Gavin Howe
The Patient Protection and Affordable Care Act, also known as the Affordable Care Act or ACA, was enacted in March 2010 and fully implemented by 2014. The ACA has faced numerous legal challenges since its passage, including lawsuits such as King v. Burwell and House v. Price. One of the main legal challenges to the ACA unfolded in Florida, where a federal district court judge found one of the Act's provisions, the individual mandate, unconstitutional and struck down the entire law. This decision was affirmed by the 11th Circuit Court of Appeals, which held that the individual mandate was unconstitutional but could be severed from the rest of the ACA. The Supreme Court of the United States issued a writ of certiorari in November 2011 to consider appeals in National Federation of Independent Business v. Sebelius and Florida v. United States Department of Health and Human Services, ultimately upholding the individual mandate as constitutional. The Supreme Court has also ruled on other challenges to the ACA, such as Maine Community Health Options v. United States and Texas v. United States, with the law remaining intact as of 2021.
| Characteristics | Values |
|---|---|
| Date of enactment | March 2010 |
| Court cases challenging the ACA | National Federation of Independent Business v. Sebelius, Florida v. United States Department of Health and Human Services, United States House of Representatives v. Price, Maine Community Health Options v. United States, Gonzales v. Raich, Coons v. Goldwater Institute, King v. Burwell, House v. Price |
| States involved in challenging the ACA | Virginia, Florida, Texas, Wisconsin, Alabama, Wyoming, Arizona, Oklahoma, Missouri |
| Political affiliation of states challenging the ACA | Republican |
| Political affiliation of states defending the ACA | Democrat |
| Key legal issues | Individual mandate, expansion of Medicaid, constitutionality, interpretation of the Commerce Clause, Congressional power to tax |
| Supreme Court rulings | Individual mandate is constitutional as a tax, expansion of Medicaid is coercive and effectively optional for states, ACA remains intact |
| Trump administration actions | Weakened individual mandate, reduced funding for advertising and support resources for ACA enrollment, ended cost-sharing reduction subsidies |
| Biden administration actions | Temporarily expanded eligibility for ACA health insurance subsidies and increased financial assistance for lower-income individuals |
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What You'll Learn
National Federation of Independent Business v. Sebelius
The National Federation of Independent Business v. Sebelius was the third legal challenge to the Affordable Care Act (ACA) to reach the Supreme Court. The case was heard in 2012, with the Supreme Court deciding to grant certiorari in 2011. The National Federation of Independent Business, 26 states, several individuals, and Virginia (in a separate lawsuit) sued, challenging the constitutionality of the individual mandate and the Medicaid expansion.
The individual mandate, the most legally and politically controversial aspect of the ACA, requires Americans to purchase health insurance or face a government penalty, with some exceptions for low-income individuals. The mandate was considered necessary to cover the costs of U.S. healthcare. The Supreme Court's decision in National Federation of Independent Business v. Sebelius upheld the individual mandate, declaring it constitutional as a valid exercise of Congressional power to tax.
The Court of Appeals for the Eleventh Circuit upheld the Medicaid expansion as a valid exercise of Congress's spending power but concluded that Congress lacked the authority to enact the individual mandate. The Eleventh Circuit found the mandate to be severable from the Act's other provisions, leaving the rest of the Act intact. The Supreme Court agreed to hear the case, along with two other related cases, to consider the constitutionality of the mandate and the severability of any unconstitutional provisions.
The Supreme Court's decision in National Federation of Independent Business v. Sebelius was significant in upholding the constitutionality of the individual mandate and limiting the expansion of Medicaid under the ACA. The case was also notable for the Court's interpretation of the Anti-Injunction Act and its impact on future challenges to the ACA.
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Florida v. United States Department of Health and Human Services
On January 31, 2011, Judge Roger Vinson ruled in Florida v. United States Department of Health and Human Services that the Affordable Care Act (ACA) was unconstitutional. The ruling was made on the grounds that the individual mandate to purchase insurance exceeds the authority of Congress to regulate interstate commerce. Vinson further stated that the clause was not severable, which meant that the entire law was struck down. The case was brought by 26 states, private individuals Mary Brown and Kaj Ahlburg, and the National Federation of Independent Business.
The individual mandate was the most legally and politically controversial aspect of the ACA. It required Americans to purchase health insurance or face a government penalty, with exceptions for low-income individuals who could not afford to buy insurance. The mandate was considered necessary to cover the costs of U.S. healthcare.
The ACA's expansion of Medicaid was also a key issue in the case. The law required states to provide Medicaid services to individuals whose income was 133% of the federal poverty level or less. This expansion would have accounted for about half, or 14 million people, of those newly insured under the ACA. Florida and the other plaintiff states argued that the increased enrollment in Medicaid spurred by the individual mandate would cost the states millions of dollars in additional Medicaid funding.
On August 12, 2011, a divided three-judge panel of the 11th Circuit Court of Appeals partly affirmed Judge Vinson's decision, agreeing that the mandate was unconstitutional but holding that it could be severed, allowing the rest of the ACA to remain. The Supreme Court of the United States then agreed to hear the case, along with appeals to rulings in National Federation of Independent Business v. Sebelius. The Supreme Court heard oral arguments in March 2012 and decided the consolidated case on June 28, 2012. While the Court declared that the law could not be upheld under Congress's regulatory power under the Commerce Clause, it ruled that the "penalty" for non-compliance was constitutional as a valid exercise of the Congressional power to tax, thus upholding the individual mandate. The Supreme Court also upheld the Medicaid expansion, but as an option that states could choose to decline.
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Virginia's lawsuit against the ACA
The Affordable Care Act (ACA) has been a politically controversial law, with several states seeking to challenge or avoid certain requirements. One of the most notable challenges to the ACA came from Virginia, which filed a lawsuit shortly after the passage of the ACA.
The Virginia lawsuit was separate from another challenge led by Florida, which also argued that the individual mandate exceeded the authority of Congress to regulate interstate commerce. In January 2011, a judge ruled in favour of Florida, declaring the individual mandate unconstitutional and striking down the entire ACA. However, this decision was later reversed by the 11th Circuit Court of Appeals, which held that the individual mandate could be severed from the rest of the ACA, allowing the rest of the law to remain.
The Supreme Court agreed to hear appeals in both the Virginia and Florida cases, along with several other related cases challenging the ACA. In June 2012, the Supreme Court upheld the constitutionality of the individual mandate as a valid exercise of Congress's taxing power. The Court also limited the expansion of Medicaid initially proposed under the ACA, ruling that states must have the option to choose between participating in the expansion or retaining existing payments.
While the Supreme Court rulings largely upheld the ACA, challenges to the law continued in subsequent years. In 2018, a group of 20 states led by Texas and Wisconsin filed a lawsuit arguing that the ACA was now unconstitutional due to the repeal of the individual mandate tax. This led to a series of legal battles, with lower courts issuing conflicting rulings. The Supreme Court eventually took up the case in 2020 and issued a decision in 2021, rejecting the challenge and leaving the full ACA intact.
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The Supreme Court's ruling
In 2012, the Supreme Court issued a ruling in the case of National Federation of Independent Business v. Sebelius, which challenged the ACA's expansion of Medicaid and the individual mandate. The Court held that while the expansion of Medicaid was unconstitutional because it coerced states to comply, the individual mandate was constitutional as a valid exercise of Congress's taxing power. This ruling set a precedent for future challenges to the ACA.
Another significant case, United States House of Representatives v. Price (previously Burwell), was filed in 2014 and settled before the Court of Appeals in D.C. This lawsuit concerned the cost-sharing program and the implementation of the ACA. In 2018, Texas and several other states filed a similar lawsuit, arguing that the ACA was now unconstitutional because the individual mandate tax had been repealed by the Tax Cuts and Jobs Act of 2017. Judge Reed O'Connor ruled that the federal government could not impose a tax on states as a condition of receiving Medicaid funds, but he did not agree that the entire ACA should be voided.
The Supreme Court accepted the case in 2020, and in 2021, it rejected the challenge, ruling that Texas and the other plaintiff states did not have standing to challenge the provision. This decision left the full ACA intact. The Court also ruled that promised risk corridor payments must be made, even without specific appropriation by Congress. This ruling addressed an issue that had generated approximately 50 lawsuits after a 2015 appropriations bill ended the payment of risk corridor funds.
The ACA continues to face legal and political challenges, with some states seeking to oppose or avoid certain requirements. The law has been a topic of presidential campaign rhetoric, and public opinion on the ACA has fluctuated. Despite the challenges, the Supreme Court has upheld the core provisions of the ACA, including the individual mandate and Medicaid expansion, ensuring that the law remains in place.
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The individual mandate
The mandate was challenged in court by states that argued that it was an overreach of Congress's commerce clause powers, the government's well-recognized (but not limitless) power to regulate certain economic activities that either occur between states or substantially affect the states in the aggregate. The court reasoned that the commerce clause allows the government to regulate the actions of those who participate in a market but not the inactions of those who choose not to participate in that market. Without this distinction, the government could regulate practically anything.
While the court rejected the claim that the individual mandate was within Congress's commerce power, the mandate was found to be constitutional as a tax. The penalty, though not labeled a tax in the ACA, is similar in several ways to other taxes. Its amount is determined by income, number of dependents, and filing status, and it is paid into the treasury when filing income tax. It is not a punishment for an illegal action: failure to purchase health insurance is not illegal, the penalty for refusing to purchase health insurance is less than the cost of paying for actual insurance, and there are no criminal sanctions attached.
Trump weakened the individual mandate with his first executive order, which limited the enforcement of the tax. For example, tax returns without indications of health insurance ("silent returns") will still be processed, overriding Obama's instructions to reject them. Trump reduced funding for advertising for exchange enrollment by up to 90%, with other reductions in support resources used to answer questions and help people sign up for coverage. The CBO said these reductions would reduce ACA enrollment. In 2017, President Trump and a Republican-controlled Congress also attempted to repeal and replace the ACA law, but were unsuccessful.
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Frequently asked questions
ACA stands for the Affordable Care Act, a comprehensive health care reform law enacted in March 2010.
The first case challenging the ACA was Virginia Attorney General Ken Cuccinelli suing the Secretary of Health and Human Services Kathleen Sebelius in 2010.
One of the main proceedings unfolded in Florida, where the state won a victory against the federal government when a federal district court judge found one of the Act's provisions unconstitutional.
The Supreme Court declared that the law could not be upheld under an argument based on the regulatory power of Congress under the Commerce Clause. However, the "penalty" was deemed constitutional as a valid exercise of the Congressional power to tax, thus upholding the individual mandate.
The Supreme Court granted certiorari in 2019 in this case, which challenged the cutoff of risk corridor funds that resulted in the bankruptcy of many co-ops.
