There is a good likelihood that the Affordable Care Act, otherwise known as the “ACA” or “ObamaCare”, will be repealed either in whole or in part very soon. Regardless of what you think of the law, the legal arguments both for and against it created a superb classroom for understanding three fundamental precepts of the Constitution. In this article, I want to put aside for a moment the social and health aspects of the ACA, each of which has noble intent, and focus on the legal framework of the law and why it should be repealed. I have always believed this law to be the most egregious overreach of federal power in our history, completely ignoring two key provisions of the Constitution both out of arrogance and a rush to implement.
The ACA is a gigantic law, consuming more than 900 pages in its original form. When it was passed by Congress and signed by the President, it contained two critical elements to its success that were quickly challenged in court. They were the individual mandate and the method for expanding Medicaid. In their original forms, both these elements of the ACA were found to be unconstitutional by the US Supreme Court. The reasons why the Court deemed these two elements unconstitutional are blatantly obvious, and speak to the extreme overreach the President sought to gain.
Individual Mandate – The language of the ACA specifically states that individuals “shall” be required to purchase health insurance else be subject to a “penalty”. The government claimed the source of authority for compelling this requirement/penalty was the Commerce Clause(1) in the Constitution. The Supreme Court disagreed. The Court’s simple explanation was that the federal power to regulate commerce pre-supposes that the commerce to be regulated exists in the first place. In the case of the ACA, an individual that does not have health insurance is not yet participating in a health insurance commerce activity and therefore cannot be subject to any regulations assigned to that commerce activity, including penalties. Additionally, the Commerce Clause does not permit the government to “force” an individual into a commerce activity against their will. Thus, the Court held it to be unconstitutional for the individual mandate to be enforced under the Commerce Clause.
Medicaid Expansion – The ACA specified a large expansion of the Medicaid program, implemented by each state, that would be paid for by the federal government. To ensure each state complied with the expansion, the ACA stated that if a state chose not to expand their Medicaid program, then all federal Medicaid money given to that state, including that state’s pre-existing Medicaid allotment, would be withdrawn. The Court also struck this enforcement mechanism down, declaring that the penalty attached to the Medicaid expansion requirement went so far beyond the bounds of “common practice” as to become coercion. The Constitution prohibits the federal government from coercing the states, and thus the penalty for states refusing to expand Medicaid was declared unconstitutional.
Despite the above two portions of the law being declared invalid, the Court did not invalidate the law in its entirety. The Court, quite generously, re-defined the individual mandate to be a tax on a new class of citizens (those without health insurance). This allowed the mandate to stand by way of Congress’s power to tax, as opposed to an authority derived from the Commerce Clause. This set a new (and terrible) precedent however, since it is a tax specifically targeting a person’s inactivity (not buying health insurance). The Medicaid expansion part of the law was left to stand, but without the penalty of all federal Medicaid funds being withdrawn from any state not choosing to participate in the expansion. The law thus emerged from the court in a much different form from how it was passed, giving rise to a third constitutional controversy of the Judiciary modifying as opposed to interpreting the law to keep it viable. A deeply divided Court voted to allow the law as changed by the Judiciary (not by Congress) to stand. In the time since the law has been in force in its Court-modified form, nearly every one of the predicted negative consequences outlined in the dissenting opinion of the Court have come to pass.
The ACA stands as possibly the finest example of how not to create lasting legislation. It violated the Constitution. It assumed a large business management capability within the federal government that did not exist. It suppressed rather than encouraged private competition. It offered no positive incentive for an individual to participate, only a penalty if you didn’t. Repealing this law will be akin to putting a mortally-wounded animal out of its misery.
If there is one positive aspect that can be derived from the experience of the ACA, it would be how to more appropriately structure a survivable replacement. First and foremost, a new law must dispense with any notion of an arrogant federal government “forcing” people to purchase a product, or forcing states to expand a federal program, else they be punished. This lays the law bare to basic constitutional challenges on individual freedom and state sovereignty. An opposite approach, including positive incentives to encourage participation (as opposed to penalties), and rules that allow maximum private business participation and competition, without the federal government as one of the competitors, would be far better. It may take longer to reach the goal of insuring the entire population, but the legislation will be enduring because it plays to the strengths of our federalist republic system of government rather than attempting to dictate an outcome and “swim upstream” like the ACA did. The new debate will surely be interesting in the coming weeks – let’s see if we’ve learned a lesson.
Note – In researching information for this post, I read the Supreme Court opinions of both Chief Justice Roberts (prevailing) and Justice Scalia (dissenting) in the definitive 2012 ACA case “National Federation of Independent Business vs. Sebelius”. Both these opinions are superb examples of the written word – convincing and engaging, with brilliant clarity for such a weighty and complex topic. It was a truly refreshing reminder of the high writing standards that are possible with a thoughtful objective mind and logical reasoning put to the task.
(1) Commerce Clause – (Article 1, Section 8, Clause 3 of the Constitution) …Congress shall have the power “To regulate Commerce with foreign Nations, and among the several states, and with Indian Tribes”.