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Obamacare survives SCOTUS, but can it survive mathematics?

For the third time, the U.S. Supreme Court has issued a ruling that finds a way to allow the Affordable Care Act to survive.

Last Thursday the justices handed down their decision in California v. Texas, in which a number of states and some individual plaintiffs contended that the law known as Obamacare is unconstitutional. The court did not rule on the merits of the claim. Instead, the justices concluded that the states and the individual plaintiffs did not have standing to bring the lawsuit because they had not been harmed by the law. That opens the door for a future lawsuit by different plaintiffs.

This case had its origins in the 2017 Tax Cut and Jobs Act, which lowered the penalty for failing to buy individual health insurance from $695 to zero. In 2012, a divided Supreme Court had upheld the ACA based on Chief Justice John Roberts’ characterization of the penalty as a tax, finding that Congress’ power to levy taxes gave it the constitutional authority to enact an unprecedented law that required Americans to buy health insurance.

Without the penalty, there was no tax, and that prompted Texas and other states to challenge the law again. A federal district judge agreed with Texas and found that the elements of the law were inextricably and financially intertwined: absent a penalty to enforce the individual mandate, the law was materially different than the law Congress had passed.

For example, the cost to businesses resulting from the mandate to buy employee health policies might be far higher than Congress anticipated when requiring it. The judge ruled that the entire law must fall along with the individual mandate.

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