A Note on the United States Supreme Court’s Obamacare Ruling: What Does It Mean for American Citizens?

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On June 28, 2012, the United States Supreme Court sent a shock wave through the nation with its opinion in National Federation of Independent Business v. Sebelius, upholding critical parts of President Obama’s major health care reform, the Patient Protection and Affordable Care Act (“Obamacare”).   Since Obamacare’s passage in Congress, the nation has been sharply divided on the issues of who should determine who has health insurance and who should pay for it.  Democrats have rejoiced and Republicans have vowed to repeal it.  In fact, House Republicans have voted at least 30 times to either repeal Obamacare or break it down in some way.  There is no doubt Obamacare is a major point of discussion in the upcoming election and could even decide who will lead this country for the next four years.

Why so much ado about Obamacare?  Obamacare’s provision that carries the most weight requires most Americans to obtain and keep minimum health insurance.  While this provision may seem like a great idea to some, others see this mandate as an encroachment on states’ rights as well as the free will of Americans.  Until Obamacare’s passage, Americans had never faced federally mandated health care insurance.  Another major provision of Obamacare is non-exempt individuals who fail to maintain minimum health insurance will face a tax that will be paid to the Internal Revenue Service.  Needless to say, this tax has not been well-received by American citizens, with many calling it a “penalty.”  Taxation has been an inciting topic since before the inception of the Union and will undoubtedly remain that way as long as this great nation remains in existence.  Also, Obamacare expands Medicaid programs by making more individuals eligible for coverage.  States who do not comply with the Medicaid expansion requirements could lose federal Medicaid funding, which could greatly impact the states’ economies as well as citizens’ quality of life.

In response to Congress’s passage of Obamacare, many citizens, states, and a Federation brought suit primarily in opposition to the health insurance requirement and the new Medicaid requirements.  The United States Supreme Court, in a 5-4 decision, upheld the individual mandate provision of Obamacare.  However, the Court did so without the help of the Commerce Clause.  A little thing called the federal government’s taxation prerogative saved the day for Obamacare.  The Court held that the fee imposed on those who fail to comply with the individual health insurance mandate is a tax and not a penalty.  Ultimately, because Congress has the power to tax and individuals still have the choice of whether to purchase health insurance or not, the Court declined to strike down the individual mandate.

Although Obamacare’s individual health insurance mandate survived the Court’s scrutiny, its Medicaid expansion penalty was not so lucky.  Using vivid imagery, Chief Justice Roberts opined that Obamacare’s threat to cease all Medicaid funding to those states that failed to implement its Medicaid expansion mandate is far from “mild encouragement.”  Due to its coercive nature, essentially leaving the states with no choice on whether to comply with the mandate, the Court agreed with the states that Congress had overstepped its “spending clause” powers.

In a nutshell, Congress can tax individuals who fail to purchase health insurance, but may not take away the Medicaid funding of those states that fail to comply with Obamacare’s Medicaid expansion.  It is also important to note that the Court did not strike down Congress’ Medicaid expansion mandate per se.  Congress may still court state support for the Medicaid expansion by offering various incentives.  The ball lies in the states’ hands.

Perhaps the most surprising part of the opinion was its author: Chief Justice John Roberts.  Nobody expected Chief Justice Roberts to deliver the swing vote, let alone write an opinion very favorable to Obamacare.  Not only is Chief Justice Roberts conservative, but he also does not hide his conservatism when writing opinions and casting his votes in cases.  For his role in the Obamacare ruling, Chief Justice Roberts has been heralded as many things, most notably a “mastermind.”  However, truth be told, Chief Justice Roberts did not stray from his conservative roots.  He simply did his job by interpreting Obamacare in light of the United States Constitution – by finding one part constitutional and another unconstitutional.  In the future, all eyes will be on Chief Justice Roberts to see whether he goes rogue or stays in line.

Now that the most controversial portion of Obamacare has survived a date with the United States Supreme Court, the focus has shifted to its potential economic consequences.  Some predict this ruling will drastically increase the federal deficit while others predict that it will have the opposite effect by decreasing federal health care spending.  The only true test of Obamacare’s economic impact is time.  This issue will continue to divide the political parties at least until concrete facts and data are published.  Even then, with the tension between liberals and conservatives at an all-time high, even data may not suffice.

Around 50 million Americans are currently without health insurance, many of whom are children.  However, the number of Americans who will buy into the Obamacare tax threat and purchase insurance is far from set in stone.  After all, the “tax” may actually be less expensive than paying an insurance premium even for a “non-smoking, 30 year old female in the Raleigh area.”  Although betting on health care is the issue Obamacare ultimately aims to prevent, it is actually a risk that it may serve to further.  As it now stands, in 2014 when Obamacare takes effect, uninsured Americans will face a decision that is no doubt as important as their decisions of who to elect in the 2012 presidential election.

After the Court’s opinion, the only option for those opposed to Obamacare is to repeal it.  There is no doubt that House Republicans have fervently pursued this option and will definitely continue to do so in the future.  With former Massachusetts governor and current Republican Presidential Nominee Mitt Romney vowing to repeal Obamacare on his first day in office should he be elected, the threat to Obamacare is real, even if a bit exaggerated.  Obamacare may have carried the day on June 28, 2012, but the war on health care insurance rages on.


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About Dorothy Gooding, Former Staff Writer (2 Articles)
Dorothy graduated from Campbell Law School in 2013, and from the University of North Carolina at Chapel Hill in 2007 with a Bachelor of Arts in Sociology. In addition to the Campbell Law Observer, Dorothy served as Chief Submissions Editor for the Campbell Law Review and as Co-Director for the Campbell Law Peer Mentors. Dorothy’s legal experience includes internships with Progress Energy, Clawson & Staubes, LLC, The Chambers of the Honorable Justice Paul M. Newby, and the U.S. Attorney’s Office for the Eastern District of North Carolina. A small-town girl at heart, Dorothy spends many weekends in her hometown of Kinston, NC.
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