Supreme Court rejects GOP challenge to Obamacare in 7-2 ruling

Washington — The Supreme Court on Thursday tossed out a closely watched legal battle targeting the Affordable Care Act, rescuing the landmark health care law from the latest efforts by Republican-led states to dismantle it.

The court ruled 7-2 that the red states and two individuals who brought the dispute do not have the legal standing to challenge the constitutionality of the law’s individual mandate to buy health insurance and ordered the case to be dismissed. Justices Samuel Alito and Neil Gorsuch dissented. Justice Stephen Breyer delivered the majority opinion for the court.

The Supreme Court did not address the constitutionality of Obamacare’s individual mandate or whether it can be separated from the remainder of the law, the other two issues raised by the states.

“We do not reach these questions of the Act’s validity, however, for Texas and the other plaintiffs in this suit lack the standing necessary to raise them,” Breyer wrote.

The states, the Supreme Court said, failed to show that the individual mandate, “without any prospect of penalty, will harm them by leading more individuals to enroll in these programs.”

The ruling from the Supreme Court is a major victory for President Biden and Democrats, who have fought to shield the Affordable Care Act from numerous attempts by Republicans to kill it both through legislation and in the courts. Mr. Biden, who was vice president when Obamacare was enacted, has vowed to expand the health care law during his presidency.

The Trump administration backed a coalition of 18 red states who sought to topple the law by targeting the individual mandate, which they argued was intertwined with Obamacare and therefore could not be excised from it. But in February the new Biden administration informed the Supreme Court the government reversed its position in the case and believed the mandate to be constitutional. 

Arguments in the case took place remotely in November, a week after the presidential election and in the midst of the ongoing coronavirus pandemic, which left the Supreme Court’s doors closed to the public. The battle marked the third legal challenge to the landmark law, which extended health insurance coverage to millions of Americans and provides protection to people with preexisting conditions.

This latest dispute challenged the constitutionality of Obamacare’s individual mandate, which, as passed, required Americans to obtain health insurance coverage or pay a fine if they failed to do so. But Congress did away with the financial penalty as part of its tax-reform package in 2017. 

A group of Republican-led states then filed a lawsuit arguing that because the fine was $0, the mandate was unconstitutional because the change from Congress “made it impossible to fairly interpret” the provision as a tax, as it was construed in a 2012 legal challenge to Obamacare. In that case, Chief Justice John Roberts joined with the court’s liberal wing to uphold the individual mandate.

The red states also argued that if the mandate was deemed unconstitutional, the rest of the law should fall.

But a group of 20 states and the District of Columbia, joined by the Democrat-led House of Representatives, argued Congress’s change to the law “modified the terms of the choice presented by [the mandate] — by allowing individuals to freely decide whether to buy health insurance without facing any tax assessment if they do not.”

After the Republicans mounted their legal battle in 2018, a federal district judge in Texas struck down the full law as unconstitutional. Then, in December 2019, a three-judge panel on the 5th U.S. Circuit Court of Appeals ruled the mandate was unconstitutional, but sent the case back to the lower court to determine whether the rest of Obamacare could stand without it.

Democrats were concerned the Supreme Court’s ideological makeup — there is a 6-3 conservative majority — did not bode well for Obamacare’s prospects. But during arguments, Roberts and Justice Brett Kavanaugh, appointed by former President Donald Trump, signaled they disagreed with the GOP-led states and believed the mandate could be separated from the rest of the law.