The Obamacare Showdown — Preview, Part I

On Monday, Tuesday, and Wednesday of next week (March 26-28), the Supreme Court will hear arguments on the Affordable Care Act (ACA), or as we like to call it, Obamacare. This is one of the most momentous showdowns in Supreme Court history – the Court’s decision will be a major landmark in determining the scope of federal power. To get the conversation rolling, I’m offering a series of thumbnail previews of the issues to be argued. 

Monday’s session will concern a potentially significant issue that hasn’t received a lot of press: whether the legal challenges to ACA’s individual mandate* are premature under the Anti-Injunction Act. The Anti-injunction Act is a law going back to the nineteenth century that bars lawsuits challenging a federal tax provision if that provision has not actually gone into effect. The “tax” in question is the financial penalty exacted on those citizens who fail to buy a federally-approved health insurance policy. The Obama administration has never quite decided whether the penalty is a tax: sometimes it is, and sometimes it isn’t. Oh well, the fact is that the drafters of ACA decided to write the penalty provisions into the tax code, so there is at least an argument that it is a tax. 

Oddly enough, none of the parties at the Supreme Court next week are claiming that the lawsuits are barred by the Anti-Injunction Act; not even the Obama administration which evidently, doesn’t want to start the week off by labeling the mandate as a “tax.” But by Tuesday, the administration will have changed course and will be insisting that the mandate is a tax, in order to justify it under the “General Welfare” clause (more about that in a later post). 

In an earlier ACA decision, the Fourth Circuit concluded that the Anti-Injunction Act applies — and DC appellate judge Brett Kavanaugh came to the same conclusion in a concurring opinion on ACA — and so the Supreme Court justices decided that they would have to address the issue for the sake of completeness. If the High Court rules that the Anti-Injunction Act applies, then all legal challenges to the individual mandate will have to be postponed until 2014, when the mandate and its penalty provision actually kick in. This would be bad news indeed … unless of course we get a new president in January 2013, and that president gets to replace one or two liberal justices.

*i.e., the obligation of every citizen to obtain health insurance.