Skip to main content
Top Button
The U.S. Supreme Court Upholds the Affordable Care Act, Again The U.S. Supreme Court Upholds the Affordable Care Act, Again

The U.S. Supreme Court Upholds the Affordable Care Act, Again

For the third time, the United States Supreme Court has rejected a constitutional challenge to the Affordable Care Act (“ACA”), commonly referred to as Obamacare. In a 7-2 decision issued on June 17, 2021, the Court found that the plaintiffs did not have standing to challenge the ACA’s minimum essential coverage provision because they could not demonstrate a past or future injury.

In issuing its decision in 2012 on the constitutionality of the individual mandate under the ACA, a 5-4 majority of the Supreme Court found that the individual mandate and the related penalty for failure to obtain such health coverage was a proper exercise of Congress’ taxing power. After this decision, it appeared that the constitutionality of the ACA was a settled issue; however, legal attacks on the ACA continued.

After the Tax Cuts and Jobs Act of 2017 eliminated any penalty for failing to comply with the individual mandate, several states filed an action in the U.S. District Court for the Northern District of Texas taking the position that the elimination of the tax penalty meant that Congress was no longer exercising its taxing power, and therefore, the individual mandate was no longer constitutional. On December 14, 2018, the District Court issued its decision and determined that the individual mandate was no longer constitutional. The Court also found that the individual mandate was an essential component of the ACA, and the rest of the Act would not operate as intended without the individual mandate, so the individual mandate could not be “severed” from the rest of the ACA, and the entire Act should be struck down.

The District Court's decision was appealed to the U.S. Court of Appeals for the Fifth Circuit. Oral arguments were held on July 9, 2019. The Fifth Circuit issued its long-awaited decision on December 18, 2019. In a 2-1 decision, the Fifth Circuit agreed with the District Court that the elimination of the tax penalty caused the individual mandate to be unconstitutional. The Fifth Circuit also found, however, that the District Court did not conduct a thorough enough analysis of the issue of whether the individual mandate is severable from the rest of the ACA such that the entire Act did not need to be invalidated. The Appeals Court remanded the case back to the District Court for the lower court to do this analysis.

The states defending the constitutionality of the ACA filed a petition with the U.S. Supreme Court asking the Court to immediately accept certiorari of the Fifth Circuit decision. To the surprise of many, the Supreme Court announced on March 2, 2020, that it had decided to accept certiorari. Perhaps, trying to avoid the issue being even more highly politicized during the presidential campaign, the Court decided to delay oral arguments until after the 2020 election. Oral arguments were scheduled for November 10, 2020. One of the questions the Court identified to be discussed during oral argument was whether the plaintiffs had standing to challenge the ACA.

During oral argument, it became clear that several of the Justices, including Justice Kavanaugh and Chief Justice Roberts, were likely to reject the challenge to the ACA. Chief Justice Roberts was the key fifth vote upholding constitutionality of the ACA in the original case. During oral argument, he signaled where he stood on this third challenge when he made the following statement:
“I think it’s hard for you to argue that Congress intended the entire Act to fall if the mandate were struck down when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the Act. I think, frankly, that they wanted the Court to do that. But, that’s not our job.”
In rejecting this case on the basis of lack of standing, the Court is sending a clear message that despite having a majority of conservative justices, the Court does not intend to re-visit the constitutionality of the ACA. Rather, if the ACA is to be changed and/or struck down, it will have to be done through the legislative process and not the courts.

For more information, contact Kevin Woodhouse, Taryn Stone or another member of our Health Care Group, or Chris Sears, Tara Sciscoe or another member of our Employee Benefits Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
View Full Site View Mobile Optimized