FOR IMMEDIATE RELEASE : Thursday, June 28, 2012
CONTACT: Sara Rabern, (605) 773-3215
Attorney General Jackley Announces United States Supreme Court Upholds Federal Health-Care Act’s Individual Mandate as Imposing a Tax, and Declares Medicaid Expansion Violates the Constitution by Threatening States
PIERRE, S.D. – Attorney General Marty Jackley announces that the United States Supreme Court has overturned the U.S. District Court and 11th Circuit Court of Appeals decisions, holding that the Federal Health-Care Act’s individual mandate is a constitutional tax, and the Court declares the Act’s Medicaid Expansion does violate the Constitution by threatening the States.
“I feel strongly that the federal takeover of healthcare goes too far in violation of fundamental individual and state’s rights guaranteed by our Constitution. I am disappointed that despite lawmakers representation this does not impose a tax, a divided Supreme Court declares the Act as creating a constitutional tax. I am relieved that the Act’s Medicaid expansion has been declared unconstitutional and has been significantly limited by the Court,” stated Attorney General Jackley. “Today’s decision now places this monumental issue back into the political arena for the voters to determine the future of their healthcare, and the importance of their individual and state’s rights.”
On March 23, 2010, South Dakota and 12 other states joined in the litigation challenging the Federal Health-Care Act. The multi-state litigation ultimately expanded to 26 states plus the assistance of Virginia and Missouri. In October 2011, the U.S. Federal Court denied the federal government’s motion to dismiss the multi-state healthcare suit. In January 2011, the U.S Federal District Court ruled that the Health-Care Reform Act was unconstitutional. The Federal Court ruled that the provisions requiring Americans over 18 to obtain qualifying insurance coverage or face a penalty exceeded Congress’ powers under the Commerce Clause of the U.S. Constitution. In August 2011, the 11th Circuit Court of Appeals affirmed the District Court ruling that the Federal Health-Care Individual Mandate is unconstitutional. The case was then argued before the U.S. Supreme Court in March of 2012.
THE ACT’S FINANCIAL BURDEN
The Federal Healthcare Act’s expansion of coverage was estimated to increase federal spending in the amount of $3.3 trillion over 10 years as set forth in the U.S. Supreme Court oral arguments.
In the case filings, the South Dakota Department of Social Services further estimated that South Dakota’s Medicaid costs would increase $100 million initially with the Federal Acts implementation, and $36 million annually thereafter. Because South Dakota responsibly maintains a balanced budget, these significant cost increases are a significant concern for the financial well-being of the State.
The total cost for the State to join the challenge is approximately $8,252.
SUPREME COURT DECISION
The Supreme Court held that the Anti-Injunction Act does not bar the challenge because Congress did not intend the payment to be treated as a “tax” for purposes of said Act. The Court further opined that the individual mandate is not a valid exercise of Congress’ power under the Commerce Clause. The Court went on to state nor can the individual mandate be sustained under the Necessary and Proper Clause as an integral part of the Affordable Care Act’s other reforms. However, the Court has held that despite law makers representations, the individual mandate may be upheld as within Congress’ power under the Taxing Clause of the Constitution.
Significantly, relying on the case South Dakota v. Dole, the Court held that the Healthcare Act’s Medicaid expansion violated the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply. The Court described Congress’ inappropriate financial inducement as follows:
“It is a gun to the head.” The Court held “It is enough for today that wherever that line may be, this statute is surely beyond it.” The Court went on to state that Congress is not free to penalize States that choose not to participate in the new program by taking away their existing funding.