Legal Alert

Stand Down – The Affordable Care Act Survives Another Supreme Court Challenge

By Brian M. Pinheiro, Jean C. Hemphill, and Edward I. Leeds
June 17, 2021

In a 7-2 decision, the Supreme Court rebuffed a challenge to the constitutionality of the Affordable Care Act, finding that the plaintiffs who challenged the ACA lacked standing to bring the lawsuit.

The challenge arose under the individual shared responsibility provisions of the ACA, which originally required most taxpayers to pay a prescribed assessment if they did not obtain minimum essential health coverage. In the 2017 Tax Cuts and Jobs Act, Congress reduced the amount of that assessment to zero dollars. Given that the Supreme Court previously had upheld the individual shared responsibility provisions as an appropriate exercise of Congress’s taxing power, and that the provisions no longer collected any taxes, the plaintiffs argued that the provisions could no longer be supported by any authority given to Congress under the Constitution. They then contended that the individual mandate is so essential to the ACA that the entire statute must be invalidated.

The Supreme Court decision does not reach those issues. It focuses on whether the plaintiffs bringing the lawsuit have suffered injuries that could be fairly traced to the allegedly unlawful individual provisions. The Supreme Court ruled that they did not. 

The Supreme Court observed that, with no assessment, there is no reasonable threat of enforcement of the individual shared responsibility provisions against individuals. Without any reasonable likelihood of enforcement of the contested provisions, the Court found that the individuals have suffered no harm. 

The states argued that they are harmed because the individual shared responsibility provisions increase Medicaid enrollment, which is partly funded by the states. The Supreme Court rejected that argument, finding that the states offered no evidence that Medicaid enrollment increases when the assessment to be imposed for not obtaining minimum essential coverage (which Medicaid would provide) is zero dollars. The states cited other burdens under the ACA, but the Court found them to arise from ACA requirements other than the individual shared responsibility provisions.

The Supreme Court majority did not address certain arguments presented by the states and individuals because they had not been raised earlier in the litigation or in relevant briefs.  Whether challenges based on those arguments or different theories of standing will work their way to the Supreme Court for yet another decision on the constitutionality of the ACA remains to be seen. For at least a few years to come, the ACA seems safe from yet another Supreme Court review of its constitutionality.

Ballard Spahr attorneys established the Health Care Reform Dashboard blog as a one-stop resource about the Affordable Care Act. The blog’s scope has expanded with time to keep readers up to date on health care and health benefits developments.

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