It Came From the Depths…SCOTUS Ruling on Affordable Care Act

Emerging from a stormy sea of changing headlines, is a 193-page opinion from the Supreme Court, which largely upholds the Patient Protection and Affordable Care act, affectionately known to some as “Obamacare.” No doubt you’ve already heard in this lightning fast Age of Information that various news outlets preemptively got it wrong, declaring the mandate struck down. I won’t name names.

It’s no wonder that Court Watchers were befuddled as the Justices took turn reading sections of the opinion from the bench, and thousands of Court Wonks hung on live blogs and coverage of the historic event. The opinion consists of four sections, some subdivided, an additional partially concurring opinion, and two separate dissents, all of which are joined by varying numbers of judges. Confused yet?

The Court issued an opinion on two aspects of the law, a Medicaid expansion and the individual mandate. The expansion is upheld as far as adding more eligible persons to the rolls, but struck down with respect to limiting funds to states that refuse to do so.

The mandate is upheld overall, surviving by being being both a tax and not a tax. Yup….Bear with me.

The mandate is a “Penalty” and not a “Tax” in order to have a ruling on this lawsuit. A dusty old law known as the Anti Injunction Act could have precluded a suit, and a ruling, since the law hasn’t fully gone into effect and no “Penalties” have been collected. The Court determined Congress didn’t intend to preempt suits over this “Penalty”.

So, even though the mandate isn’t a tax for purposes of whether the Court can issue a ruling, the mandate’s “Penalty” is upheld under the power of Congress to “lay and collect taxes.” The opinion sums up this conundrum:

“The Affordable Care Act describes the “[s]hared responsibility payment” as a “penalty,” not a “tax.” That label is fatal to the application of the Anti-Injunction Act. It does not, however, control whether an exaction is within Congress’s power to tax.”

So there you go. As my grandmother used to say, “Clear as mud.”

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