Obama Asks Supreme Court to Rule on Individual Mandate

September 28, 2011

September 28, 2011 — The long and far-flung legal contest over healthcare reform and its requirement for individuals to obtain insurance coverage or pay a penalty is quickly moving to its World Series — the US Supreme Court — but not this fall.

Today, the Obama administration asked the nation's highest court to rule on the constitutionality of the individual mandate, the cornerstone of the Affordable Care Act (ACA). While some US district and appellate courts have affirmed the requirement as a proper cure for cost-shifting caused by the uninsured, others courts have struck it down as exceeding the regulatory powers granted Congress by the constitution's Commerce clause. In short, those courts have declared that the government cannot compel an individual to buy a product or service.

One of the rulings against the individual mandate came last month from the US Court of Appeals for the Eleventh Circuit in Atlanta, Georgia. It is this decision that the Obama administration is appealing to the Supreme Court. Yesterday, the plaintiffs in that case — who include officials from 26 states — filed their own appeal with the Supreme Court because the appellate court did not invalidate the entire law on account of the individual mandate, contrary to the plaintiffs' position.

In a press briefing today a senior official in the US Department of Justice (DOJ) said that given the timing of the filings, the Supreme Court could very well hear oral arguments next spring and issue a decision next summer if it accepted the case. When asked if the administration is seeking to resolve the legal battle before the presidential election in November 2012, the official replied that the DOJ is focused on "policy considerations."

"It’s important to get a decision from the Supreme Court sooner than later," the DOJ official said. The federal government, state governments, and private insurers, he explained, all need sufficient lead time to implement the ACA, especially its health insurance exchanges, scheduled to go live in 2014. The longer the question of the law's constitutionality remains open, the more that its implementation will be hampered by uncertainty, he said. "We would begin to see effects on the ability of people to arrange their affairs."

Appellate Courts Disagree About the Individual Mandate

Legal disputes typically get kicked upstairs to the Supreme Court when US appellate judges issue conflicting opinions. That divergence has happened with the ACA litigation. While the appellate court in Atlanta voided the individual mandate, another one in Cincinnati, Ohio, upheld it in June. That court agreed with the Obama administration's argument that individuals who forgo insurance coverage nevertheless actively participate in the interstate healthcare market because they will inevitably need healthcare services. By receiving free or subsidized care, the argument goes, they drive up healthcare costs, insurance premiums, and taxes for others.

A third appellate court in Richmond, Virginia, passed on the question of the mandate's constitutionality earlier this month when it overturned 2 lower court decisions, one affirming the provision, the other striking it down. This appellate court tossed out both case on jurisdictional grounds. In one case, the court said it could not decide on the merits of the mandate because the plaintiffs had construed the penalty on uninsured scofflaws as an improper tax. A law called the Anti-Injunction Act (AIA) prohibits legal attempts to restrain the assessment or collection of a tax beforehand, according to the appellate court.

The DOJ official said in today's briefing that the Obama administration believes that Congress did not intend the AIA to apply to the individual mandate, and that the AIA does not bar the Supreme Court from ruling on the individual mandate.

In its petition it filed with the Supreme Court today, the administration asked the high court to decide whether the AIA should block legal challenges to the ACA.


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