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Healthcare Reform Decision: KNX Legal Analyst Amy Menkes Stoody on Today’s Supreme Court Ruling

This piece is special to TheLiberalOC by Amy Menkes Stoody, a Newport Beach lawyer with Stoody, Mills & Doyle.  She also serves as a legal analyst for KNX newsradio 1070 in Los Angeles and is the chair -elect for Boys Town California.  She’s a brilliant attorney and skilled at breaking down complex legal decisions in ways to help anyone understand the fundamental issues behind the ruling.

We’re delighted to run this in-depth analysis.

The Supreme Court heard arguments in March over President Barack Obama’s centerpiece of domestic policy, the Affordable Care Act which extended insurance coverage to more than 30 million Americans, through an expansion of Medicaid and required that individuals buy health insurance starting in 2014 or pay a penalty, was upheld.  They have now issued their Decision, voting to uphold the key provisions of the health care law and “individual mandate” with Chief Justice John Roberts siding with the majority.  Key decisions were made rather than delaying the case until 2015, when the first tax payment would become due.  The 5-4 Decision upheld the law, with the only restrictions applying to the expansion of Medicaid.

Chief Justice Roberts, the author of the majority opinion, surprised observers by joining the court’s four more liberal members in the key finding and becoming the swing vote. Justices Anthony Kennedy, who was expected to be the swing vote, joined three more conservative members in a dissent and read a statement in court that the minority viewed the law as “invalid in its entirety.”  The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” Chief Justice John Roberts wrote in the ruling.

The main issue was whether the U.S. Congress overstepped their authority in requiring that all Americans buy health insurance by 2014 or pay a penalty.  This “individual mandate” has been tossed about since passage and several cases were filed challenging the requirement.  Other issues included whether the rest of the law could survive if the mandate was struck down, whether Congress improperly coerced the states to expand the Medicaid program that provides healthcare to the poor and whether challenges to the mandate had to be deferred until a date after the penalty became due.

Republicans called the Patient Protection and Affordable Care Act unconstitutional even before Obama signed it into law.  Senate Republican Leader Mitch McConnell of Kentucky called the law an “unprecedented and unconstitutional expansion of the federal government into the daily lives of every American.”

The Supreme Court followed, in great part, the Decisions rendered by the appeals courts in Cincinnati and Washington,D.C.  Only the Atlanta federal appeals courts struck down only a part of the law, which was the case before the Supreme Court, finding that Congress exceeded its power under the Constitution when it adopted the mandate.  At the district court level, rulings followed political affiliation and judges appointed by Democratic presidents upheld the law, while Republican appointees struck it down but once the cases reached the appellate courts the playing field changed, with Republican appointees, like Roberts, finding that the law was constitutional.

The implications of this historic decision are indeed far-reaching.  According to the most recent U.S. Census numbers, almost two million of the elderly are age 90 or older; nearly triple the number from three decades ago.  They are projected to increase from 1.9 million to 8.7 million by midcentury, and making up 2% of the total U.S. population and one in 10 older Americans.  In 2008 alone, $43 billion was paid by hospitals, insurance companies and taxpayers to cover the medical costs of uninsured people.

There were four questions reviewed by the Supreme Court:

Is it constitutional for the federal government to require all people to have basic health insurance by 2014?  Although the mandate was considered to have violated the Interstate Commerce Clause in the Constitution, the Supreme Court found that it still survived judicial scrutiny as a “tax.”

Can the rest of the law can take effect even if that central mandate is held unconstitutional?  The severability question is now moot as the key provisions of the law were upheld. 

Is it unfair to force states to pay more for expanding the Medicaid program?  No Judge had decided that this part of the law exceeds the federal government’s powers.  The Decision did, however, restrict the expansion of Medicaid.

Was the Court required to wait until 2015 to decide this case because a federal law generally prohibits challenges to taxes until the taxes are paid? The justices said “no.”

There were also recusal issues raised.  On the same date that the Justices met to decide whether they would hear the case, Justices Antonin Scalia and Clarence Thomas attended a Federalist Society Dinner that was sponsored, in part, by a law firm that opposed the law.  Thomas’ wife, Virginia, had also worked for a group that opposes the health care law.  Justice Elena Kagan was also asked by advocacy groups to withdraw from the case as she served as solicitor general in the Obama administration when the law was being written.

This is a significant decision, one that will redefine the “Roberts Supreme Court” for many years to come.


  1. Robert Lauten Robert Lauten June 28, 2012

    ObamaCare & the Supreme Court’s “Reasoning”
    ObamaCare may force people to purchase Health Insurance,

    because the penalty for not purchasing it is administrated by the Internal Revenue Service,

    therefore the penalty is a tax

    and since Congress has the Constitutional authority to tax’

    therefore ObamaCare’s demand for people to purchase Health Insurance is Constitutional.
    Impeach the 5 Marxist-Leninist on the Supreme Court

    • Santa Ana Citizan Santa Ana Citizan July 2, 2012

      Buffoon of the week award to Robert Lauten. Mr. Lauten’s intellectual mis-firepower is rivaled only by Orly Taitz, another true believer that lives by the motto “There are no facts, only opinion – and opinion is to be provided by force”. Joseph Goebbels woudl be proud his legacy is alive and well in the “Tea Party” and GOP. Congratulations, Mr. Lauten! What a tremendous legacy!

      • Walter Walter July 5, 2012

        Goebbels and the TEA Party? Have another sip of the Koolaid. No doubt you think the “occupy” (the outhouse) movement is representative of most Americans. It represents the useless,sniveling leech like scum the demomarxists rely on to propagate their vile lies.
        Your demomarxists have lived up EXACTLY to
        Dr. Goebbels theories of propaganda, “the bigger the lie the more believable it will become”.
        TEA Party Taxed Enough Already is what it means and it represents actual American TAXPAYERS. Not parasites.

        • Dan Chmielewski Dan Chmielewski Post author | July 5, 2012

          Walter — Americans pay a lower percentage of their income to local, state and federal taxes today than they did in the 1950s (source: CBO). Barack Obama cut federal taxes lower than George W. Bush did. The Bush tax cuts have failed to stimulate the economy as they were promised to. What costs you more Walter is healthcare — double what is was just 10 years ago –, energy, and housing costs.

  2. Robert Lauten Robert Lauten July 2, 2012

    Tax Inactivity

    The Supreme Court ruled as constitutional the ability of Congress to penalize inactivity by properly calling the penalty a tax. Today the tax is for not buying health insurance, – (that’s health insurance with Federal and State approved coverage).

    Tomorrow the inactivity tax might be for not purchasing insulating windows, since it is for the common good that the people conserve energy. Next week the inactivity tax might be for not purchasing drought tolerant plants to landscape the new house, since it is for the common good that the people conserve water.

    Next month the inactivity tax might be for not purchasing ______________ since it is for the common good that the people ______________.

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