The Affordable Care Act and The Origination Clause

Forgive me if I’m starting to sound like a broken record, but the Supreme Court is being asked to hear yet another challenge to Obamacare. The Court has already decided three cases challenging aspects of the landmark healthcare law, and it will hear argument in a fourth next year.

Now, the Court faces a new challenge, this one attacking the process by which Obamacare was adopted. The Justices are waiting for responses before deciding whether to hear the new case.

This latest challenge revolves around a provision in the Constitution called the Origination Clause, which reads, in its entirety: “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.” When a federal court of appeals decided the case, a majority of the judges said Obamacare was not a bill for raising revenue, and so was not subject to the Origination Clause. Several judges disagreed, but they said Obamacare complied with the Origination Clause by originating in the House of Representatives. The challengers, of course, say Obamacare was a bill for raising revenue and did not originate in the House.

Photo Credit: University of Illinois college of Law

Those seem like easy questions, so how could there be so much disagreement? First, the Supreme Court has decided a few cases under the Origination Clause, and those decisions make clear that not every bill that raises some revenue counts as a “Bill for raising Revenue.” Some bills, the Court has said, primarily accomplish other goals, such that raising revenue is in some sense subordinate.

So one part of the fight in the new case is about how and where to draw that line. Obamacare includes tax provisions that stand to raise a lot of revenue—recall that the Court upheld Obamacare’s individual mandate as an exercise of Congress’s taxing power. But the court of appeals said it’s really a law about reforming health care insurance and financing, so that the revenue provisions don’t subject it to the Origination Clause.

Second, Obamacare did technically originate in the House of Representatives. The Senate took an unrelated House bill, deleted everything of substance, and replaced it with the then-current version of Obamacare. So the second part of the case is about whether that “gut and replace” procedure complies with the constitutional language allowing the Senate to propose amendments to revenue bills that must originate in the House. The challengers say allowing such a transparent procedural workaround would rob the Origination Clause of any real effect.

The fact that all the court of appeals judges agreed that Obamacare complied with the Origination Clause should make it harder for the challengers to convince the Supreme Court to hear the case. Often the Court waits to hear an issue until there are conflicting decisions in the courts of appeals. But some members of the Court might want to weigh in to clear up the conflicting reasoning in the lower court opinions. Add to that the big-ticket political overlay of Obamacare, and I wouldn’t bet a lot of money against the Court’s taking the case.