Three things are certain:
- You’re going to have to interact with other human beings sometime later today;
- Those jerks are going to want to talk about today’s Supreme Court ruling; and
- You have no idea what’s going on.
In an attempt to help you sound half-way informed during this inevitable conversation, the following is a plain-language brief on the major points of the Court’s ruling on Patient Protection and Affordable Care Act (PPACA) as well as some of the basic Constitutional ideas behind it.
PLEASE NOTE: I am simply a law student with an ambition to clarify a complex topic for my friends. I make analogies to Goldilocks several times in this post… If you think I’m taking this seriously you are sadly mistaken. I am not a partisan and I am not an expert. I fully admit my meager knowledge on the topic of Constitutional Law. If you want to talk to an expert, go on your facebook feed right now and find someone typing in all caps.
The PPACA is an enormous piece of federal legislation that makes sweeping changes to existing federal programs, most pertinently Medicaid.
The first big idea here is the PPACA’s “Individual Mandate” (IM) which requires Americans to maintain a minimum level of health insurance coverage either through an employer, independent private provider, or public (government) provider. Compliance with this federally compelled act of commerce is secured through the “Shared Responsibility Payment” (SRP); a “penalty … assessed and collected [by the IRS] in the same manner” as a tax.
The second big idea here is Federal Funding for Compliance in Medicaid Expansion (FFCME). Medicaid programs are generally administered on the state level and funded jointly with both state and federal monies. Medicaid is a no / low cost program that currently serves over 46 million children, disabled adult, elderly, and extremely poor Americans. Under the PPACA, eligibility for Medicaid was dramatically expanded to include all persons with income levels at or below 133 percent of the federal poverty level. Note: this expansion is purposely and intimately connected to the IM described above as a low / no cost method for poor Americans to avoid the SRP penalty. Also under the PPACA, ALL FEDERAL MEDICAID MONIES (including pre-PPACA funding) were made contingent on the state’s compliance with the above mentioned expansion of Medicaid.
Ahem. So. In summation (Please pardon my acronyms)
- The IM compels individuals to procure a minimal level of health insurance or pay a SRP penalty to the IRS.
- The FFCME revokes ALL federal Medicaid funding from states who refuses to comply with Medicaid expansion.
The Court’s Rulings
I. The Individual Mandate (IM)
The IM is fairly unique as a Constitutional concept. I will not go into the action / inaction distinction at length but please note that Justice Roberts fundamentally understands the IM as compelling individuals to actively create commerce under threat of a penalty.
The Roberts opinion is rooted in an interpretation of the Constitution (specifically Art. 1 [s] 8 and the 10th amendment) that grants the Congress only the “limited and enumerated powers” constitutionally delegated to it. This means that Congress, for all its bravado, may only pass laws in the pursuit of around 18+ constitutionally described powers. Anything else is simply unconstitutional. So now, indifferent to the wisdom of the PPACA, Chief Justice Roberts must look for an enumerated power under which the Individual Mandate may be justified. Let us join him in his “Goldilocks” journey.
Commerce Clause –
The Commerce Clause grants the federal government the power to “regulate Commerce … among the several states”. The Health Insurance industry is approximately 15% of our national GDP and decidedly an interstate affair. However, decidedly Justice Roberts makes the distinction between regulating existing commercial activity and compelling individuals to actively create new commercial activity. Justice Roberts is concerned about what wouldn’t fall under the Commerce Clause if Congress were allowed to compel people to create new “commerce”.
So, Justice Roberts dips his spoon into the Commerce Clause porridge and frowns. “Too capacious” says Justice Roberts and he moves on.
Necessary and Proper Clause –
The Necessary and Proper Clause grants the Congress the authority to make all laws “necessary and proper” to execute its other enumerated powers. It’s a very complex idea but a famous and insightful example is found in the first National Bank. The Constitution did not grant Congress the power to create a bank but Justice Marshall ruled that creating a national bank was “necessary and proper” to the execution of Congress’ existing powers to coin money and regulate interstate commerce.
Justice Roberts is unimpressed with the idea of finding the IM in the Necessary and Proper clause. Which of the 18+ enumerated powers makes the IM “necessary and proper” he asks? The maintenance of a Navy? Coining money? No. To say the IM is necessary and proper to the Commerce Clause is insufficient because, again, one cannot create commerce to regulate it. To say that it is necessary and proper for internal cohesion and execution of the PPACA is tautological as misses the point. Justice Roberts does not think that there is a sufficient foundation within Congress’ the existing enumerated powers and obligations to consider the IM as being “necessary and proper” to their fulfillment.
Again, Justice Roberts dips his spoon and spits out his supper. “Too attenuated” says Justice Roberts and he moves on.
Taxing Clause -
The Taxing Clause gives Congress the power to “lay and collect taxes”. It’s unfortunate but it’s true. So, next time you look at all those subtraction marks on your paycheck… that’s the Constitution taking all your money. As we’re all aware, it’s a fairly broad and versatile power. Presumably for political reasons, supporters of the PPACA tried very hard to make the point that the SRP was a “penalty” and NOT a “tax”. But that was politics son! This is the Supreme Court! Here the so long as it is “fairly possible” to interpret the mandate as imposing a tax, it may be considered as such. Boom! Lawyered!
So Justice Roberts take a look at the SRP penalty, “disregard[s] the designation of the exaction”, and considers what the SRP functionally does. He observes that the SRP takes money from people for not doing what the government says. Further, the SRP isn’t limited to willful violators, it is a strict liability offense; just like taxes! Further still, the SRP isn’t so harsh that the penalty would be considered equivalent to a criminal punishment or equitable injunction. Plus, c’mon! The SRP is administered completely through the IRS and tax procedure. Looks, acts, smells like a duck etc. etc. etc.
One last time, Justice Roberts dips his spoon. Hey! This porridge isn’t really porridge at all! It’s Kheer, a delicious Indian dish of rice, milk, and nuts. Well… the porridge I’m used to is traditionally is made of oats… but this is functionally pretty darn similar. “… Just right!” exclaims Justice Roberts and the IM has now found a home.
IM = CONSTITUTIONAL ‘cuz IT’S A TAX
II. Federal Funding for Compliance in Medicaid Expansion (FFCME)
You know how some people view the crucial Constitutional issue of the PPACA as being whether or not the federal government can provide health insurance to poor people? Those people are wrong. Wrong and confusing their opinions about policy for Constitutional jurisprudence.
The second crucial issue decided today wasn’t whether we as a nation should exercise charity toward the less fortunate, but rather intricacies of state-federal funding relationships. Specifically whether making federal Medicaid funding contingent on state compliance in expanding Medicare in accordance with the PPACA is sufficiently deferential to the states.
According to Justice Roberts, the big ideas here are Federalism, “conditional spending” under the Spending Clause, and (UGH! AGAIN!) the Commerce Clause. Justice Roberts, like many others, is a dual-federalist who views the federal and state governments as being coequal sovereigns. This is important because negotiation between equals should, ideally, be fair and evenhanded. Please note: Justice Roberts, to my knowledge, is not insane. His respect for dual-federalism does NOT invalidate the basic principles of Constitutional system; namely preemption.
The Supreme Court (and especially Justice Roberts) has traditionally frowned upon the federal government “commandeering” state governments and forcing them to comply with a federal regulatory program. The federal government MAY “encourage” compliance with federal regulations by granting monies but may NOT coerce or punish states by rescinding federal funds unrelated to the program at hand. The crucial idea here is that the state has a “genuine choice” to participate in the federal regulation.
So, the PPACA prudently gives the states the option to revolutionize American healthcare by expanding Medicare coverage to a whole hell of a lot of poor people. If the state agrees to expand Medicare for its citizens, then the state will receive a huge pile of federal monies to do as much. Justice Roberts is totally fine with this. Justice Roberts thinks this is great. You go states. You help those poor people.
However, the PPACA also grants the Secretary of Health and Human Services the right to COMPLETELY RESCIND ALL FEDERAL MEDICARE FUNDING if the states don’t choose to expand their Medicare. Read that sentence again and think of the 46 million children, disabled, elderly, and poor Americans already on Medicaid. Medicaid is a huge program and its funding is often 10% of a state’s entire budget. Is this much of a choice at all?
That doesn’t sound like much of a choice to Justice Roberts and he is peeved. Sure the states initially agreed to Medicaid but the PPACA Medicaid expansion is a “shift in kind, not merely degree”. A state could NOT have anticipated this change when they chose to comply with existing Medicare regulations and accordingly the Secretary’s authority to blatantly penalize non-compliance isn’t a proper “conditional spending” relationship but just the federal government blackmailing the states. Justice Roberts finds the single section of the PPACA that give the Secretary the authority to punish non-compliance offensive to the American system of dual-sovereignty and patently unconstitutional.
FFCME = UNCONSTITUTIONAL ‘cuz FEDERALISM
So yeah. That’s that. Back to work for me. Thanks for your time everyone! Questions may be sent here!
P.S. I have only read the syllabus and parts of the majority opinion. I have not read the multitude of concurrences or dissents. Sorry y’all. I have a job.
P.P.S. If anyone who is NOT a lawyer attempts to engage you in a conversation about the Anti-Injunction Act, you have my permission to punch them. If they ARE a lawyer, it’s probably still a good idea to punch them.