Lisa Soronen State and Local Legal Center

It Takes Five Votes to Win… To make sense of blockbuster Supreme Court decisions you need count for 5 votes and figure out the Court’s reasoning

Counting Votes Should be Easy But don’t tell that to CNN or Fox News 4 issues means endless possibilities Tax or penalty via the Anti-Injunction Act? Individual mandate constitutional? Act severable? Medicaid coercive?

As Clear as Mud? “Did Roberts originally vote to invalidate the mandate on commerce clause grounds, and to invalidate the Medicaid expansion, and then decide later to accept the tax argument and essentially rewrite the Medicaid expansion…to preserve it?” David Bernstein, Volokh Conspiracy Washington Post ask: Why do we need Supreme Court Cliff Notes? need-supreme-court-cliffs- notes/2012/06/29/gJQAo59JCW_story.html need-supreme-court-cliffs- notes/2012/06/29/gJQAo59JCW_story.html

Anti-Injunction Act Five Justices (Roberts and the liberals) say the “shared responsibility payment” is a penalty and not a tax Why? Because Congress called it a penalty, Congress called other things in the Act “taxes,” and just because the “penalty” is assessed and collected as a tax doesn’t mean it is a tax Why does this issue matter? The lawsuit can proceed as a result(we don’t have to wait until 2014 when the first “shared responsibility payment” is made for a court to be able to reach a decision on the merits)

Individual Mandate Five Justices (Roberts and the liberals) concluded the “shared responsibility payment” is constitutional as a “tax” not a “penalty” for constitutional purposes Article I, Section 8 of the Constitution says Congress may “lay and collect Taxes” This is the very simple argument: individual mandate doesn’t force anyone to buy insurance it simply taxes those who don’t; the federal government has the constitutional authority to tax

Individual Mandate Courts look at three factors to look at the determine if an exaction is a tax: how heavy is the burden, is scienter a factor, who is doing the collecting This is a tax: it is far less than the cost of insurance, it is assessed not based on the state of mind of the violator, and it is collected by the Internal Revenue Services The fact that it influences conduct is “nothing new” (cigarette and saw-off shot gun taxes) Not a punishment for doing something unlawful – 4 million people are expected to pay the tax

Huh? “I’m wondering whether a close reading of the opinions will somehow persuade me that the individual mandate can be a ‘tax’ for constitutional purpose, but ‘not a tax’ for Anti- Injunction Act purposes.” David Bernstein, Volokh Conspiracy The dissent isn’t impressed by this “verbal wizardry”: “The Government and those who support its position on this point make the remarkable argument that §5000A is not a tax for purposes of the Anti-Injunction Act … but is tax for constitutional purposes.” Congress could have said this isn’t a tax for Anti-Injunction purposes but it didn’t

Dissent on Taxing Power The exaction in this case is imposed for a violation of the law (shall…requirement…penalty) IRS collects a lot of penalties Penalties varying based on ability to pay is an “utterly familiar practice” The absence of a scienter requirement does not suggest a tax (presence of scienter would suggest a penalty) The mandate and the penalty are located in Title I of the Act, “its operative core,” rather than in Title IX containing the Act’s “Revenue Provisions”

Here is the Real Coup… Five Justices (Roberts and the conservatives) conclude that the that the individual mandate isn’t constitutional under the Commerce Clause (or the Necessary and Proper Clause) Why doesn’t this matter? 5 votes upheld the individual mandate as a tax Why does this matter? It is a victory for federalism

Why No Commerce Clause, Justice Roberts? “The power to regulate commerce presupposes the existence of commercial activity to be regulated.” (This case is about inactivity) “[T]he Government’s logic would justify a mandatory purchase to solve almost any problem.” (No limiting principle—if you can force people to buy health insurance you can force them to buy anything--broccoli horrible) “The phrase ‘active in the market’ cannot obscure the fact that most of those regulated by the individual mandate are not currently engaged in any commercial activity involving health care, and that fact is fatal to the Government’s efforts to ‘regulate the uninsured as a class.’” (It does not matter that the healthy will someday buy insurance, they aren’t buying it now).

If You Have a Free Moment Justice Ginsburg meets Justice Robert toe-to-toe on every point: Activity and inactivity are two sides of the same coin Requiring people to buy health insurance is different than requiring them to buy anything else – there will be no “broccoli horrible” Everyone will need health care someday. Period.

Justice Roberts Writes Alone Why when the four other conservative Justices agree with him on the Commerce Clause? They want to make a point in their co-authored opinion Dissenters are bothered by the unfairness of those not needing health care being forced to pay for everyone else Other than that, the opinion (to me at least) reads a lot like Roberts’ opinion

Necessary and Proper When is the last time this topic has come up in casual conversation? Roberts: this provision is really about the execution of powers already granted; the individual mandate involves the creation of a right Dissent agrees with Roberts: we don’t know the exact scope of the Necessary and Proper Clause but “the proposition that the Federal Government cannot do everything is a fundamental precept” Ginsburg (Sotomayor, Breyer and Kagan) opine that the individual mandate is necessary to make the entire law work (guarantee-issue and community rating) At least one commentator sees no change in the law as a result of this case

Medicaid Brace yourself for the vote counting but first the big picture If states want to participate in the Medicaid expansion they can (but they have to follow the rules) (voluntary carrot okay) If states don’t want to participate in the Medicaid expansion they don’t have to and they can continue to participate in the unexpanded version of Medicaid (mandatory stick not okay)

The Votes are In… Seven votes for the Medicaid expansion being unconstitutionally coercive (Roberts, Breyer, Kagan, Scalia, Kennedy, Thomas, and Alito) Five votes for striking down the stick (cut off all funds) but keeping the carrot (participate if you want to) (Roberts, Ginsburg, Breyer, Sotomayor, & Kagan)

Let’s Look a Little Closer at the Math Four Justice say Medicaid and the entire expansion should be struck down (Scalia, Kennedy, Alito, & Thomas) Three Justice say Medicaid is coercive but only the stick should be struck down (Roberts, Kagan, and Breyer) 2 Justices (Ginsburg & Sotomayor) say Medicaid isn’t coercive but clearly 7 of you think it is so we will keep things easy and create a majority for keeping the carrot and striking the stick

Why Coercive, Justice Roberts? No legitimate choice here…”it is a gun to the head” This isn’t South Dakota v. Dole (5 percent of highway funds) States stand to lose all Medicaid funding which is 20% of the average state budget The expansion is really a new program And OBTW, “We have no need to fix a line either. It is enough for today that wherever that line may be, this statute is surely beyond it.”

Why Keep the Carrot, Justice Roberts? The expansion in and of itself is okay The penalty with non-participation isn’t okay I’m not rewriting anything…I’m just deleting the unconstitutional part

Why Would the Dissent Ditch it All? Side note: dissents reasoning for coercion sounds a lot like Roberts’ (“no real choice”) ACA depend on states’ having no choice, many low-income people can only obtain insurance through the Medicaid expansion A state’s withdrawal might cause everyone to have higher premiums (Medicaid expansion will no longer offset the costs to the insurance industry imposed by the ACA) If stated don’t join the expansion they will just be subsidizing other state’s expansions Congress should do the rewriting

Justice Ginsburg is Truly Tireless “A ritualistic requirement that Congress repeal and reenact spending legislation in order to enlarge the population served by a federally funded program would advance no constitutional principle and would scarcely serve the interests of federalism.” Congresses should be able to change Medicaid; states have been warned Medicaid has been changed again and again; states have a lot of autonomy Only Medicaid funds are threatened to be withheld; federal government could do Medicaid itself Bottom line when it comes to the remedy: do a salvage operation not a demolition

What about Severability? This issue is only relevant to the dissent because they would strike down the individual mandate and the Medicaid expansion entirely Will the truncated act operate in a manner Congress intended? Would Congress have enacted the remaining provisions standing alone? Dissent would invalidate the entire act given how interrelated the provisions are Universal coverage was the goal of the act; it is no longer possible without the individual mandate and Medicaid

A Good Witch or a Bad Witch? Putting aside how you feel about the Affordable Care Act, there were many victories for federalism Individual mandate wasn’t upheld on Commerce Clause grounds (no broccoli horrible) For the first time ever the Court finds a federal statute coercive Choice is good right? Some states want the Medicaid expansion; others don’t

Big Questions What was Roberts thinking (to vote with the Court’s left)? If the decision would have been 5-4 individual mandate unconstitutional this decision would have been seen as political; the Court as an institution looks better if all Justices don’t vote on political party lines Did Robert’s switch votes well after oral argument and try to bring Kennedy along? In 75 years no President’s signature piece of legislation has been struck down--Roberts’ position is one of judicial restraint (which is a conservative value) Your legacy isn’t interesting if you just do what people expect you to

Big Questions I am not done with Roberts yet. Regardless I think Roberts can sleep at night for three reasons: Lifetime tenure If Roberts’ only choice was the Commerce Clause I don’t think he could have pulled the trigger Roberts knows what you know: if Congress doesn’t like this they can repeal it tomorrow It is also possible Roberts simply believes everything he wrote

Big Questions What will the states do about taking the Medicaid money and what will the implications be? So far: yes, no, maybe What is the future of the coercion doctrine? When will the federal government have to put the stick away? Always or only in the case of a program as big as Medicaid? Would a prior warning have made a difference? The Justices mostly agreed about coercion (only Justices Ginsburg and Sotomayor found no coercion) Will states be embolden by this partial victory to more routinely challenge federal spending clause legislation?

Big Questions How will this ruling affect the election? Will an undecided voter in Ohio view the ACA more favorably now that is has the Supreme Court’s blessing? Most of the court watchers were wrong about the outcome in this case. What is to be made of an institution that seems so unpredictable? Fewer than 50% of Americans have ever supported the law but the data is deceptive; many of them wanted the law to go further. What does this mean?

Big Questions How will the federal government collect the “shared responsibility payment”? Justices Kagan and Sotomayor might be on the Court for a long time and they clearly view the Commerce Clause broadly. Will this have future implications? Does the fact that inactivity cannot be regulated by the Commerce Clause have many (any?) practical implications? (is there a reason none of the examples of possible expanded federal power were serious— broccoli horrible?)