Supreme Court Obamacare Decision Analysis: 4 Things to Watch For


The Supreme Court is gearing up to make its decision on the legality of the Affordable Care Act (better known as Obamacare), which means the next five days in the world of health policy will be exciting. The ruling could come as soon as this Thursday, although many predict the announcement will be made next Monday, on June 25.  Either way

President Obama signed Obamacare into law in March 2010, and two years later – three months ago – the Supreme Court began hearing oral arguments about the law’s constitutionality. It has been quite the saga, gripping national media outlets and the general public.

Here are the four issues the Court is likely to issue a decision about, along with the possible outcomes:

1) Does the Anti-Injunction Act (AIA) prohibit states from challenging the individual mandate?

These are technicalities. Lawsuits are not allowed to challenge a tax before the tax has been paid.  Note that Obamacare strategically uses the word “penalty,” instead of imposing a “tax,” to outline the consequences for Americans who do not buy health insurance.

Possible Outcome #1: AIA does not allow the questioning of the individual mandate’s constitutionality and the mandate would be implemented in 2014. In the future, an American who refuses to purchase health insurance and is forced to pay a penalty in 2015 could still raise another lawsuit.

Possible Outcome #2: AIA does not apply and the Court can move on to other issues (individual mandate and severability). 

2) Is the individual mandate unconstitutional?

This is the most contentious issue in the ruling that many argue is essential to uphold the rest of Obamacare. The mandate requires every American to purchase health insurance or pay a penalty. This is where the currently uninsured 49.9 million Americans (16.3%) could see change.

Possible Outcome 1: Court upholds individual mandate as constitutional and requires every American to have a government-approved health insurance plan (social insurance, employer-sponsored or health exchange programs).

Possible Outcome 2: Court strikes down individual mandate as unconstitutional and moves on to determine if mandate can be severed from the rest of the law (i.e. can other parts of law still be upheld without mandate).

3) If unconstitutional, can the individual mandate be severed from the rest of the law?

The question is whether or not Obamacare can still operate as an effective law without the individual mandate. Many critics, including the Heritage Foundation, claim the two are so intertwined that they can’t be separated. The Obama administration and the Eleventh Circuit maintain the mandate is severable.

Possible Outcome 1: The mandate is severable from the rest of the law. Americans will not be required to purchase health insurance and will not face penalties.

Possible Outcome 2: The mandate is NOT severable and the Court, having struck down the individual mandate as unconstitutional, also wipes out the rest of Obamacare. If this happens, the country is essentially right back where it started and will need to restart discussions on health care reform. 

4) Can Congress require states to comply with the expansion of Medicaid?

Obamacare requires an increase in Medicaid coverage to 133% of the Federal Poverty Line to provide greater access to social insurance coverage for Americans. The debate remains as to whether the federal government can require such increases from states or remove all their Medicaid funding.

Possible Outcome 1: The federal government can require states to comply with new Medicaid expansion provisions or lose all Medicaid funding.  This would help an additional 15 million Americans who would have otherwise not qualified for coverage by 2019.

Possible Outcome 2: The federal government can NOT require states to comply, therefore allowing states to manage and determine benefits for the program tailored to their demographics. 

The Supreme Court has a big decision ahead that will, either way, change the landscape of health care in the United States.