The Legal Brief

Supreme Court Rejects Challenge to ACA

June 17, 2021

By: Jill E. Hall

The United States Supreme Court today again upheld the Affordable Care Act (“ACA”) with a 7-2 vote, rejecting a challenge to the law by Republican-led states. In a decision by Justice Breyer, the Court reversed a lower court ruling that the law’s individual mandate is unconstitutional. The Court did not reach the merits of the case but held that the challengers did not have legal standing to sue. 

Once a central part of the ACA (or “Obamacare”), the individual mandate that required individuals to purchase health insurance or else pay a penalty was effectively nullified in 2017 when Congress reduced the penalty for failing to buy health insurance to $0. In 2012, the law was upheld when the Supreme Court ruled the individual mandate was a tax and therefore constitutional. In this latest legal challenge, the plaintiff states argued the law was no longer constitutional because, with a $0 penalty, the mandate could no longer be considered a tax. In an effort to strike down the ACA altogether, the plaintiff states argued that the rest of the ACA could not survive without the individual mandate.

Rather than reach the merits of the case, the Supreme Court held that the plaintiff states did not have a legal right to sue because they had not been injured by the provision at issue in the case. Justices Alito and Gorsuch dissented. This is the third time the Supreme Court has upheld Obamacare despite an increasingly conservative majority on the Court.