Challenges To Affordable Care Act Not Over, Including One More From Indiana

Jul 1, 2015

Attorney General Greg Zoeller says he'll pursue another challenge to the Affordable Care Act, which has already survived two reviews by the U.S. Supreme Court.
Credit Brandon Smith / Indiana Public Broadcasting

The U.S. Supreme Court’s ruling upholding the Affordable Care Act's tax subsidies was a major victory for the Obama administration. The healthcare law is now two-for-two surviving challenges before he nation’s highest court. Butother lawsuits that could gut the bill still loom -- including a challenge out of Indiana.  

Muncie resident Lisa Clevenger is one of thousands of Americans who celebrated the Supreme Court decision that upheld federal subsidies in all states, regardless if they had created their own exchange. Clevenger, who receives the subsidies, says she is thankful because she remembers what it was like before that assistance was available.

“You talk about rolling change to finally make your electric bill because you had to pay for your health costs, yeah that’s a big deal,” Clevenger says.

Clevenger says the battle over the health care law has been frustrating as a beneficiary of the program. She hopes lawmakers will move beyond the same old debate.

“Maybe that’s our break, our relief to look at, OK, now let’s improve the situation instead of leaving it the same and you just run into this repeating circle, repeating circle,” she says.

But the Affordable Care Act still faces other judicial threats. Indiana and 39 of its school corporations are suing the IRS, Department of Labor and the Treasury Department over what it calls an intrusion of the Tenth Amendment. 

"This is fundamentally an issue of states’ rights," says Jim Hamilton, an attorney with Indianapolis law firm Bose McKinney and Evans who represents the schools in the suit.

His case focuses on the employer mandate in the Affordable Care Act that requires large employers to provide health insurance for all workers who clock 30 or more hours a week. If they work over that threshold and don't receive healthcare, the IRS can penalize the employer two thousand dollars per employee.  Hamilton says that fee is a tax and therefore violates the state's sovereignty.

"We believe that the federal government should not have the authority to directly tax these local units of government and effectively cause staffing changes the way they have," he says.

Schools in the state have scaled back the hours of bus drivers, cafeteria workers and teacher aides an average of six hours to ensure they don't work more than 29 a week.

"When these are very low income people, every hour counts and those are hours for which they are not getting paid and they are for which they are not spending time with their kids."

The lawsuit also included an argument against subsidies in states with federal exchanges, but that was defeated in Thursday's ruling. Still, Indiana Attorney General Greg Zoeller says he will pursue the case, which was put on pause last October in anticipation of the recent ruling.

But IUPUI law professor and co-director of the school's Center for Health Policy David Orentlicher says the case has a one percent chance of succeeding. He says the $2,000 fee is not a tax, but a fine and within the federal government's rights. 

"State governments as employers are not immune from rules like that because they're government because they're just being treated in the same way as any other employer," Orentlicher says.

Orentlicher notes there are a couple of judicial risks to the law moving forward. The Obama administration has delayed major portions of the Affordable Care Act and a case from last year notes that the law, which raises taxes, was crafted in the Senate, not the House like the Constitution requires.

For the most part, though, Orentlicher says Americans relying on the Affordable Care Act no longer need to worry about legal challenges. He says the bigger issue for the landmark health care law is the 2016 election.