Obamacare Apocalypse Now? Exploring the question of the Affordable Care Act’s Constitutionality

by Wyoming Liberty Group Staff

Why should you care about Obamacare's constitutionality?

Simply put, if the Patient Protection and Affordable Care Act (Obamacare) were to be ruled unconstitutional, then Medicaid expansion would not be an option for the State of Wyoming, and our healthcare market could open up to more than one insurance provider for the state.

What happened last year?

At the end of last year, Obamacare's open enrollment period for 2019 ended. The same weekend, a decision came down from U.S. District Court Judge Reed C. O'Connor that the Patient Protection and Affordable Care Act is unconstitutional. Unsurprisingly, this made national headlines. Defenders of Obamacare were quick to point out on Healthcare.gov that the decision by Judge O'Connor will not affect individuals already enrolled in healthcare through the Obamacare exchanges during 2019.

While this is true, the future of Obamacare's legality remains to be seen. Because Judge O'Connor gave what is known as a "declaratory judgement," he was only advising on the particular case put before him, and he was not deciding whether or not Obamacare is constitutional at the federal or state level.

What happens next?

Judge O'Connor gave both sides of the debate a chance to create a joint report that would dictate what happens to the case now. That brief is due on January 4, 2019. One of the principle issues with the case is whether or not Judge O'Connor will agree to delay the ruling until it has been appealed. This is the goal of Washington, D.C. and the 16 additional states that want to protect Obamacare from legal repeal.

If Judge O'Connor refuses to postpone his decision from being carried out, then the case will likely be heard in the 5^th Circuit Court of Appeals. If Judge O'Connor's ruling is overturned, the case could be considered as early as Summer 2019 in the Supreme Court. A decision about Obamacare's constitutionality has already been made at the Supreme Court, in the case of NFIB vs. Sebelius. The result of the case was a 5-4 ruling, and Chief Justice John Roberts was the swing vote that allowed Obamacare to survive. That brings us to the principle issue at hand.

What is the fight about?

In the 2012 decision of NFIB vs. Sebelius, Chief Justice John Roberts upheld Obamacare's constitutionality by citing the taxing power of Congress in Article 1, Section 8 of the U.S. Constitution. It should be noted that Justice Roberts did not justify the individual mandate through the Commerce Clause of the constitution, but he upheld the law through "Congress's power to 'lay and collect taxes.'" He was able to justify the law further by saying, "neither the Affordable Care Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS."

Before we get into the decision and how it can be re-examined soon, it is necessary to lay out exactly what the Obamacare individual mandate is, and how it relates to the case. In the most basic terms, the individual mandate stipulated that every healthy American had to buy health insurance or pay a penalty to the Internal Revenue Service (IRS).

One of the key issues at hand was whether or not this understanding violated the Commerce Clause of the constitution, which dictates that Congress may regulate interstate commerce. While Justice Roberts said that the mandate could not be justified using the Commerce Clause because Congress cannot compel commerce, he did say that the law was upheld through Congress' ability to collect taxes.

Justice Roberts redefined the legal understanding to say that the penalty can be considered a tax. This is what allowed the law to remain constitutional in 2012. Justice Roberts clearly said in his opinion, "the individual mandate must be construed as imposing a tax on those who do not have health insurance, if such a construction is reasonable."

Got it? Great, now throw all of that out the window once last year's Tax Cuts and Jobs Act was passed. Somewhere in the 1,097 of pages of the law, there is a clause that stipulates the individual mandate will now provide $0.00 in funding to the IRS. Opponents now argue that because the individual mandate will no longer be considered a tax (after all, what tax generates a total of $0.00 for the government), Justice Robert's decision will no longer hold clout in the courts.

While it remains to be seen in the coming months or years, one thing is for certain: if the mandate is no longer a tax, then the taxing powers of Congress cannot be used to justify the Affordable Care Act's constitutionality.

Conclusion

At the end of the day, if the Patient Protection and Affordable Care Act is ruled unconstitutional, we can avoid the financial disaster that would come with expanding Medicaid in Wyoming. Even if the government promises to pay for most of Medicaid expansion, they continue to only cover about half of total Medicaid costs. If we want to achieve greater access to healthcare, provide better quality care, and give smaller insurers a chance to thrive, then the only option at our disposal is a free market, private insurance solution.