The Magazine

Undoing the Damage

The (legal) case against Obamacare.

Dec 23, 2013, Vol. 19, No. 15 • By TERRY EASTLAND
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The biggest political story in our domestic politics since 2009 has been, as it will be for the foreseeable future, health care. One part of this story is ripe for telling now: the constitutional challenge to the Affordable Care Act (ACA)—also known as Obamacare. That effort, you’ll recall, came in a series of lawsuits that few legal experts thought had much chance of succeeding. But victories in the lower courts led to new appraisals and a growing sense that, in the Supreme Court, the challengers just might win.

President Obama and friends defending the Affordable Care Act, December 3, 2013

President Obama and friends defending the Affordable Care Act, December 3, 2013

pat bencic / up / newscom

As it turned out, the Court’s decision last year in National Federation of Independent Business v. Sebelius was very close, with the ACA barely surviving.

Josh Blackman is an assistant professor of law at the South Texas College of Law and a blogger on legal topics. His politics lean in libertarian and conservative directions, and he admits being “very sympathetic” to the case against the ACA. Indeed, in late 2009, shortly before the law was passed, Blackman was asked to help write a report explaining its constitutional infirmities, a document some legal conservatives hoped to send to Congress. He declined on account of his position at the time as a law clerk to a federal judge. That was the right thing to do. But even if Blackman hadn’t been clerking, he might well have decided not to become involved; for, as he indicates here, he was concerned that a decision striking down the ACA, which President Obama regards as his principal domestic achievement, would be perceived in political terms and thus undermine the notion that the Court is above politics.

Blackman’s sympathy for the constitutional arguments against the ACA, and his concern for judicial restraint in this landmark case, help shape a sure-footed narrative that benefits from his reporting. Blackman interviewed more than 100 people, among them attorneys who represented the challenging parties and federal lawyers who defended the ACA, as well as journalists who covered the case.

He usefully begins by explaining the difficulties involved in regulating health care, as well as the conservative origins (more than 20 years ago at the Heritage Foundation!) of the so-called individual mandate, and Obama’s decision to endorse the mandate after having opposed it during the 2008 campaign. 

The ACA was passed on straight party-line votes on March 23, 2010, and before the ink of the president’s signature “was even dry,” writes Blackman, the constitutional challenge to it commenced, with lawsuits filed in courts across the country. Blackman shows how each fared, and how the case from Florida—a coordinated challenge that united 27 states in opposition to the ACA—became the one that the Supreme Court reviewed.

Here, in Unprecedented—so titled for the many ways in which the ACA and the legal challenge to it represent new developments—Blackman covers the legal strategies on both sides; the oral argument in the Supreme Court that consumed six hours over the course of three days; the rhetoric outside the Court (in political Washington) as to how the justices should decide the case; and, of course, the decision itself, in which Obamacare was sustained, thanks to Chief Justice John Roberts.

At the heart of the ACA is the individual mandate, which seeks to expand health care coverage by requiring individuals to buy insurance and imposing on those who do not a penalty paid to the IRS. What many regarded as the key legal question in NFIB was whether the mandate was a valid exercise of the commerce clause, which, in famously spare terms, gives Congress the power to “Regulate Commerce .  .  . among the several states.”

Chief Justice Roberts found that the mandate could not be supported by the commerce clause, a position also taken by Justices Scalia, Kennedy, Thomas, and Alito. In Roberts’s words, which, as Blackman points out, echoed the arguments of the challengers: “Congress has never before attempted to use the commerce power to order individuals not engaged in commerce to buy an unwanted product”—in this case, health insurance—and “nothing in the text to the Constitution suggests it can.”

As we know, the fact that the mandate failed under the commerce clause did not mean that the ACA was struck down. As Blackman relates, Roberts, stating that the Court must resort to “every reasonable construction .  .  . in order to save a statute from unconstitutionality,” read the mandate as imposing not a penalty but a tax, and, as such, as a valid exercise of the congressional power to levy taxes. In sum, you either have insurance or you don’t—either being a valid option—and if you don’t have insurance, you pay not a penalty but a tax increase. The Court’s four judicial liberals—all of whom believed the mandate was constitutional under the commerce clause—joined Roberts in this part of his opinion, thus creating a tax-power majority of five for saving the mandate. 

Roberts also addressed the constitutionality of the other provision in the ACA designed to expand health care coverage, which was focused on those not able to buy insurance. Under the so-called Medicaid expansion, states could receive new funding under Medicaid if they provided more insurance for more people. Failure to comply with the law’s conditions meant, however, that a state could lose not just the new funding for the expansion but all of its Medicaid money. 

While the states had not won on this issue in the lower courts, Roberts agreed with their argument that the threat of withholding served “no purpose other than to force unwilling states to sign up for the new program.” That was a serious threat—“a gun to the head,” he wrote—and as such it triggered the Constitution’s prohibition against unlawful coercion, a view shared by the two judicial liberals who joined this part of his opinion (Justices Breyer and Kagan) and by the four justices in agreement with Roberts on the commerce clause. 

But Roberts, as Blackman writes, “reached yet another compromise position. .  .  . Congress could offer new funding to states agreeing to participate in the Medicaid expansion .  .  . [but] it could not take away all of the funding from states that chose not to,” a remedy embraced by the four judicial liberals. Roberts thus “had found a way to save the mandate—and the Medicaid expansion.”   

Roberts’s saving efforts drew vigorous objection from Scalia, Kennedy, Thomas, and Alito, who wrote an unusual “joint dissent.” They would have held the ACA invalid in its entirety. They would not have saved the mandate by framing it as a tax, nor would they have remedied the constitutional problem with the Medicaid expansion by reframing the statute and changing its design. The Court “saves the statute Congress did not write,” wrote the dissenting justices. “The Court regards its strained statutory interpretation as judicial modesty. It is not. It amounts instead to vast judicial overreaching.”

Argued March 26-28, 2012, NFIB was handed down on June 28. Three days later, relying on unnamed sources, Jan Crawford of CBS reported that Roberts “initially decided [with] four Justices to strike down” the individual mandate on commerce clause grounds. The implication was that, at some point after the post-argument conference of justices, Roberts had changed his vote or fully made up his mind. Crawford also said that Justice Kennedy had led a “month-long, desperate campaign to bring [Roberts] back to his original position,” and that Kennedy “didn’t give up until the end.”

Hoping to advance Crawford’s story, Blackman reached unnamed sources close to the Court to see what more could be reported; there was not much. Blackman also looked outside the Court, to public statements made after the case was argued by President Obama and other Democrats making clear, as one veteran Supreme Court reporter told Blackman, “that striking down the law would throw the Court into a partisan fight.” Noting Crawford’s observation that Roberts, in his capacity as chief, is “keenly aware of his leadership role on the Court” and also “sensitive to how the Court is perceived by the public,” Blackman concludes that “we may never know for sure whether [the Democrats’ statements] had an impact on the chief justice.”

Later in the book, Blackman notes that Crawford said of her sources: They “flatly reject the idea that Roberts buckled to liberal pressure, or was stared down by the president,” but instead “believe that Roberts realized the historical consequences of a ruling striking down the landmark health care law.” Blackman basically accepts this view: “[Roberts] apparently chose to save the law in the short term in order to preserve what he believed to be the best interests of the Court in the long run.”

That Chief Justice Roberts characterized the individual mandate as a tax was the critical development in NFIB. Interestingly—a point Blackman doesn’t treat in his narrative—the joint dissenters didn’t dispute, as a general matter, the need for judicial restraint and for saving a statute from unconstitutionality in a case where the law under review is, by its terms, unclear. But for them, that was precisely the problem, for the text of the law was clear in every respect: “[W]e cannot,” said the justices, “rewrite the statute to be what it is not.” 

Blackman sees, in the constitutional challenge to Obamacare, certain advances for limited government. Congress now may not invoke the commerce clause to “simply force a person to buy a product.” And if Congress turns to the tax power to accomplish such a goal, “it must take the political consequences of calling it a tax,” as Obama refused to do when the law was being debated in Congress, changing his tune only after the lawsuits were filed. Moreover, “for the first time ever limits have been placed on Congress’s powers to condition its monetary grants to the states.” 

Blackman also sees shifts in our “constitutional culture.” They include a Supreme Court more willing “to police the outer bounds of the federal government’s power, in terms of both federalism and enumerated powers”; judges, on pain of being accused of activism, more willing to “strike down laws by enforcing the entire Constitution,” including its structural provisions; and a federal government on notice that it “will need to justify further expansions of federal power.” 

It will take time to determine whether these actually are doctrinal advances and cultural shifts. Subtract a judicial conservative from the Court, and add, from the hand of Barack Obama (who has three years left in office), a judicial liberal, and the outlook for limited government won’t be as good. 

In NFIB, Chief Justice John Roberts wrote that “it is not our job to save the people from the consequences of their political choices.” Now, a year and a half after the case was handed down, we know more about “the consequences” for health care of choosing a president and Congress determined to pass the law that they did. The Affordable Care Act is not unconstitutional, according to the Supreme Court, but it is proving to be a policy and political disaster, and repeal-and-replace never sounded so good. For that to happen, the people will have to make the right political choices in 2014, and again in 2016. 

Terry Eastland is an executive editor at The Weekly Standard.