functioning, and no one will lose their coverage.

Here are some provisions that are (in my view) likely to be found severable and constitutionally supportable: expansion of Medicaid; mandated coverage for preexisting conditions and coverage of children to age 26; restrictions on insurance payout caps; community rating and guaranteed issue of policies; payments to health care providers; subsidizing medical education; and, crucially, provision of tax credits to purchase government-approved policies through the Federal and state insurance exchanges.

The horrors predicted by Democratic Senators in the Barrett hearing last week will not materialize.

Of course my prediction could turn out to be wrong; but more likely it will become apparent that Sen. Leahy and his Democratic colleagues who are so vocally bemoaning the conservative Court’s coming destruction of the ACA’s coverage were too partisan to restrain themselves from peddling any argument, however unlikely, that promised to terrify voters.

John McClaughry is vice president of the Ethan Allen Institute.


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Enter Comment Here:

  • James Hall                 (RET)
    commented 2020-11-02 10:01:38 -0500
    The biggest lies in the history of this country came from Obama: " If you like your Doctor and Insurance Company you can keep them". As a result of the progression of this “promise” 20 million working class mostly blue collar workers lost their insurance very abruptly, which they were very happy with. When the dust settled, there was no substitute that was affordable. So to talk about 20 million people being driven off of ACA ….. under Obama, that concept and action has already happened, just to people who were made a promise and then kicked in the butt. I agree with the article, Leahy and his like minded brethren in Congress are the worst fear mongers; where were they when the group mentioned above were shafted. I do not remember a single word from them. SHAME, SHAME!!!!!
  • Gordon & Jan Payne
    commented 2020-11-02 09:10:12 -0500
    President Obama gutted the ACA himself with his illegal XO to suspend the corporate mandate, which would have triggered mass opposition due to the fallout and unworkability. The ACA continues to linger, despite the surge to make Americans dependent on Medicare/Medicaid, the Great Society’s Fabian measure. Left out of the equation, as in the case of all climate control, is consideration of private and local alternatives. From self-help, through family, church, community fund and States, the last the Constitution’s delegated authority for policing healthcare, any and all of these employing measures from charity to investment to market, are arguably more than capable of furnishing our healthcare needs. Yet, not even an impartial study on the subject. Rather, after partisan hearings with favored testimony, the American public was informed by Speaker Pelosi, that we would know it when they passed it!? If SCOTUS were to scuttle what remains of the hulk, private healthcare, assisted by removing monopolist protections, would improve beyond the 82% coverage BEFORE ACA, which, under it, has not changed, now the uninsured, those in the heretofore (but for Wuhan!) productive private sector the victims!