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SMU Sources: Supreme Court Health Care Ruling

In The Media

Law Professor Nathan Cortez

Economics Professor Mike Davis

June 28, 2012

DALLAS (SMU) – The U.S. Supreme Court turned conventional wisdom on its ear last week with its decision to uphold the Obama administration’s sweeping health care law, the Affordable Care Act. SMU experts analyze the ruling’s impact on every American, the surprising interpretation of constitutional law, and what the ruling says about Chief Justice Roberts and the rest of the court.

States now have 2014 deadline to implement ‘Obamacare,’ and Congress has authority to expand state Medicare

SMU Dedman School of Law Professor Nathan Cortez specializes in health care law and legislation. Cortez notes:

Nathan Cortez“Today’s surprising Supreme Court decision to uphold the entire Affordable Care Act reaffirms our federal government’s ability to respond to problems of national scale like health care. Almost everyone anticipated that the mandate to purchase health insurance would rise or fall based on the Constitution’s Commerce Clause. But in a surprising move — in a 5-4 opinion written by Chief Justice Roberts and joined by the Court’s liberal members — upheld the mandate using the less flashy Tax Clause. Thus, the Court held that Congress can impose an individual mandate under the Tax Clause, but not the Commerce Clause, upholding the signature domestic accomplishment of the Obama administration, while affirming the intuition of many that Congress does not have unlimited authority to regulate interstate commerce,” Cortez said.

“In the less appreciated but extremely important undercard, the Court also preserved the authority of Congress to expand state Medicaid programs. Although the Court held that Congress could not withhold all Medicaid funding (existing and future) if states refused to expand Medicaid eligibility and benefits, the Court did uphold the authority of Congress to condition new funds on such expansion. This holding preserves coverage for Americans living near or below the poverty line,” Cortez said.

“It’s not often the Supreme Court issues an opinion that affects every person in the country. The decision resolves lingering uncertainty over the case, the scope of Congressional authority and the health care system. States (many of which joined the constitutional challenge and have delayed implementing the law) must now begin in earnest to implement the Affordable Care Act by the 2014 deadline. Congressional Republicans and Mitt Romney will undoubtedly ratchet up the rhetoric to repeal the Act. And millions of patients around the country can now expect more certain health insurance coverage, without worrying about preexisting conditions and the like,” Cortez said.

A reasonable exercise of taxing power

SMU Dedman School of Law Professor Lackland Bloom is a specialist in constitutional law and the rhetoric of Supreme Court opinions. Bloom says the ruling is surprising in light of Congressional avoidance of taxing power:

Lackland Bloom“The result is surprising. I’m not sure that anyone expected the compromise that the Court molded. The challengers prevailed on their primary argument that the government could not use the Commerce Clause to require a person to buy a product. Chief Justice Roberts’ opinion explains quite persuasively why the mandate could not be justified under the Commerce Clause. A decision to uphold the Act under the Commerce Clause would have granted Congress unlimited power to regulate inactivity. The Court rejected such an approach and that is quite significant as a matter of Constitutional Law,” Bloom said.

“In the long run, one shouldn’t underestimate the importance of this holding. The argument that the mandate could be justified as a tax, given that both Congress and the President had gone out of their way for political reasons to characterize it as a penalty rather than a tax, did not seem to have much traction prior to the decision today. Although the Court does tend to construe acts of Congress in such a manner as to uphold them if reasonably possible, it is still surprising that the Court would be willing to construe the Act as a reasonable exercise of the taxing power when Congress deliberately avoided reliance on that power. This is especially so given that Congress quite possibly could not have garnered sufficient political support to enact the law had it been characterized as a tax,” Bloom said.

“It is definitely a compromise decision. The challengers did, in fact, prevail on their most important legal arguments but still failed to strike down the law. In the long run, the Court’s rejection of the Commerce Clause justification will prove to be the most important aspect of the case,” Bloom said.

Roberts’ vote with court ‘liberals’ pushes court
composition under fall election spotlight

SMU political science professor Joseph F. Kobylka, was featured prominently on the PBS documentary, “The Supreme Court.” Kobylka notes that this decision will make the old age of some of the Justices – and the opportunity for the next president to replace them – a hot button topic in the presidential election:

Joe Kobylka“In a decision wrapped in 187 pages of opinions, the Supreme Court upheld the core of the Affordable Care Act. A partially fractionalized majority held that, while not a legitimate exercise of the power to ‘regulate commerce among the states’ or the ‘necessary and proper clause,’ the penalty provision of the Act – the enforcement lynchpin of the ‘individual mandate’ – was a constitutionally permissible exercise of the federal power to tax. The Court also severed and struck down the Act’s expansion of Medicaid on federalism grounds, but left the rest of the Act intact,” Kobylka said.

“Chief Justice Roberts’ opinion is notable not only for the result it reached, but also because it marks the first time in his seven years on the Court that, in an ideologically polarized decision, he voted with the Court’s ‘liberals’ against a solid bloc of ‘conservatives.’ This not only frustrates opponents of the Act, but tosses the issue back into the maelstrom of ordinary politics: electoral politics and legislative action

“However, this decision does not take the Court wholly out of the political limelight: its composition – four of the Justices will be 74 years old or older in November when the people go to the polls to elect a president and members of Congress – will certainly be an issue in the fall campaigns,” Kobylka said.

Ruling will not bring down the cost of health care

Business Economics Professor Michael Davis specializes in the intersection of government and business. He has researched topics ranging from how to measure the value of publicly funded sports facilities to the question of why politicians lie. He appeared on KDFW’s noon news just a few hours after the Supreme Court’s June 28 ruling, explaining that there are so many unknowns in the health care plan that its cost is still a question mark.

Michael DavisWith regard to Medicaid, he said the “states are going to get to experiment now. You won’t have a one size fits all health care plan crammed down on the states."

He said the ruling will not bring down the cost of health care. “Nothing is going to bring down the cost of health care. We’re stuck in a good way because we’re getting older and because we’ve got a lot of new medical technologies now. So medical care is going to get more expensive. What we can hope is that it become more efficient and this law wouldn’t make medical care more efficient. Again, we can hope there is a big debate between now and November and some good things come out of it."


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