Lawsuits were filed in Indiana ( Indiana v. IRS ), Oklahoma ( Pruitt v.
Justices Antonin Scalia, Clarence Thomas, and Samuel Alito dissented. In the opinion, the Court applied a two-part test in interpreting the Affordable Care Act: "we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable.".
Pursuant to the U.S. Supreme Court's 2014 decision in Burwell v. Hobby Lobby, religious organizations and closely-held for-profit companies became eligible for an exemption from the Affordable Care Act's contraception mandate. Under the exemption, organizations could notify the government of their religious objections to contraception, which would then make an arrangement with the insurance company to provide contraceptive coverage to the employees. However, some religious organizations objected to the accommodation, arguing that they would still be complicit in providing contraception to their employees.
On May 21, 2012, 43 different Catholic organizations filed 12 lawsuits against the Department of Health and Human Services , including Zubik v.
Pruitt stated that because Oklahoma amended its constitution to prevent citizens from being forced to obtain health insurance, the state had good reasons for filing independently. In a press release stating his intention to sue, Pruitt commented on his decision to file within the state, saying, "The most logical way to defend our state Constitution is in an Oklahoma federal court not in another state." The case was then filed as Oklahoma v. Sebelius on January 21, 2011.
States objected to the tax because individuals who received tax credits could trigger tax penalties for their employers. Furthermore, the availability of tax credits made it harder for individuals to opt out of purchasing insurance on the basis of hardship. In order to shelter their residents from these penalties, many states opted not to establish exchanges at all—at the time of the lawsuits, only 16 states and the District of Columbia had exchanges.
In February of 2014, the Seventh Circuit Court of Appeals upheld a lower court ruling against the University of Notre Dame in University of Notre Dame v. Burwell. In March of 2015, the U.S. Supreme Court ordered the Seventh Circuit to reconsider the case in light of the court's holding in Burwell v. Hobby Lobby (2014). While the case was pending a rehearing, on May 20, 2015, the Seventh Circuit denied Notre Dame's petition for injunctive relief. The circuit court's denial of Notre Dame's petition meant that the university would have to comply with the law while awaiting the Seventh Circuit's final decision.
This lawsuit, filed on the same day the ACA was signed into law, alleged that the individual mandate and the required state Medicaid expansion were unconstitutional. By the time the suit reached the United States Supreme Court, the plaintiffs had grown to include 26 state attorneys general. The Court ultimately ruled to uphold the constitutionality of the individual mandate as falling within Congress’ authority to levy taxes and struck down the Medicaid expansion as being unduly coercive in light of the withholding of funding that would result from noncompliance.
Attorneys general from Alabama, Colorado, Florida, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, and Washington, 11 of whom signed the December letter, filed suit against the ACA the same day it was signed into law. These states were eventually joined by Alaska, Arizona, Georgia, Indiana, Iowa, Kansas, Maine, Mississippi, Nevada, North Dakota, Ohio, Wisconsin, and Wyoming. The lawsuit challenged the constitutional legitimacy of the ACA on two grounds. The first was that the individual mandate fell outside of the federal government’s authority, while the second was that the requirement for state Medicaid expansion of coverage violated state sovereignty.
The case was first heard in the U.S. District Court for the Northern District of Florida by Judge Roger Vinson. He ruled that the individual mandate fell outside of the regulatory powers granted to Congress by the Commerce Clause, while also rejecting the claim that requiring states to pay for a portion of expanded Medicaid coverage violated state sovereignty. Judge Vinson concluded that the “individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit.” The plaintiffs then appealed the case to the Eleventh Circuit Court of Appeals in Atlanta, Georgia. On August 12, 2011, in a 2-1 ruling, the court also found the individual mandate to be unconstitutional. In a departure from the lower court’s ruling, however, the Eleventh Circuit did not find the individual mandate to be inextricable from the ACA, instead finding that the rest of the law should stand.
In a 5-4 opinion written by Chief Justice John Roberts, the Court upheld the individual mandate as falling within Congress’ power to levy taxes , as opposed to its Commerce Clause authority. However, the justices found the Medicaid expansion to be unconstitutional due to the withholding of funds that would follow from noncompliance with expansion.
As of August 2020, fifteen states had chosen not to implement the ACA’s Medicaid expansion. Constitutional scholar Samuel Bagenstos said, “This is the first time the Supreme Court has ever invalidated a condition on federal spending on the grounds that it coerced the states. That's a big deal.” Another constitutional scholar, David Kopel, wrote: “plaintiffs who wish to challenge congressional and presidential overreaching have much stronger Supreme Court precedent than they did yesterday.”
A week after the Senate had approved its draft of the ACA, 14 state attorneys general from Alabama, Colorado, Florida, Idaho, Michigan, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, and Washington, signed a letter to Democratic Congressional leadership requesting the removal of the Nebraska provision from the Senate draft of the act. The letter, organized by South Carolina’s Attorney General Henry McMaster (R), left open the possibility for further litigation. Democrats at the time said that the letter stemmed from political motivations on the part of the signees, some of whom were running in upcoming elections.
President Barack Obama signed the Senate version of the ACA into law on March 23, 2010. After Sen. Edward Kennedy (D-Mass.) died and Sen. Scott Brown (R-Mass.) won his seat, Democratic leadership feared they would not be able to pass another version through the Senate having lost their filibuster -proof majority. Instead, leadership opted to make changes to the law by passing the Health Care and Education Reconciliation Act a week later, which, among its amendments, included the removal of the Nebraska provision from the ACA.
The subsidy lawsuits include King v. Burwell, Halbig v. Burwell, Pruitt v. Burwell, and to some extent Indiana v. IRS. All suits were originally titled “v. Sebelius” until Kathleen Sebelius was replaced by Sylvia Mathews Burwell as United States Secretary of Health and Human Services (HHS). The outcome of these lawsuits decided the legality of subsidies in 36 states that had deferred their state based marketplaces to the federal government HealthCare.Gov.
House Republicans have taken issue with the administration for not moving forward with the law as it was written. Democrats saw the lawsuit as a political move meant to distract the people.
The ruling against King in King V Burwell solidified the fate of all these lawsuits when the Supreme Court declared subsidies issued by the IRS on behalf of HealthCare.Gov legal, and rules that both state and federal marketplaces were to be considered the same under the law.
2015 King V Burwell – This lawsuit argued that subsidies issued by the IRS on behalf of HealthCare.Gov were illegal because the law’s language made it sound as though only states that created their own exchanges could issue tax credits. The courts ruled that the intentions of the law were clear, and the IRS could issue tax credits for states whether they created an exchange or used the federal exchange at HealthCare.Gov.
Burwell was a lawsuit that charged that the Affordable Care Act only made subsidies available to individuals in states that had set up their own health insurance exchanges (marketplaces). Since 36 states exchanges were run by the federal government, the majority of people in the US who are using health insurance subsidies could lose them if Halbig won.
The intention of the law was that states would set up their own marketplaces, and that subsidies would be available to those who shopped on the marketplaces (be they state or federal or joint). The law didn’t foresee the majority of state deferring setting up and running their marketplaces to the federal government ( healthcare.gov is a federal marketplace). The states that deferred their marketplaces did so based on the idea that subsidies would be available through the federal website. These numbered 36 states, since Oregon and Nevada now use the federal website, and included all Republican led states except Idaho.
2014 Burwell V Hobby Lobby (and other contraceptive lawsuits) – This lawsuit, and a few others, all argued that employers shouldn’t be forced to provide coverage that included contraception. The courts agreed, and now a third party provides contraception coverage at no additional charge to those whose private employers are exempt for the mandate for religious reasons (houses of worship and other institutions were already exempt).
Texas, the latest challenge to the Affordable Care Act (ACA), should be dismissed. Justice Thomas concurred. Justices Alito and Gorsuch dissented. This marks the third time the Supreme Court rejected a challenge to the ACA.
On June 17, six U.S. Supreme Court justices joined an opinion penned by Justice Stephen Breyer concluding that California v. Texas, the latest challenge to the Affordable Care Act (ACA), should be dismissed. Justice Thomas concurred. Justices Alito and Gorsuch dissented. This marks the third time the Supreme Court rejected a challenge to the ACA. The Court did not conclusively preclude any further challenges. But the ACA, now having survived three trips to the Supreme Court and intense congressional repeal efforts, seems more than ever solidly entrenched in American law.
To establish standing, a plaintiff must show an actual injury that is traceable to an invalid law and can be redressed or remedied by the courts. The Court held that with the removal of the tax penalty for noncompliance, the mandate was unenforceable against the plaintiffs.
They rejected the plaintiffs’ arguments and additionally contended that the plaintiffs had no standing to bring the case because they had not been injured by the toothless mandate. A federal district court judge ruled for the plaintiffs in 2018 and the Fifth Circuit partially affirmed in 2019.
The challenge did not get off the ground. The majority opinion held that neither the individuals nor the state plaintiffs had “standing” to challenge the mandate or the remainder of the ACA. Under the U.S. Constitution, federal courts may only decide “cases” or “controversies.” They have no authority to render abstract advisory opinions on the validity of a law. To establish standing, a plaintiff must show an actual injury that is traceable to an invalid law and can be redressed or remedied by the courts.
This does not mean that specific provisions will not be challenged. Federal district court Judge O’Connor, who ruled that the Affordable Care Act was invalid initially, has questioned the constitutionality of the ACA’s preventive services mandate in another case. Litigation continues with no foreseeable end on whether religious employers must cover contraceptives without charge for their employees. New ACA regulations emerging from the Biden administration are almost certain to be challenged by Texas and other Republican states.
This does not mean that specific provisions will not be challenged. Federal district court Judge O’Connor, who ruled that the Affordable Care Act was invalid initially, has questioned the constitutionality of the ACA’s preventive services mandate in another case.