Constitutional challenges to the Affordable Care Act
The Affordable Care Act (ACA), also known as Obamacare, has faced significant constitutional challenges since its passage in 2010. The ACA was designed to expand health insurance coverage and regulate the health insurance industry, notably through provisions like the individual mandate, which required all Americans to obtain health insurance or pay a penalty. Critics argued that this mandate overstepped Congress's constitutional authority to regulate commerce, leading to several major Supreme Court cases that examined the law's constitutionality.
The first notable case, NFIB v. Sebelius in 2012, resulted in a ruling that upheld the individual mandate as constitutional by interpreting the penalty as a tax. Subsequent challenges continued, particularly around issues of federal subsidies for health insurance purchased through federal exchanges. In King v. Burwell (2015), the Supreme Court affirmed that these subsidies were permissible, based on ambiguous language in the ACA.
After the individual mandate penalty was effectively eliminated in 2017, several states sued, claiming the ACA was unconstitutional without it. The case, California v. Texas, reached the Supreme Court but was ultimately dismissed in 2021, with the Court ruling that the plaintiffs lacked standing to challenge the mandate. These legal battles reflect ongoing tensions in U.S. healthcare policy and the political landscape surrounding health insurance reform.
Constitutional challenges to the Affordable Care Act
After its initial passage in 2010 and its full enactment in 2014, the Affordable Care Act (ACA)—informally known as Obamacare—was subject to repeated legal challenges in regard to its constitutionality. A landmark piece of legislation aimed at ensuring that all Americans have access to affordable health insurance, the ACA was attacked by critics who argued that it went too far, perhaps even to the extent of being unconstitutional. On several occasions, the Supreme Court heard arguments on the act’s constitutionality and ultimately ruled in its favor. Many of the challenges the ACA faced were focused on a part of the law called the individual mandate, which required all Americans to purchase health insurance or face a fine. While none of the initial constitutional challenges to the ACA proved successful, the law remained a major point of political contention.
Background
Officially signed into law by President Barack Obama on March 23, 2010, as the Patient Protection and Affordable Care Act, the ACA was a far-reaching law that introduced numerous healthcare reforms intended to make health insurance affordable for all Americans. Functionally, the act did this by reducing or removing many of the barriers that made it difficult for many people to access health insurance and healthcare. To this end, the ACA included provisions that established new rules governing how healthcare plans work, how employers provide health insurance, and how individuals get and maintain health insurance coverage.
The ACA restricted insurers’ ability to make it difficult for certain people to get healthcare coverage. Among other things, it prevented individual and small group health plans from denying coverage due to pre-existing conditions, rescinding coverage in most cases, charging higher premiums to those with certain health problems, charging older enrollees more than younger enrollees, and offering plans that do not adequately provide coverage for essential health benefits. The ACA also required non-grandfathered healthcare plans to cover preventative care without cost-sharing, cap out-of-pocket costs for in-network essential health benefits, and allow young people to stay on their parent's health plan until age twenty-six. In addition, the ACA required large employers to provide their full-time employees with affordable, minimum-value health insurance or face possible penalties. Finally, the ACA included a key provision called the individual mandate. The individual mandate required all Americans to have healthcare coverage, whether they got it through their employer or purchased it themselves through the ACA or some other source. The mandate also required anyone who did not get healthcare coverage to pay tax penalties.
From the outset, the ACA had benefits and drawbacks. On the positive side, the act made health insurance more affordable, allowed many more Americans to get health insurance, and made it much easier for people with pre-existing conditions to get healthcare coverage. It also removed time limits on care, expanded coverage of screenings and preventative care, and lowered prescription drug costs. On the negative side, it meant some people had to pay higher premiums, increased taxes, and initially entailed fines for the uninsured.
Overview
The ACA had been heavily opposed by Republicans in Congress, and there were several unsuccessful legislative attempts to repeal it. Other opposition was channeled into the judicial system, as critics of the law questioned the constitutionality of some of its mandates. As these legal challenges played out, the battle over the ACA led to three major Supreme Court decisions. These cases include National Federation of Independent Business (NFIB) v. Sebelius, King v. Burwell, and California v. Texas.
Most of the legal challenges raised in opposition to the ACA were focused on the controversial individual mandate. This was true of NFIB v. Sebelius, a 2012 case that was the first brought against the ACA to reach the Supreme Court. In NFIB v. Sebelius, the challengers argued that the individual mandate was unconstitutional because Congress did not have the authority to require American citizens to take part in commerce. Describing the individual mandate as an attempt to force Americans into participating in commerce by requiring them to buy health insurance, the challengers argued that Congress illegally overstepped its constitutional powers. Because the majority of the court agreed with this interpretation, its final decision on the matter depended on whether the individual mandate could be seen as a tax and not just a command to purchase health insurance. On close inspection, it was apparent that the individual mandate could be viewed as a tax of sorts because it clearly raised money for the government. As a result, the Supreme Court ultimately ruled in a 5–4 decision that the individual mandate was constitutional.
Another major constitutional challenge of the ACA got underway in 2014 when the Court of Appeals for the District of Columbia ruled that the government did not have the authority to subsidize individual health insurance plans purchased on the federal exchange. The court’s decision was based on its opinion the part of the ACA that set forth the size of these subsidies only mentioned exchanges that were “established by the state.” Since many of those who purchased health insurance through the federal exchange would likely have been unable to afford that insurance without the subsidies in question, the decision made by the appeals court might have caused millions of people to lose their healthcare coverage if the Supreme Court opted to uphold it. A short time later, the Court of Appeals for the Fourth Circuit reached the opposite decision in King v. Burwell, a case wherein the subsidies were deemed permissible because the language in the relevant portion of the ACA was ambiguous. The Supreme Court eventually sided with the Fourth Circuit when it decided the case in a 6–3 ruling in June 2015.
In 2017, the Republican Party undertook another legislative campaign to repeal and replace the ACA. While this effort ultimately proved unsuccessful, a measure included in that year’s Tax Cuts and Jobs Act effectively eliminated the individual mandate by lowering the penalty for not having health insurance to $0. Nevertheless, Republicans remained intent on challenging the constitutionality of the ACA. In February 2018, a group of twenty Republican-controlled states led by Texas filed a lawsuit claiming the ACA was unconstitutional without the individual mandate penalty. A group of Democrat-controlled states led by California subsequently intervened in defense of the ACA. The case, California v. Texas, was first heard by a federal judge in Texas who eventually ruled the ACA unconstitutional. The case was later appealed and was heard by the Supreme Court in 2020. In June 2021, a 7–2 decision was reached that Texas et al. did not have legal standing to challenge the individual mandate, as they showed no personal injury in the case.
In an effort to stimulate the American economy in 2021 during the COVID-19 pandemic, the Senate passed the American Rescue Plan Act (ARPA), which included temporary subsidies for individuals buying their health coverage on the Affordable Care Act Marketplace in 2021 and 2022. However, as part of the Inflation Reduction Act in 2022, the Senate extended this availability through 2025, which avoided a cost increase for about 13 million Americans.
In the class-action lawsuit Braidwood Management Inc. v. Becerra, business owners in Texas argued that requiring companies to pay for certain preventative services was unconstitutional, violating the Appointments Clause, the non-delegation doctrine, and the Religious Freedom Restoration Act. Specifically, covering preexposure prophylaxis (PrEP), medication scientifically proven to prevent the spread of HIV. Texas Judge Reed O’Connor ruled in the business owner’s favor in 2020, and the Fifth Circuit Court of Appeals upheld his decision in June 2024. However, the appeals court did not issue a nationwide injunction for the mandate, allowing the requirement guidelines to stay in place.
Before the Affordable Care Act, between 14 and 16 percent of individuals living in America were uninsured, but by 2023, the rate had decreased to 7.7 percent. By 2024, one in seven Americans, or fifty million, received coverage through the Affordable Care Act marketplaces.
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