Healthcare & Pharmaceuticals

U.S. Supreme Court rejects Trump-backed challenge to Obamacare

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WASHINGTON, June 17 (Reuters) - The U.S. Supreme Court on Thursday rejected a Republican bid backed by former President Donald Trump's administration to invalidate Obamacare, preserving the landmark healthcare law for the third time since its 2010 enactment.

The 7-2 ruling declared that Texas and other challengers had no legal standing to file their lawsuit seeking to nullify a law, formally called the Affordable Care Act, that has enabled millions of Americans to obtain medical coverage either through public programs or private insurers. The decision was authored by liberal Justice Stephen Breyer.

The justices did not decide broader legal questions raised in the case about whether a key Obamacare provision was unconstitutional and, if so, whether the rest of the statute should be struck down. The provision, called the "individual mandate," originally required Americans to obtain health insurance or pay a financial penalty.

"Today's U.S. Supreme Court decision is a major victory for all Americans benefiting from this groundbreaking and life-changing law," said Democratic President Joe Biden, whose administration opposed the lawsuit.

With three major challenges to Obamacare now having been resolved by the justices, Biden added, "it is time to move forward and keeping building on this landmark law." Biden also encouraged more Americans to use Obamacare to obtain coverage.

Polling data has shown that Obamacare has become increasing popular among Americans, including Republicans.

Texas Attorney General Ken Paxton, a Republican who led the challenge, vowed to continue to fight Obamacare. The individual mandate, Paxton wrote on Twitter, "was unconstitutional when it was enacted and it is still unconstitutional."

The law was the signature domestic policy achievement of Democratic former President Barack Obama, who Biden served with as vice president.

"This ruling reaffirms what we have long known to be true: the Affordable Care Act is here to stay," Obama said.

Breyer wrote that none of the challengers, including Texas and 17 other states and the individual plaintiffs, could trace a legal injury to the individual mandate, partly because a Republican-backed tax law signed by Trump in 2017 had wiped out the financial penalty.

"Unsurprisingly, the states have not demonstrated that an unenforceable mandate will cause their residents to enroll in valuable benefits programs that they would otherwise forgo," Breyer wrote.

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The U.S. Supreme Court building in Washington, U.S. May 17, 2021. REUTERS/Jonathan Ernst/File Photo

Twenty states including Democratic-governed California and New York and the Democratic-led House of Representatives intervened in the case to try to preserve Obamacare after Trump had refused to defend the law.

Conservative Justices Samuel Alito and Neil Gorsuch dissented from the ruling. Alito called the decision an example of "judicial inventiveness" and labeled the individual mandate "clearly unconstitutional."

Republicans fiercely opposed Obamacare when it was proposed, failed to repeal it when they controlled both chambers of Congress and have been unsuccessful in getting courts to invalidate the law, including in 2012 and 2015 Supreme Court decisions.

Biden's administration in February urged the Supreme Court to uphold Obamacare, reversing the position taken by the government under Trump, who left office in January.

Justice Amy Coney Barrett, a Trump appointee whose 2020 confirmation hearing included questions from Democrats over whether she would vote to invalidate Obamacare, joined the majority in the ruling.

'RELENTLESS EFFORTS'

If Obamacare had been struck down, up to 20 million Americans stood to lose medical insurance and insurers again could have refused to cover people with pre-existing medical conditions. Obamacare expanded the Medicaid state-federal healthcare program and created marketplaces for private insurance.

House Speaker Nancy Pelosi, a Democrat, called the ruling a "victory for Democrats' work to defend protections for people with pre-existing conditions against Republicans' relentless efforts to dismantle them."

Biden has pledged to expand healthcare access and buttress Obamacare. He and other Democrats had criticized Republican efforts against Obamacare at a time when the United States was grappling with a deadly coronavirus pandemic.

Despite the Supreme Court's 6-3 conservative majority, the Republican Obamacare challengers came away disappointed in a ruling in which all three liberal justices were joined by four of the six conservative justices. Opposition to Obamacare seems to have receded as a political issue for many Republicans as their party has emphasized other matters such as immigration, voting restrictions and hot-button "culture war" issues.

The Supreme Court previously upheld Obamacare by deeming the financial penalty under the individual mandate a tax permissible under the U.S. Constitution's language empowering Congress to levy taxes. The penalty's elimination in 2017 meant the individual mandate could no longer be interpreted as a tax provision and was therefore unlawful, the Republican challengers argued.

A federal judge in Texas in 2018 ruled that Obamacare, as structured following the 2017 change, violated the Constitution and was invalid in its entirety. The New Orleans-based 5th U.S. Circuit Court of Appeals agreed that the individual mandate was unconstitutional but did not rule that the entire law should be stricken.

Reporting by Lawrence Hurley; Editing by Will Dunham

Our Standards: The Thomson Reuters Trust Principles.

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