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What is unconstitutional about the Affordable Care Act?

To sum it up...
  • Opponents of the Affordable Care Act claimed the individual mandate was an unconstitutional overreach of Congressional power
  • Opponents of the Affordable Care Act claimed that IRS lacked authority to grant subsides in states that refused to establish insurance exchanges
  • The Supreme Court reviewed the power of Congress to require health insurance
  • The Supreme court reviewed the power of Congress to provide tax credit subsidies

The opponents of the Affordable Care Act have attacked the legality of the reform law. Spending hundreds of $millions, these well-financed and coordinated attacks used court proceedings at the state and federal levels to undermine the landmark reforms of the Affordable Care Act.

Acting without regard to the impact on the populations that depend on the universal acceptance and tax subsidies to get badly needed medical care, the opponents have waged an unprecedented level of resistance to national health insurance.

Their claims that the law was unconstitutional as exceeding the powers of Congress and the Executive wound their way to final review by the US Supreme Court.

Read on to learn more about the Affordable Care Act and the Supreme Court, then enter your zip code to compare free health insurance quotes.

The Supreme Court Considered Key Questions

In two major cases, the high Court considered the legality of the Affordable Care Act, its tax credit subsidies, and the Medicaid Expansion in states that refuse to carry out the law. It also reviewed the penalty provisions of the shared responsibility provision.

– NFIB v. Sibellius

adobestock_65694411-1600x1600This case was decided in 2012, and the Court upheld the legality of the Affordable Care Act as an exercise of the Congress’s power to tax. The court decided that the individual mandate was legal but that the form of Medicaid Expansion was too coercive.

The states in effect gained a means of opting out of Medicaid Expansion since the Secretary could no longer withhold funds pending compliance. In effect, the states had a clear way to choose not to participate in Medicaid Expansion even though it meant that its citizens would not get the benefits Congress intended for them.

– King vs Burwell

This case was decided in 2015. The Supreme Court ruled on technical language in Affordable Care Act. The case involved subsidies to citizens in states without exchanges. That Congress should have intended such a radical result is beyond understanding.

There is nothing magical about a state-run exchange versus a federal one that would justify the loss of subsidies for up to eight million Americans.

The opponents did not regard the impact of winning the decision on the people that depended on the law for medical care. The opponents focused on destroying the Act by crippling key provisions.

The Individual Mandate

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At the core of the Affordable Care Act is the requirement to get and keep qualified health insurance. This provision converts private health insurance into a national program of universal coverage. Without the mandate, the law would not effectively create an incentive for universal participation.

Opponents of the law attacked this provision saying that it required individuals to purchase a commercial product against their will. While the mandate is similar to other laws such as auto insurance, the opponents held it out as an illegal reach into an area reserved for individual choice.

State Insurance Exchange

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In King v. Burwell, the plaintiffs seized upon some language in the Act that seemed to suggest that if states did not organize an exchange, then their citizens could not receive tax subsidies through healthcare.gov.

The ACA did encourage states to form exchanges and provided funds both for the exchanges and for the related Medicare Expansion which was decided earlier in the NFIB case.

Subsidies and Marketplace Assistance

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Opponents of the Affordable Care Act focused on the tax credit benefits that helped make the monthly premiums reachable for millions of subscribers. If they could invalidate the tax credits, then it would severely reduce participation in the national insurance program.

Despite the fact that the subsidies were integral to providing regular medical care to millions of citizens, the opponents proceeded to attack the use of premium tax credits. They argued that the law required states to act and create exchanges before its citizens could receive subsidies.

Since states refused to act, then the subsidies were illegal in those states as beyond the powers of IRS and the Executive to implement them.

Other Controversial Provisions

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While not rising to the level of constitutional challenges, there are other persistent issues involving the Affordable Care Act and its impact on the economy. The below-listed items describe some of those issues.

– Cadillac Tax

Obamacare Cadillac tax was a 40 percent excise tax on benefits that exceeded the limit for individuals and families. These high-end plans created potential shortages of health services and put upward price pressures on the medical services market.

The controversy arose from union leadership because organized labor had used these generous plans to reward members and encourage new membership.

Just as employers have used health benefits to attract top talent, labor organizations used generous plans to add value to union membership and benefit unionized employees.

The interference with labor organizations was an unintended side effect of reducing overly-generous plans.

– Medical Devices Tax

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This is a levy on revenues that flow through the manufacturing sector for specialized medical equipment. This sector benefits from the Affordable Care Act, Medicaid, and Medicare as these programs pay for large amounts of consumer usage of medical devices.

The controversy revolves around the impact of the law on the industry. There is a strong view that the law could hurt the industry far more than the benefits of the extra taxation help government health services.

– Out-of-Pocket Limits

Out-of-pocket expenses contained in the Affordable Care Act offered some relief from boundless expenses. The law and its rules limit the amounts subscribers can pay in any single annual cycle. The problem came with the realization that the scope of the spending ceiling was limited to network services.

The out-of-pocket expenses incurred outside of the subscriber’s plan network would not count towards the limit. It was still possible to accrue a mountain of debt while using qualified health plans

Supreme Court Reviews Support the ACA

Despite the public furor, the Supreme Court has not weakened the Affordable Care Act. To the contrary, in the major rulings, the court upheld key provisions against efforts to undermine the law and limit its scope. The Court’s actions upheld the Individual Mandate and

The Court’s actions upheld the Individual Mandate and Medicaid Expansion but limited the power of the Secretary to withhold funds. They also upheld the validity of tax subsidies in states that refused to operate their own exchanges.

The Affordable Care Act is not Unconstitutional

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After years of effort and spending vast amounts of funds, the opponents of the Affordable care Act did not succeed in judicial nullification of the law. The courts have consistently endorsed the powers of Congress and the Executive to create and carry out a national health insurance program.

The law is hardly perfect, and like most major social legislation, it needs repairs. Like Social Security and Medicare before it, the Congress can correct the perceived flaws.

Comparison shopping is the proven method for finding the best fit and value in Obamacare health insurance plans. Comparison shopping cuts across the metal tiers and management styles to focus on features of greatest importance to the consumer.

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