Obamacare Challenges: Where the Conventional Wisdom Falls Short
Since the U.S. Court of Appeals for the D.C. Circuit struck down an Internal Revenue Service regulation implementing Obamacare, some observers have predicted that the IRS rule would ultimately be upheld. The regulation extends federal subsidies to individuals purchasing insurance from federal exchanges and not just state-run exchanges, as the Affordable Care Act specifies. But when it comes to legal challenges regarding the health-care law, the conventional wisdom has sometimes been wrong.
Consider, for instance, the Supreme Court’s decision upholding Obamacare two years ago. The day that the court ruled in June 2012, President Barack Obama said: “Earlier today, the Supreme Court upheld the constitutionality of the Affordable Care Act.”
Actually, the court was more nuanced. On Page 58 of the ruling in National Federation of Independent Business v. Sebelius, the justices wrote: “The Affordable Care Act is constitutional in part and unconstitutional in part.” While the court upheld the individual mandate as a permissible exercise of the taxation power, it struck down provisions of the ACA’s expansion of Medicaid as unconstitutional “economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.”
Two years later, a digital campaign on the White House Web site argues for states to expand Medicaid under the ACA–and warns of dire consequences for those that do not. But the administration embarked on the campaign because the Supreme Court made Medicaid expansion optional for states.
It’s also worth noting that seven of the nine Supreme Court justices agreed that it was unconstitutional to mandate Medicaid’s expansion. Those seven justices included Stephen Breyer, previously a staffer for Sen. Edward Kennedy, and Elena Kagan, a former solicitor general in the Obama administration. So those predicting that some judges and justices would preserve the IRS rule based solely on which president appointed them to the bench may yet be disappointed.
Legal decisions don’t always break down along party lines or meet political talking points. That’s something to bear in mind as the cases wind through the courts.
This post was originally published at the Wall Street Journal Think Tank blog.