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Could SCOTUS Strike Down Obamacare?

Stethoscope wrapped around hundred dollar bills
By Andrew Leonatti on September 28, 2020 11:20 AM

The death of Supreme Court Justice Ruth Bader Ginsburg has inspired a legion of think pieces about the long-term effects of a sharp shift to the right in the court's ideological alignment.

But very shortly, Ginsburg's death could have a large effect on the Affordable Care Act (ACA), more commonly known as Obamacare. After upholding the law in 2012, the high court will again scrutinize the law, with arguments scheduled to occur the week after the election. A ruling against the law could endanger protections for people who used to have trouble buying health insurance because of preexisting health conditions.

Understanding the Individual Mandate

The ACA contains a provision known as the "individual mandate" that requires most Americans to have health care insurance. With some exceptions, if you do not have health care insurance through your job, and you are not on Medicare or Medicaid, that means you likely purchase health insurance through a state-based or the federal exchange.

Under the ACA, those who do not have health insurance must pay a penalty. Except, as part of the tax cut law passed by Congressional Republicans in 2017, there is no longer a financial penalty for violating the individual mandate.

California v. Texas

In 2012's NFIB v. Sebelius ruling upholding the ACA, the court ruled that the individual mandate was constitutional under Congress's taxing power. Basically, you either acquire health insurance or pay a tax.

Now, in California v. Texas, a group of Republican state attorneys general is arguing that by having no penalty for failing to comply with the individual mandate, the ACA as a whole is no longer constitutional because the mandate is essential to the law.

The 5th Circuit Court of Appeals upheld a lower court ruling that the individual mandate is no longer constitutional, but sent the case back to a district court to work out the question of "severing" the mandate question from upholding the rest of the ACA.

The Trump administration joined the plaintiffs in seeking to overturn the law. The ACA is now being defended by a group of Democratic state attorneys general, who petitioned the Supreme Court to take up the matter rather than dragging out the case for years, bringing us to where we are today.

What Is at Stake?

The court could go many different ways with this latest challenge to the ACA. They could choose to rebut the argument that the individual mandate is unconstitutional and uphold the law.

The justices could also rule that the mandate is unconstitutional and strike it from the law while leaving the ACA in place. Because there already is no penalty for non-compliance, that ruling also would not change much.

Or, the court could decide that the individual mandate is so crucial to the ACA as a whole that by striking down the mandate, they also have to strike down the entire law. That could endanger the health insurance coverage of at least 20 million people who purchase insurance through the exchanges or through the ACA's expansion of Medicaid coverage. It would also eliminate other provisions of the law, including:

  • Banning insurance companies from denying coverage or making coverage much more expensive for people with preexisting health conditions (which could include a COVID-19 diagnosis in the future)
  • Allowing children to stay on their parents' health insurance until turning 26
  • Access to birth control with no out-of-pocket costs
  • Required coverage for childbirth and preventive procedures like mammograms and physicals

In short, it could be quite chaotic for everyday Americans, doctors, and insurance companies.

The Ginsburg Effect?

Ginsburg's death leaves the court with eight justices. If a new justice is not seated by the time arguments take place, it is unlikely that a new judge would take part in the final ruling.

A 4-4 tie would uphold the 5th Circuit ruling that the individual mandate is unconstitutional. However, that would only affect states under the 5th Circuit's jurisdiction (Texas, Louisiana, and Mississippi).

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