Despite including a tax, Obamacare doesn’t violate the Constitution’s requirement that all tax bills originate in the House of Representatives, a key appeals court said Tuesday in a ruling that gives the Obama administration a health care win before the courts.
A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia said that the Obamacare tax was “incidental” to the primary purpose of the Affordable Care Act, so it isn’t a revenue-raising measure as envisioned by the Constitution.
“Some exercises of the taxing power are not subject to the Origination Clause,” the unanimous panel concluded.
Attorneys behind the challenge vowed to appeal the decision to the Supreme Court, setting up yet another high-level battle over Obamacare after the justices last month weakened the administration’s birth control mandate, and another panel of the D.C. circuit said Obamacare’s subsidies should not be flowing to two-thirds of the nation.
The origination issue had been in doubt after Chief Justice John G. Roberts Jr.’s surprise decision two years ago saying that while Obamacare’s “individual mandate” wasn’t allowed under Congress’s powers to control interstate commerce, it was valid as an exercise of lawmakers’ taxing power.
Since the key language of Obamacare came from the Senate, opponents then said it violated another part of the Constitution, the “origination” requirement that requires tax bills — or, more specifically, revenue-raising measures — to begin in the House.
But the judges ruled Tuesday that not all bills that increase taxes are considered revenue-raising bills. They said the tax must be the primary purpose.
“In interpreting the Origination Clause, the Supreme Court has held from the early days of this nation that ‘revenue bills are those that levy taxes in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue,’” the judges ruled.
Tuesday’s case involved plaintiff Matt Sissel, a Washington state artist who also served part-time in the National Guard.
Mr. Sissel said he did not want to pay for health coverage, as required by Obamacare, and that he could pay for his medical expenses out of pocket, according to court papers.
Paul J. Beard II, principal attorney for the Pacific Legal Foundation that argued the case, said they were disappointed in Tuesday’s decision and will ask the entire D.C. circuit to review the case.
“We think they got the merits portion of it wrong, that this actually was a bill for raising revenue,” he said in an interview.
SEE ALSO: States confident on Obamacare subsidies despite rulings of courts
Legal scholars say origination clause challenges, historically, have been a tough sell in the courts. Indeed, it is “very rarely litigated,” said I. Glenn Cohen, a health expert at Harvard Law School who said “it has only been considered by the U.S. Supreme Court a handful of times.”
Last week, the D.C. circuit issued a ruling that dented Obamacare, with another three-judge panel deciding that the health law’s insurance subsidies can only be paid to individuals who sign up in states that run their own exchanges. That excludes the two-thirds of states that opted to rely on the federal HealthCare.gov exchange instead.
The 2-to-1 decision featured a pair of Republican-appointed judges in the majority and a Democrat appointee in dissent. Hours after their ruling, three Democratic appointees on the 4th Circuit in Richmond unanimously sided with the Obama administration’s position that subsidies should flow to all states.
Tuesday’s ruling continued that partisanship trend, with three Democratic appointees finding in favor of the administration.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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