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The Supreme Court Takes on the Widely Challenged PPACA

By Tanya Falleiro – January 18, 2012

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. Congress drafted PPACA with the goals of reducing the number of uninsured Americans and lowering the increasing costs of health care. This act reforms portions of the private-health-insurance industry and public-health-insurance programs.

Since it was signed into law, the act has been extensively contested throughout the United States. Many states, organizations, and even individuals have filed a variety of actions challenging the constitutionality of PPACA. Federal appellate courts and district courts are divided on the constitutional issues advanced during this litigation.

During 2011, six certiorari petitions (which were written, respectively, by the Obama administration, the National Federation of Independent Business, the state of Virginia, a coalition of 26 states, Liberty University, and the Thomas More Law Center) were filed before the U.S. Supreme Court. While various provisions of the act are at issue, each petition focuses on the pivotal issue of whether Congress violated the Constitution by requiring virtually all Americans to purchase health insurance, a provision referred to as the “individual mandate.”

The individual mandate requires that all individuals maintain “minimum essential coverage” by January 1, 2014, or be subject to a penalty, which is enforced through individual tax returns. An exception to the individual mandate will be provided to those with religious objections, who are incarcerated, who are “not a citizen or national of the United States or an alien lawfully present in the United States,” and who are unable to afford the coverage due to severe financial hardship.

Those challenging the individual mandate argue that imposing a penalty on individuals who do not purchase health insurance does not fall within the constitutional boundaries of Congress’s taxing powers. They argue that Congress has exceeded its enumerated powers and violated basic constitutional principles.

Because health-care regulation falls under non-economic activity, regulation under the Commerce Clause only will be possible through the Necessary and Proper Clause. To execute this, Congress must ensure that the means adopted are “appropriate,” “plainly adapted to that end,” “not prohibited,” and “consistent with the letter and spirit of the Constitution.” The Supreme Court likely will have to decide whether requiring practically all American adults to obtain health insurance by 2014 is within Congress’s power.

If the individual mandate is nullified on the grounds of being unconstitutional, the Court also must decide whether PPACA in its entirety should be struck down or if other provisions may be able to survive without it. This is known as the “severability” issue. The Obama administration believes that provisions of the act could not survive without the individual mandate, specifically the “guaranteed-issue provision” (prohibiting health insurance companies from refusing coverage based on an individual’s preexisting medical condition) and the “community-rating provision” (requiring health-insurance providers to offer policies within a given territory to all individuals at the same price, irrespective of each individual’s prior medical history). The court may be faced with determining whether the individual mandate is vital enough to PPACA that the act cannot operate without it.

Other issues that are discussed in the petitions include the following: Virginia’s rights as a sovereign state (PPACA’s individual mandate against Virginia’s newly enacted law, which states that Virginians are not required to buy health insurance); Medicaid expansion as being unconstitutional commandeering of the states (PPACA requires states to expand or forgo their Medicaid program); the employer mandate as an intrusion in the private relationship between employers and employees (PPACA requires businesses with over 50 full-time employees to provide health-care coverage or face a penalty), and the Anti-Injunction Act (AIA, which requires individuals to pay a tax before the tax can be challenged in court; is the penalty from the individual mandate really a penalty or is it an actual tax?).

In mid-November, the Supreme Court granted certiorari announcing that it will hear five-and-a-half hours of argument in March 2012 on the individual mandate and three other related provisions. In addition to the individual mandate, the high court will hear argument as to whether it can uphold the law as a whole if it strikes down the individual mandate as well as with respect to whether a decision on the law should be delayed until after 2015 when one of the law’s many deferred provisions takes effect. The Court will also look at the propriety of the expansion of the joint federal-state Medicaid program.

For more information, see the following:

• Pub.L. No. 111-148

National Federation of Independent Business, et al., v. Kathleen Sebelius, Secretary of Health and Human Services, et al.

Department of Health and Human Services, et al., v. Florida, et al.

Florida, et al., v. Department of Health and Human Services, et al.

Virginia, ex rel. Kenneth T. Cuccinelli, II, Attorney General of Virginia v. Kathleen Sebelius, Secretary of Health and Human Services

Thomas More Law Center, et al., v. Barack H. Obama, President of the United States, et al.

Liberty University, et al., v. Timothy f. Geithner, Secretary of the Treasury, et al.

Tanya Falleiro is a 3L at Golden Gate University School of Law in San Francisco.

Keywords: young lawyer, PPACA, Commerce Clause, Necessary and Proper Clause, Medicaid, AIA

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