Politics

Obamacare survives after Supreme Court rejects latest Republican challenge

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Key Points
  • The Supreme Court ruled against Texas and other Republican-led states seeking to strike down the Affordable Care Act in its latest test before the nation's highest court.
  • The top court voted 7-2 to reverse an appeals court ruling that had struck down the law's individual mandate provision.
  • Two of former President Donald Trump's court picks, Justices Brett Kavanaugh and Amy Coney Barrett, joined the majority in rejecting the Republican effort.
  • President Joe Biden praised the ruling as a major victory and vowed to expand Obamacare.
Demonstrators in support of U.S. President Barack Obama's health-care law, the Affordable Care Act (ACA), hold up 'ACA is Here to Stay' signs after the U.S. Supreme Court ruled 6-3 to save Obamacare tax subsidies outside the Supreme Court in Washington, D.C. June 25, 2015.
Andrew Harrer | Bloomberg | Getty Images

The Supreme Court ruled 7-2 on Thursday against Texas and other Republican-led states seeking to strike down Obamacare in the law's latest test before the nation's highest court.

The court reversed an appeals court ruling that had struck down the law's individual mandate provision. Chief Justice John Roberts and fellow conservative Justices Clarence Thomas, Brett Kavanaugh and Amy Coney Barrett joined Justice Stephen Breyer's opinion, as did Sonia Sotomayor and Elena Kagan.

Breyer said Texas and the other states that challenged the law failed to show they were harmed by it.

"Neither the individual nor the state plaintiffs have shown that the injury they will suffer or have suffered is 'fairly traceable' to the 'allegedly unlawful conduct' of which they complain," Breyer wrote.

The decision marks the third time that Obamacare, officially known as the Affordable Care Act, has survived a challenge before the Supreme Court since former President Barack Obama signed the landmark legislation into law in 2010.

Defenders of Obamacare worried that the Supreme Court – with its 6-3 majority of Republican-appointed justices – would scrap the law, a crucial element of the nation's health-care system.

President Joe Biden, who served as Obama's vice president when the law was signed, praised Thursday's ruling as a "major victory" for millions of Americans who were at risk of losing their health care in the midst of the Covid pandemic if the law was overturned.

Biden also vowed to expand Obamacare, a central promise of his presidential campaign.

"After more than a decade of attacks on the Affordable Care Act through the Congress and the courts, today's decision – the third major challenge to the law that the U.S. Supreme Court has rejected – it is time move forward and keep building on this landmark law," Biden said in a statement.

"Today's decision affirms that the Affordable Care Act is stronger than ever, delivers for the American people, and gets us closer to fulfilling our moral obligation to ensure that, here in America, health care is a right and not a privilege," he said.

Obama said the Supreme Court's ruling makes clear that the law will endure, and the principle of universal health-care coverage has been established.

Two of former President Donald Trump's Supreme Court picks, Kavanaugh and Barrett, joined the court's overwhelming majority in rejecting the latest Republican effort to overturn the law. Democrats had warned during Barrett's confirmation hearings that she was likely to cast a vote in the case that would jeopardize Obamacare.

Justices Samuel Alito and Neil Gorsuch, both conservatives, dissented from the court's majority opinion.

"Today's decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two," Alito wrote in a dissent that was joined by Gorsuch. "In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue."

Trump tried unsuccessfully throughout his one term in office to overturn Obamacare. However, Congress as part of the 2017 tax bill effectively eliminated Obamacare's so-called individual mandate penalties by reducing them to $0.

Texas and more than a dozen other Republican-led states then filed suit, arguing that that change to the law rendered it unconstitutional. The Supreme Court had previously upheld the mandate under Congress' power to tax, but the GOP-led states argued that the tax justification was no longer valid if the penalty was nonexistent.

Those states, backed by Trump's Department of Justice, argued that the entire Affordable Care Act should be erased if the individual mandate provision was found to be unlawful.

The case made its way through federal district court and the U.S. Court of Appeals for the Fifth Circuit, which agreed that the individual mandate was unconstitutional. But 20 Democrat-led states, led by California, asked the Supreme Court to reverse the appeals court's judgment, arguing that with the mandate reduced to zero Americans have the choice whether or not to buy insurance.

The Supreme Court agreed in March 2020 to hear the case.

A spokeswoman for Trump did not immediately respond to CNBC's request for comment on the court's ruling.

Numerous Biden administration officials and the top Democrats in Congress were quick to celebrate the decision.

"Each time, in each arena, the Affordable Care Act has prevailed," Senate Majority Leader Chuck Schumer, D-N.Y., said on the Senate floor minutes after the ruling.

"Let me say definitively: The Affordable Care Act has won, the Supreme Court has ruled, the ACA is here to stay. And now, we're going to try to make it bigger and better," Schumer said.

"What a day," he added.

House Speaker Nancy Pelosi, who was instrumental in the law's passage, hailed the ruling and praised Obamacare as a "pillar of American health and economic security."

"Today's Supreme Court decision is a landmark victory for Democrats' work to defend protections for people with preexisting conditions," the California Democrat said during her weekly press conference.

White House chief of staff Ron Klain tweeted "It's still a BFD" — an apparent reference to Biden's infamous hot-mic comment at the signing of the bill in 2010, when he whispered to Obama, "this is a big f------ deal."

"Today is a good day," tweeted Sabrina Singh, deputy press secretary for Vice President Kamala Harris.

White House communications official Karine Jean-Pierre noted that the ruling marked the third time Obamacare survived a challenge in the high court.

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Affordable Care Act stands following Supreme Court ruling