Obamacare lawsuits

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The Patient Protection and Affordable Care Act, commonly known as Obamacare, was passed in its finality on March 21, 2010, and signed into law by President Barack Obama on March 23, 2010.^[1] Many aspects of the law prompted litigation, particularly the law's individual and employer mandate provisions, Medicaid expansion, and certain tax issues.

Zubik v. Burwell[edit]

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. Burwell, Priests for Life v. Health and Human Services, East Texas Baptist University v. Burwell, Southern Nazarene University v. Burwell, Eternal Word Television v. Burwell, Little Sisters of the Poor v. Burwell, Geneva College v. Burwell, Ave Maria University v. Burwell, Wheaton College v. Burwell, and University of Notre Dame v. Burwell.^[2][3]

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).^[4] 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.^[5]

A nun from Little Sisters of the Poor speaks outside the Supreme Court on the day of oral arguments for Zubik v. Burwell.

On July 14, 2015, the Tenth Circuit Court of Appeals ruled in Little Sisters of the Poor v. Burwell that the accommodation provided sufficient protection for religious liberty, and that the Little Sisters of the Poor would have to comply with it.^[6]

On November 6, 2015, the Supreme Court granted certiorari in seven of the cases, consolidating argument under Zubik v. Burwell. The date for oral arguments was set for March 23, 2016.^[7]

During oral arguments, counsel for the Little Sisters of the Poor accused the government of wanting to "hijack" health plans in order to provide contraceptive coverage. Chief Justice John Roberts repeated the charge, stating "the petitioner has used the phrase 'hijacking,' and it seems to me that that’s an accurate description of what the government wants to do." During the government's argument in response, Justice Anthony Kennedy also used the term, asking the government why it was "necessary to hijack the plans." Justice Sonia Sotomayor further asked the government's counsel, "The hijacking analogy has been mentioned. Can you explain why you don’t see this as a hijacking?"^[8]

On March 29, the Supreme Court issued an order asking all the parties in the lawsuit to file additional briefs by April 20. In the briefs, the parties were to discuss additional ways in which employees of the religious organizations could obtain contraceptive coverage without the involvement of the organizations themselves.^[9][10]

Decision[edit]

On May 15, 2016, the court issued a per curiam opinion in which the judgments in each the seven consolidated cases were vacated and remanded. The cases were sent back to each of the courts from which the case was appealed for further consideration. Relying on the supplemental briefs submitted by both parties, the justices determined that a solution could be reached that would provide employees with contraception coverage without action on the part of their religious employers.^[11]

The Supreme Court, in vacating and remanding the cases, left open the possibility of hearing arguments on this provision in the future.^[13]

King v. Burwell[edit]

Background[edit]

The Affordable Care Act stated that individuals were eligible for tax credits to help pay for plans "which were enrolled in through an Exchange established by the State."^[14] However, the Internal Revenue Service (IRS) granted the tax credits regardless of whether the exchange was established and operated by a State (including a regional exchange or subsidiary exchange) or by HHS.^[15].

Many states objected to the IRS rule granting tax credits to individuals purchasing plans on the federal exchange. 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.

A number of lawsuits were filed against the IRS interpretation, claiming that the Affordable Care Act only allowed the IRS to grant tax credits to individuals who purchased insurance through state exchanges. Lawsuits were filed in Indiana (Indiana v. IRS), Oklahoma (Pruitt v. Burwell), the District of Columbia (Halbig v. Burwell), and Virginia (King v. Burwell). The defendant in the latter three cases was originally Kathleen Sebelius in her capacity as Health and Human Services (HHS) Secretary; Sylvia Burwell became the named defendant in the cases when she replaced Sebelius as head of HHS in 2014.

King v. Burwell[edit]

King v. Burwell was filed in Virginia with the intention of nullifying the advanced premium tax credits on the same grounds as in Halbig.^[16] On July 22, 2014, the same day the D.C. Circuit ruled in Halbig v. Burwell, the U.S. Court of Appeals for the Fourth Circuit ruled unanimously in favor of the government in King v. Burwell, upholding the legality of the tax credits.^[17]

The petitioners appealed, asking the U.S. Supreme Court to make a decision on the tax credits awarded through the federal exchange. The coordinator of the petitioners' case, Sam Kazman, said in a statement, "From the time these cases were first filed, we've tried to get this issue resolved as quickly as possible for the plaintiffs and the millions of individuals like them. A fast resolution is also vitally important to the states that chose not to set up exchanges, to the employers in those states who face either major compliance costs or huge penalties, and to employees who face possible layoffs or reductions in their work hours as a result of this illegal IRS rule. Our petition today to the Supreme Court represents the next step in that process."^[18]

Indiana v. IRS[edit]

The State of Indiana filed a suit against the IRS on October 13, 2013, in an attempt to nullify the tax credits given to those using the federal exchanges to purchase healthcare plans.^[19] In particular, school districts and local governments in Indiana objected to paying tax penalties if their employees received tax credits for the federal government. As of August 2016, this litigation was still ongoing in the United States District Court for the Southern District of Indiana.

Pruitt v. Burwell[edit]

On January 7, 2011, Oklahoma Attorney General Scott Pruitt announced that the state of Oklahoma would file its own lawsuit in federal district court. 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."^[20] The case was then filed as Oklahoma v. Sebelius on January 21, 2011.

On September 19, 2012, Attorney General Pruitt filed an amended complaint with the U.S. District Court for the Eastern District of Oklahoma that challenged the federal government's implementation of certain parts of the act, especially the tax credit for insurance purchased on the federal exchange. The complaint alleged that this IRS rule, called the "Final Rule," violated the Administrative Procedures Act and asked the court to declare it invalid.^[21][22]

In September of 2014, the district court ruled against the IRS in Pruitt v. Burwell. The court held that, under the Affordable Care Act, the tax credits applied to the state exchanges only.

Halbig v. Sebelius[edit]

Halbig v. Sebelius was filed with the intention of nullifying the tax credits obtained through the federal exchange.^[23] On July 22, 2014, the United States Court of Appeals for the District of Columbia Circuit ruled in favor of Halbig in Halbig v. Burwell. The court determined that the law's language granting tax credits to those using exchanges "established by the State" meant that only those using the state exchanges were eligible for tax credits, but not those using the federal exchange. Judge Thomas Griffith, who wrote the opinion of the court, explained the discrepancy, writing, "On its face, this provision authorizes tax credits for insurance purchased on an Exchange established by one of the fifty states or the District of Columbia. See 42 U.S.C. § 18024(d). But the Internal Revenue Service has interpreted section 36B broadly to authorize the subsidy also for insurance purchased on an Exchange established by the federal government under section 1321 of the Act." The decision came in at 2-1.^[24]

A U.S. Department of Justice spokeswoman quickly stated that the department would seek an en banc review of the Halbig decision, claiming, "We believe that this decision is incorrect, inconsistent with congressional intent, different from previous rulings, and at odds with the goal of the law: to make health care affordable no matter where people live."^[25]

Due in part to the use of the "nuclear option" in the Senate in December 2013, President Obama was able to appoint three judges to the D.C. Circuit. While the initial ruling in the court went 2-1 in favor of Halbig, an en banc review placed the case before the entire D.C. Circuit. Seven of those judges were appointed by Democratic presidents while only four were appointed by Republicans.^[26] However, the court agreed to suspend judgment until after the U.S. Supreme Court decision in King v. Burwell.^[27]

U.S. Supreme Court[edit]

The Supreme Court granted certiorari in King v. Burwell on November 7, 2014. On June 8, 2015, President Barack Obama was asked at a press conference about the impending ruling. He replied: "This should be an easy case. Frankly, it probably shouldn’t even have been taken up . . . . [Overruling the tax credits is] not something that should be done based on a twisted interpretation of four words in -- as we were reminded repeatedly -- a couple-thousand-page piece of legislation."^[28]

On June 25, 2015, the Supreme Court ruled 6-3 to uphold the tax credits for purchasing on the federal exchange. Chief Justice John Roberts delivered the opinion of the Court, joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. Justices Antonin Scalia, Clarence Thomas, and Samuel Alito dissented.^[29]

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." The Court found that, when taken in context, the phrase "established by the State" was ambiguous, because other parts of the Affordable Care Act treated the federal and state exchanges as equivalent and assumed that tax credits would be available through either. The Court then turned to the issue of whether the IRS interpretation was reasonable. The Court described the Affordable Care Act as "a series of interlocking reforms" and noted that its other reforms would enter "a death spiral" without the tax credits. Thus granting tax credits to those purchasing on the federal exchange was not only reasonable but "necessary" in order to accomplish Congress' goals in passing the Affordable Care Act.^[30]

In his dissenting opinion, Justice Scalia criticized the Court's interpretation of the statute: "The Court holds that when the Patient Protection and Affordable Care Act says 'Exchange established by the State' it means 'Exchange established by the State or the Federal Government.' That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so."^[31] The dissent went on to criticize the entirety of the Court's jurisprudence regarding the Affordable Care Act:

National Federation of Independent Business v. Sebelius[edit]

Background[edit]

A federal lawsuit was filed in Florida, with 26 states, two individuals, and an independent organization named as plaintiffs. The following plaintiffs joined: The Attorneys General of Arizona, Indiana, Mississippi, Nevada, North Dakota, Alabama, Colorado, Florida, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Georgia, Alaska, Ohio, Wisconsin, Kansas, Maine, Iowa, and Wyoming; Mary Brown and Kaj Ahlburg; and the National Federation of Independent Business.^[33] The lawsuit was brought to the federal District Court for the Northern District of Florida by Florida state Attorney General Bill McCollum on March 23, 2010.^[34]

This lawsuit challenged the Affordable Care Act on the grounds that the individual health insurance mandate exceeded Congress' authority to regulate interstate commerce under the Commerce Clause of Article I and did not fall within its power to tax. The complaint further alleged that the Act violated the Tenth Amendment by compelling states to follow federal regulations.^[35]

A federal district court held on January 31, 2011, that the individual mandate of the Affordable Care Act exceeded Congress' authority. The court also held that the individual mandate could not be severed from the rest of the Affordable Care Act, thus striking the entire Act. The federal government appealed the ruling, which then went to the Eleventh Circuit Court of Appeals. The circuit court found the individual mandate to be unconstitutional, but denied that the individual mandate provision could not be severed from the law, thus preserving the rest of the Affordable Care Act.^[36]

U.S. Supreme Court decision[edit]

On November 14, 2011, the United States Supreme Court granted certiorari in National Federation of Independent Business et al. v. Sebelius. The Supreme Court decided the case on June 28, 2012. In a 5-4 decision, the court upheld the Affordable Care Act's individual mandate as a legitimate exercise of Congress' Article I power to lay and collect taxes. Chief Justice John Roberts, delivering the opinion of the court, wrote, "The court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation, the Constitution has made no such promise with respect to taxes." The Court declined to rule whether the Affordable Care Act was also a legitimate exercise of Congress' Article I power to regulate interstate commerce.^[37][38]

The court also considered whether the Affordable Care Act's expansion of Medicaid was a constitutional exercise of federal power. The court concluded that, by cutting off all Medicaid funding to states that refused to expand the program, the federal government was engaging in coercion. The court stated that the law transformed the original Medicaid program into "an element of a comprehensive national plan to provide universal health insurance coverage."^[38] Thus, the court struck that particular aspect of the Affordable Care Act.

Dissent[edit]

Justices Scalia, Kennedy, Thomas, and Alito dissented. The dissenting opinion argued that the individual mandate was not a legitimate regulation of interstate commerce, because it compelled people to engage in particular transactions rather than regulating existing transactions: "the mere fact that we all consume food and are thus, sooner or later, participants in the 'market' for food, does not empower the Government to say when and what we will buy. That is essentially what this Act seeks to do with respect to the purchase of health care."^[38] The dissenters argued that the individual mandate represented an unprecedented abuse of federal power, for the federal government has "never before used the Commerce Clause to compel entry into commerce."^[38] The dissenting opinion also argued that the individual mandate was not a legitimate exercise of the power to tax, because the statute described the fine as a penalty rather than a tax. The opinion concluded that the Affordable Care act should be overturned in its entirety, as it could not function as intended without the individual mandate.

Burwell v. Hobby Lobby; Burwell v. Conestoga Wood Specialties[edit]

Background[edit]

The Affordable Care Act mandated that insurance plans must cover certain essential benefits—which HHS later interpreted to include contraceptive coverage. Employers that didn't provide this benefit in their health insurance plan would face hefty fines. Several organizations argued that being required to cover birth control violated religious freedoms. Hobby Lobby, a company owned by an evangelical Christian family, sought exemptions from coverage of four different contraceptives--two emergency morning after pills and two intrauterine devices (IUDs)--on the basis that those contraceptives were forms of abortion according to their religious beliefs. The company did not argue against providing most common forms of birth control.^[39] In July of 2013, Hobby Lobby was granted an injunction to temporarily protect it from the contraceptive mandate.^[40]

Conestoga Wood Specialties was a company owned by a Mennonite family, who objected to contraceptives that could potentially cause an abortion. In July of 2013, the Third Circuit Court of Appeals ruled against Conestoga Wood Specialties on the grounds that for-profit corporations cannot engage in religious exercise.^[41]

Supreme Court decision[edit]

In November of 2013, the U.S. Supreme Court granted certiorari and consolidated both cases. Both companies' appeals were heard together during a one-hour oral argument.^[42] The Supreme Court ruled in favor of Hobby Lobby in Burwell v. Hobby Lobby on June 30, 2014.^[43]

The 5-4 decision allowed closely-held companies to opt out of offering contraceptives on the basis of religious beliefs. The case hinged on the Free Exercise Clause of the First Amendment and the Religious Freedom Restoration Act (RFRA) passed by Congress in 1993.^[44] RFRA stated that the federal government "shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability."^[45]. Justice Samuel Alito, writing the court's opinion, turned to Title I of the United States Code. Since Title I defined "person" to include "corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals," the court held that for-profit corporations qualified as persons for the purposes of RFRA. The opinion concluded, "We doubt that the Congress that enacted RFRA — or, for that matter, ACA – would have believed it a tolerable result to put family-run businesses to the choice of violating their sincerely held religious beliefs or making all of their employees lose their existing healthcare plans."^[46]

Dissent[edit]

The dissenting justices claimed the ruling would allow companies to "opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs." Likewise, the Obama administration argued that companies that did not wish to provide the contraceptive coverage or other areas of coverage due to religious beliefs could decide not to provide any company-wide options.^[46]

Although the decision expanded the notion of corporate personhood to include religious rights "to provide protection for human beings," members of the public found it highly divisive in nature as it reaffirmed the court's "pro-business" stance.^[47] Senate Majority Leader Harry Reid (D-Nev.) pledged to restore the Affordable Care Act's contraception coverage, stating, "If the Supreme Court will not protect women’s access to health care, then Democrats will. We will continue to fight to preserve women’s access to contraceptive coverage and keep bosses out of the examination room."^[48]

U.S. House of Representatives v. Burwell[edit]

See also: Boehner's lawsuit against the Obama administration

John Boehner

Claiming President Obama "changed the healthcare law without a vote of Congress, effectively creating his own law by literally waiving the employer mandate and the penalties for failing to comply with it," Speaker of the House John Boehner (R-Ohio) announced a lawsuit focusing on the president's failure to enforce the employer mandate as written in the ACA.^[49] A draft resolution to form a Bipartisan Legal Advisory Group (BLAG) was introduced on July 10, 2014, by House Rules Committee Chairman Pete Sessions (R-TX).^[50][51] The case would also focus on the executive branch's payments to insurance companies, totaling about $3 billion dollars, without express appropriation by Congress.^[52] On July 30, 2014, the House voted 225 to 201 in favor of a resolution to file the lawsuit.^[53] The case was filed as U.S. House of Representatives v. Burwell on November 21, 2014.^[54] In September 2015, the United States District Court for the District of Columbia ruled that the House could proceed with its lawsuit challenging the use of unappropriated funds for new healthcare subsidies; however, the House could not sue the executive branch for delaying implementation of the employer mandate.^[55] In May 2016, the same district court ruled that the executive branch could not use unappropriated funds to subsidize insurance companies.^[56] The ruling was stayed to allow for appeal.

State-level lawsuits[edit]

State of Texas v. United States of America[edit]

On February 24, 2016, the states of Texas, Kansas, Indiana, Nebraska, Louisiana and Wisconsin filed a lawsuit against the U.S. Department of Health and Human Services over the health insurance providers fee. The health insurance providers fee was established by the Affordable Care Act and was a fee charged to insurers to fund the advanced premium tax credits that assisted individuals with purchasing insurance on the health insurance exchanges. Although Congress passed a law in December 2015 that lifted the fee for one year in 2017, the fee was collected for 2014, 2015 and 2016.^[57][58]

In March 2015, the Actuarial Standards Board, a private entity which sets standards for actuaries, notified states that they would be required to "pay a portion of the fee to their Medicaid managed care organizations to then pay to the federal government." If they did not, their accounting practices would not be considered sound and they would not receive matching federal Medicaid dollars. The lawsuit challenged the legality of this rule, stating that it came from a private entity with no legislative authority and that the Affordable Care Act did not contain language notifying states that they would be responsible for the fee. The lawsuit asked that the rule be eliminated and states be reimbursed for the fees that were already collected.^[59]

Commonwealth of Virginia v. Sebelius[edit]

On March 22, 2010, Virginia Attorney General Ken Cuccinelli (R) announced that the state would be filing suit against the federal government as soon as the act was signed; it did so on March 23, in the District Court for the Eastern District of Virginia. Cuccinelli stated that he believed the state of Virginia to be in a unique position to sue because in 2010 the state passed a statute, Virginia Code 38.2-3430.1:1, declaring that no resident of Virginia would be required to have insurance or be penalized for not having it.^[60][61] The case was filed as Commonwealth of Virginia v. Sebelius.

In the complaint filed, the state argued that the individual mandate exceeded powers granted to Congress by the commerce clause of Article I. It further asked that the entire act be declared invalid because the individual mandate is an "essential, non-severable" provision. Cuccinelli also asked the court to declare Virginia Code 38.2-3430.1:1 a valid exercise of state power.^[62]

Commonwealth of Virginia v. Sebelius was dismissed by the Fourth Circuit on September 8, 2011 due to lack of standing.^[63]

Liberty University v. Lew[edit]

On July 30, 2010, a lawsuit was filed by Liberty University and several individuals challenging the act under Virginia law, much like the Virginia state lawsuit. The original filing of the suit takes issue with the potential for public funds to be used for abortion and claims that the act shows preference for certain religion over others by being selective about those for which it offers exemptions. The suit also alleged that the act violates the constitutional guarantee of a Republican form of government.^[64] The suit was originally filed against Timothy Geithner, Secretary of the Treasury, but was changed when he was replaced by Jacob Lew.

Though the original suit was dismissed by the United States Court of Appeals for the 4th Circuit in 2011, the Supreme Court ordered that the court reopen the case. The Supreme Court issued the order explaining that the suit remained active following its National Federation of Independent Business v. Sebelius ruling because Liberty University's challenges were to the employer mandates rather than the individual one. Since its original filing, the lawsuit expanded to include a challenge to HHS contraception mandate.^[65][66] However, the case was dismissed again and the Supreme Court denied certiorari for an appeal.^[67]

Recent news[edit]

This section links to a Google news search for the term Obamacare + lawsuits

See also[edit]

• Barack Obama
• Kathleen Sebelius
• Sylvia Mathews Burwell
• Obamacare overview
• Health insurance policy cancellations since Obamacare
• State Attorneys General Against the Patient Protection and Affordable Care Act of 2010
• Effect of the Affordable Care Act in the United States

External links[edit]

• Burwell v. Hobby Lobby decision
• National Federation of Independent Business v. Sebelius decision

Footnotes[edit]

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