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My Analysis of the Court's Decision

By Dr. David C. Pate, News and Community
June 28, 2012

On my blog in March, I explained the elements of the health care reform law challenge. 

There were basically four questions before the Supreme Court:

  • Is the “individual mandate," the minimum coverage provision, unconstitutional?
  • If the “individual mandate” is unconstitutional, can the other parts of the law be left in place, or must the entire law be overturned?
  • Is the law’s expansion of state Medicaid program eligibility unconstitutional?
  • Does the Anti-Injunction Act prevent the court from having jurisdiction before enforcement has occurred?
Let’s start with the last question first. In order for the Anti-Injunction Act to apply, the penalty applied for failing to have insurance under the individual mandate provision would have to be determined to be a tax. 

In March, I said that “If the Court determines the penalty is a tax and that Congress passed this law under its taxing powers, game over.  It is constitutional.”  In fact, the Supreme Court today did, in a split decision, determine that the penalty is a tax and therefore, the individual mandate is constitutional. 

That was a surprise to me.  I did not think they would hold the penalty to be a tax, and certainly did not think,  based on oral arguments, that even the left-leaning justices considered it a tax.  But as I warned in April, it is hazardous to try to gauge the justices’ opinions based upon their questions during oral arguments.

So the answer to the first question is that yes, the “individual mandate” is constitutional because it is a valid exercise of Congress’ taxing powers, which as I previously pointed out are broader powers than Congress has under the Commerce Clause. 

I had predicted that the Supreme Court would hold the individual mandate unconstitutional under the Commerce Clause. Interestingly, the justices indicated that had they analyzed the case under the Commerce Clause, the individual mandate would have been unconstitutional. 

Back to that fourth question. Now that the court has held the penalty to be a tax, the question is whether the Anti-Injuction Act prevents anyone from challenging the law’s validity until the time that the tax is actually paid, which would not be until 2015 for the tax year 2014. 

However, the court indicated that though the penalty is a tax, it is clear that the Congress did not intend the penalty to be a tax for purposes of the Anti-Injunction Act, therefore, it does not apply.  Had it applied, the court would not have reached a decision on this case for several years. 

And since the individual mandate is constitutional, the court did not need to answer that second question, regarding the entire law.

Finally, as predicted, the court upheld the state Medicaid program expansion as constitutional. Surprisingly, the justices imposed limits on the federal government’s ability to take away all state funding for Medicaid if a state does not comply with the terms of the Medicaid expansion.  Essentially, the federal government could only hold back those funds associated with the expansion.

The bottom line? The health care reform law, the Patient Protection and Affordable Care Act, has been upheld in its entirety and is constitutional.

About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.