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The judicial judo of Obamacare

By Benedict Coyne and Stephen Keim - posted Wednesday, 26 September 2012

The provision of health care is today a concern of national dimension, just as the provision of old-age and survivors' benefits was in the 1930's. In the Social Security Act, Congress installed a federal system to provide monthly benefits to retired wage earners and, eventually, to their survivors. Beyond question, Congress could have adopted a similar scheme for health care. Congress chose, instead, to preserve a central role for private insurers and state governments.

Justice Ginsburg at 2.

In a surprising judgment in National Federation of Independent Business v Sibelius, Secretary of Health and Human Services, delivered on 28 June 2012, the Supreme Court came within a wet liberal's whisker of destroying perhaps the key decision of Congress in President Obama's first term. In a complex and divergent decision, the Court fundamentally upheld the constitutionality of the Obama Administration's important Patient Protection and Affordable Care Act 2010(PPACA).


Opinions of the Court were variously divided and surprising alliances were formed including the usually conservative Chief Justice Roberts lining up with the liberal bloc of the Court composed of Justices Ginsburg, Breyer, Sotomayor, and Kagan to save the core of the legislation. The other three arch conservatives, Justices Scalia, Thomas and Alito, remained true to type, with the occasional swing man, Justice Kennedy, remaining this time firmly in the far-right fold.


The PPACA represents the Obama Administration's comprehensive overhaul of the American health care system. It was enacted by Congress in 2010 to decrease the overall cost of health care and to increase the number of Americans with health insurance coverage. One of the key provisions, central to this case, is the individual mandate which enforces universal health insurance coverage (s 5000A). The mandate requires most Americans to maintain "minimum essential" coverage or be forced to make a "shared responsibility payment" to the Internal Revenue Service (IRS) along with their taxes as a "penalty" for non-compliance. The mandate is essential to the Act because, the PPACA does away with an insurer's ability to factor an individual's health characteristics into their insurance premium, making near universal coverage essential.

The other notable provision considered in the case, was the Medicaid expansion under section 1396c. The PPACA expanded the scope of the Medicaid program from federally funding States to assist certain specified in need categories of people to requiring and funding states to provide assistance to all adults whose incomes do not exceed 133% of the federally determined poverty level.

Chief Justice Roberts & the Majority

Chief Justice Roberts delivered the lead judgment of the Court. Roberts and the four conservatives, Scalia, Kennedy, Thomas and Alito formed the majority in finding that the individual mandate was not supported by the commerce head of power in the Constitution, essentially, on the basis that inaction in failing to purchase health insurance could not be construed as a "commercial activity".

Justice Ginsburg strongly and persuasively dissented on this point and was joined by the other three liberal Justices, Breyer, Sotomayor and Kagan.

However, Chief Justice Roberts abandoned his conservative colleagues to join in agreement with Justices Ginsburg, Breyer, Sotomayor and Kagan to find that the mandate was supported by Congress's taxation power. This decision by the Chief Justice has caused an earthquake within conservative politics in the US.


On the Medicare question, a new larger majority formed. Only Justice Sotomayor stayed with Justice Ginsburg to support the proposition that it was permissible for Congress to threaten to withdraw all Medicaid funding to a state if that state did not accept the additional funding and the obligation to provide the additional coverage. The other seven justices, conservative and liberal, found that the terms of the Medicaid expansion were impermissibly coercive upon the States given them no effective choice whether to accept the monies offered. Importantly, the four liberal Justices joined with the Chief Justice to hold that that the new Medicaid provisions could be severed and were not fatal to the validity of the rest of the PPACA.

The Joint Dissent

Conservative Justices Scalia, Thomas and Alito were joined by the occasional swing man, Justice Kennedy, in a judgment that would have effectively shredded the 900 page PPACA, deciding against the mandate on both the commerce and taxation point and finding the rest of the Act to be non-severable.

The Taxing Power Argument

The joint dissenters held that the individual mandate is neither a constitutional exercise of Congress' power under the Commerce Clause nor under the Tax and Spending Power. On the tax and spending power, the concern was not that Congress could not have achieved its objective under that head of power but the form in which Congress couched its words in a form which suggested a penalty.

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This article was first published in Justinian in August.

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About the Authors

Benedict Coyne is a National Committee Member and Queensland Convenor of Australian Lawyers for Human Rights (ALHR). He completed a graduate law degree at Southern Cross University graduating with first class Honours and the University Medal amongst other awards.

He had an incredibly interesting year in 2011 as Associate to the Hon Justice Bromberg at the Federal Court of Australia in Melbourne, including hearing (and substantially researching) the Eatock v Bolt case. He was admitted to practise in Victoria in November 2011 and is currently a lawyer in the new major projects and class actions department of Maurice Blackburn Lawyers in Brisbane.

He enjoys writing and performing poetry in his spare time.

Stephen Keim has been a legal practitioner for 30 years, the last 23 of which have been as a barrister. He became a Senior Counsel for the State of Queensland in 2004. Stephen is book reviews editor for the Queensland Bar Association emagazine Hearsay. Stephen is President of Australian Lawyers for Human Rights and is also Chair of QPIX, a non-profit film production company that develops the skills of emerging film makers for their place in industry.

Other articles by these Authors

All articles by Benedict Coyne
All articles by Stephen Keim

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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