Supreme Court Upholds Obamacare, Narrows Medicaid Provision, and Begins the Dismantling of the New Deal State

The Supreme Court issued its long-awaited decision on the Affordable Care Act this morning, upholding the individual mandate and the remainder of the Act by a slim 5-4 majority, comprised of Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagan.

The only partial defeat for the government was the Court’s holding that the Medicaid provision – which conditioned federal funds on states’ acceptance of expanded Medicaid coverage – must be interpreted narrowly such that states that refuse to expand their Medicaid programs lose federal funding only for the expansion, but not for the current, unexpanded versions of their programs. In the context of the health care law itself, this was unquestionably a positive ruling. Yet, in its reasoning, the decision must be understood as laying the groundwork for dismantling the New Deal state.

Supporters and opponents of the law waited
outside the Supreme Court building this morning

The opinion surprised Court watchers for two reasons. First, it was Roberts’ vote that mattered, as he and the four liberal-moderate justices voted to uphold the Act, while Kennedy dissented along with Scalia, Thomas, and Alito. (The most common predictions had Kennedy as the swing vote and Roberts joining Kennedy wherever he landed). Second, the majority opinion, written (as universally predicted) by the Chief Justice, upholds the mandate as a tax, based on Congress’ power to “tax and spend.” The four liberal justices joined him in that conclusion, which is thus the law of the land and the part of the opinion binding on the lower courts.

But significantly, while the liberal justices would have also upheld the mandate under the Commerce Clause, the Chief Justice insisted that the mandate was not a valid exercise of Congress’ power to regulate interstate commerce. The four conservative dissenters would have struck down not only the mandate but the entire Affordable Care Act as unconstitutional under the Commerce Clause, and accuses the majority of re-writing the statute by considering the mandate as a tax.

"Roberts gave the conservatives
a very big gift—a ticking time bomb
that could explode in cases down the line."

AFJ President Nan Aron

While the dissenters used some choice words, accusing the majority of “vast judicial overreaching,” the truth is that Roberts has now enshrined the heretofore non-existent distinction between economic “activity” and “non-activity” in the Court’s Commerce Clause jurisprudence. Writing only for himself in that portion of the opinion, his musings on the topic are not binding precedent. Nonetheless, by demonstrating a willingness to narrow Congress’ power to regulate interstate commerce, Roberts has invited further challenges to any number of federal laws and regulations.

An overwhelming majority of federal laws -- from the Civil Rights Act of 1964 to the Fair Labor Standards Act to the Clean Water Act -- were enacted based on Congress’ power to regulate interstate commerce. If our long-standing understanding of the Commerce Clause is upended, all of this is at risk, along with the vision of our society that we have held dear for half a century.

As Justice Ginsburg writes in her opinion, concurring in part and dissenting in part from Robert’s opinion, “[t]he Chief Justice’s crabbed reading of the Commerce Clause harks back to the era in which the Court routinely thwarted Congress’ efforts to regulate the national economy in the interest of those who labor to sustain it.” She writes “[i]t is a reading that should not have staying power.” As we digest the Court’s decision in the weeks to come and look ahead to the very important cases coming before the Court during its next term, Justice Ginsburg’s warning should not be forgotten.