Understanding Obamacare Part 4: The Supreme Court Ruling and Other Legal Challenges

When I set out to write a weekly column on Obamacare, I could not have imagined what a daunting task was before me.  I thought it would be simple enough to read the entire bill and then break it down, section by section, and explain it so that we could all better understand how the new healthcare legislation will ultimately affect everyone.  Small business owners, health care providers, seniors, patients with chronic illnesses…everyone has a vested interest.  I planned to leave the politics out of it, to the best extent possible, and just focus on the facts.  However when I interviewed doctors and small business owners, I found that people are so passionate about this issue and have so much to say, that the politics always made its way back into the discussion.  Still, I will do my best to present facts only.  Texas PolitiChick Lara Maertans Rhea

In case you are confused about the Supreme Court’s ruling on Obamacare or maybe just unsure of what all the fuss was about, I thought I would try to explain it in layman’s terms and also fill you in on other legal challenges the healthcare bill still faces.

In a landmark decision by a 5-4 margin, the Supreme Court ruled back in June of this year that the health care law is constitutional.  The main reason it was challenged was those “mandates” I discussed in previous articles.  Remember, the mandates require that all Americans purchase health insurance or pay a penalty to the government.  These mandates apply to individuals, as well as, to businesses. Individuals will pay fines up to $695 a year (starting in 2017 this will rise each year with inflation), the fines triple for families and include children, and businesses will pay a minimum of $2,000 per person for not providing healthcare coverage, as well.

Just a side note, if workers are not employed over 30 hours per week, companies will not be forced to provide coverage or pay the fines….hmmm….do you think a lot of people will go from full-time to part-time work soon?  Anyway…

When the healthcare law was first enacted, 26 states and many individuals immediately sued on the grounds that it was a violation of the Constitution’s Commerce Clause, essentially disputing the federal government’s jurisdiction over intrastate and interstate commerce as it relates to purchasing healthcare and the penalties imposed.  The Supreme Court ruled in June of 2012 that the mandate is not a “penalty” as the health care law had defined it; but rather, the Court interpreted it as a tax instead.  It is important to realize that the health care law specifically spelled it out as a penalty, not a tax.  Even Obama himself said it was not a tax.

On September 20, 2009, President Obama met with George Stephanopoulos for an interview on ABC.  Mr. Stephanopoulos said, “…Your critics say it (the healthcare bill) is a tax increase” after going around and around with the president about this issue for a while.  President Obama responded, “My critics say everything is a tax increase.  My critics say that I’m taking over every sector of the economy.  You know that.  Look, we can have a legitimate debate about whether or not we’re going to have an individual mandate or not, but…”

Mr. Stephanopoulos replied, “But you reject that it’s a tax increase?”

President Obama defiantly stated, “I absolutely reject that notion!”

Then of course the Democrats stood behind that claim knowing they would never get the legislation passed if they called it a tax.  So here we had the heads of government adamantly denying it is a tax, but then the Supreme Court came along after the fact and interpreted the law differently, ruling that the mandates ARE in fact taxes, and therefore, constitutional!  This confused a lot of people.  Don’t worry if you still don’t fully understand it.  I have read hundreds of documents explaining the ruling, and I still have a hard time regurgitating it.

So the healthcare law didn’t identify the penalty as a tax, the Supreme Court came up with that on its own accord.  And with that, the Court found that is is not unlawful for the Federal Government to force people (individuals, families, businesses) to purchase health insurance or pay a steep fine.

So you might be wondering, besides the 26 states that sued the federal government, what other lawsuits were filed, and what is happening with those cases now?

The Liberty Counsel, representing Reverend Jerry Falwell’s Liberty University, is one group that sued focusing on the individual mandate and the mandates that the employers purchase insurance for their employees or face steep penalties.  The group claimed that the act violates freedom of religion because “it collides with the free exercise of religion, both under the individual mandate and the employer mandate, because of the forced funding of abortion that applies to both.”  If given permission to re-challenge the law, the case will return to the Fourth Circuit of Appeals soon.

Judge Andrew Napolitano recently said he believes if this happens, there will be a different outcome in the entire case.  Namely, the reason is because the Supreme Court sided with many things the plaintiff’s argued against in the healthcare legislation, and they also never ruled on parts of the case.  So it might be back to the drawing board again soon.

Many other groups are challenging the healthcare law, as well.  Because Obamacare requires employers to provide free birth control in their healthcare programs, many religious institutions are upset.  The University of Notre Dame filed a lawsuit back in May, accusing the federal government of forcing them to support contraception in violation of their religious beliefs or face fines.  Dozens of other institutions are following in their footsteps.

Just this week, Texas Baptist University and Houston Baptist University filed the 32nd legal challenge to the bill in the U.S. District Court for the Southern District of Texas.  The lawsuit says, “Having to pay a fine to the taxing authorities for the privilege of practicing one’s religion or controlling one’s own speech is un-American, unprecedented and flagrantly unconstitutional.”

Groups like the Goldwater Institute have filed lawsuits accusing Congress of violating the separation of powers to an unelected executive agency- the Independent Payment Advisory Board created by Congress- that can operate without any oversight and set policy and payment rates.  Governor Sarah Palin has called this a “death panel.”  This case is on hold before an Arizona Federal Court.

One of the provisions of the healthcare law limits physician-owned hospitals from starting or expanding, so Physician Hospitals of America sued in 2010.  The law prevented 100 new hospitals from opening and halted $4 billion in construction.  The case is currently before the U.S 5th Circuit Court of Appeals.

Michael Cannon of the Cato Institute says to expect more lawsuits.  Under the new law, individuals can shop for health insurance through government-created exchanges.  If a state refuses to set up an exchange, the law allows the federal government to set one up instead.  But individuals are only eligible for a tax credit if they buy insurance through a state exchange.  In order to try to fix this problem, the IRS issued a new rule stating that people who buy insurance through the federal exchange would receive a tax credit.  Michael Cannon says that the IRS had no authority to rewrite the law and overstepped its bounds, so there will surely be lawsuits forthcoming because of this.

Of course with the upcoming election, the healthcare law will face challenges by Republicans and Democrats alike.  Lest you believe that the Supreme Court ruling in June of 2012 was the final say on the bill’s fate, just stay tuned.  It’s going to get very interesting….

Understanding Obamacare Part 1

Understanding Obamacare Part 2

Understanding Obamacare Part 3


Lara Rhea

Lara Rhea has always had a passion for God and her family. She is the former Ms. Texas and Ms. Conservative United States (2012-2013). She is a political writer, blogger, and reporter living in Austin, Texas, and her passions are politics and healthcare. Among her many endeavors, Lara is also currently a graduate student in clinical mental health counseling and planning to become a licensed therapist. She is interested in mental health issues, but because of heart conditions which require her to have a pacemaker and defibrillator, she also has a vested interest in physical health and well-being. She is training for a half-marathon in support of the American Heart Association to show that those living with health challenges can still live a great quality of life. Her interest in politics began many years ago while working on a congressional campaign as a speech writer and campaign manager. With undergraduate degrees in English, Psychology, and Business, along with her passion for politics, she is able to write about various topics but typically focuses on Obamacare issues. Lara had a near-death experience when her heart stopped and sees things through the lens of a person who realizes there is a great purpose to life. She is currently writing a book about how the American health care system is under siege and would like to write about her spiritual journey as a heart patient, as well. After she graduates, Lara would like to advocate for mental health patients on legislative issues and bring awareness to the public about all healthcare related issues.

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