The Patient Protection and Affordable Care Act of 2010, better known as Obamacare, was designed to patch the insurance gaps between Medicare, Medicaid, and employer-sponsored health care, which is bolstered by a tax carve-out for workplace benefits. Obamacare was barely two years old when it faced its first challenge at the Supreme Court.
A decade after that first challenge, the law remains on the books. But the outcome of that case has shaped both the health law's evolution and its public perception, leaving Americans with a major federal program that even its fiercest advocates say does not live up to its goals.
The justices heard arguments for and against the constitutionality of Obamacare's health insurance mandate, which required every American who did not qualify for an exemption to carry federally approved health insurance. They also considered arguments over the law's mandatory expansion of Medicaid, which penalized noncompliant states with a massive clawback of federal funds.
A year earlier, Judge Roger Vinson of the United States District Court for the Northern District of Florida had struck down the individual mandate and declared that, because it was central to Obamacare, the entire statute should fall. Many observers expected the Supreme Court to likewise rule against Obamacare. They thought the only question was whether the Court would strike down just the mandate or the entire sprawling bill.
As it turned out, the vote was 5–4 to save the mandate. In a strained opinion that would remain controversial for years, Chief Justice John Roberts wrote that the mandate could not be justified under the Commerce Clause, because the power to regulate interstate commerce does not include the power to compel commercial activity—in this case, the purchase of government-approved medical insurance. But because people who failed to comply with the mandate were subject to an IRS-administered financial penalty, he said, the provision could be upheld as an exercise of Congress' taxing power.
In media appearances making the case for the health care law, President Barack Obama had insisted the mandate was not a tax. But according to the Supreme Court majority, that's exactly what it was—and what made it constitutionally permissible.
At the same time, the Court ruled that the federal government could not withhold all Medicaid funds from states that refused to participate in the program's expansion. That penalty, seven justices agreed, was a "gun to the head" that violated the anti-commandeering principle, which bars Congress from forcing states to participate in federal programs.
The Medicaid expansion thus became purely optional. Initially, red states were especially slow to expand. A decade later, a dozen states, including Georgia, Texas, and Florida, still have not expanded their Medicaid programs in line with Obamacare.
The Court's rulings on the mandate and on Medicaid expansion have inspired additional patches for America's health care system. A 2021 Democratic proposal promoted under the "Build Back Better" label, for example, would have created an additional layer of federal health coverage for states that have not expanded Medicaid. But that effort was complicated by internal Democratic Party dynamics: As the bill's total price tag was whittled down throughout the year, some Democrats wondered why scarce resources should be used to fund coverage for mostly Republican states that had explicitly rejected it.
Meanwhile, the individual mandate, once the subject of so much controversy, has all but fallen away. Although the rule is still on the books, the GOP-backed Tax Cuts and Jobs Act of 2017 reduced the penalty to zero, rendering the tax meaningless and the mandate unenforceable.
Through all of this, a general air of dissatisfaction with the law has persisted, even among Democrats. The law was passed with the promise that it would make insurance affordable and accessible. Yet when Obama returned to the White House to celebrate the law's 12-year anniversary in April 2022, he remarked upon its failure to fully achieve those goals.
"Even today, some patients still pay too much for their prescriptions," Obama said. "Some poor Americans are still falling through the cracks….Some working families are still having trouble paying for their coverage."
Even the law's namesake could not help but acknowledge reality. Patients still were not protected, and care still was not affordable. The patchwork program would need more patches.