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Justice Department switches sides, urging Supreme Court to uphold Obamacare

Texas and 17 other GOP-dominated states urged the court in November to rule that Obamacare's individual mandate is unconstitutional.
Image: Pedro Rojas holds a sign directing people to an insurance company where they can sign up for the Affordable Care Act, also known as Obamacare
A sign directs people seeking help signing up for health insurance under the ACA, in Miami in 2015.Joe Raedle / Getty Images file

The Justice Department notified the Supreme Court on Wednesday that it no longer supports the effort by Texas and other red states to declare the Affordable Care Act unconstitutional.

“Following the change in administration, the Department of Justice has reconsidered the government's position in these cases,” the department said in a letter to the court.

Texas and 17 other Republican-dominated states urged the court in November to rule that Obamacare's requirement for nearly all Americans to obtain health insurance or pay an income tax penalty — known as the individual mandate — is unconstitutional. For that reason, they said, the entire law must be scrapped.

The Supreme Court first upheld the health care law in 2012, finding that the mandate was a legitimate exercise of Congress's taxing authority. But in 2017, the Republican-led Congress set the tax penalty at zero. That led red states to argue that because the tax had been effectively eliminated, the revised law could not be saved as a tax and was therefore an unconstitutional effort to require all Americans to obtain something.

When the case was argued, a week after the presidential election in November, the Trump administration agreed with the red states and urged the court to strike the law down.

But the government, as expected, switched sides when President Joe Biden was elected. “After reconsideration of the issue, it is now the position of the United States that the amended Section 5000A [the individual mandate provision] is constitutional,” the Justice Department letter said, signed by Edwin S. Kneedler, the deputy solicitor general.

That puts the government on the same side as California and several blue states that are defending the law. They argued that with the tax penalty changed by Congress to zero, there effectively is no individual mandate, so the law is not unconstitutional. It may encourage Americans to buy insurance, but it does not require anyone to do anything, they argued.

And even if the court finds that provision to be unconstitutional, the government's letter said, it can be cut out of the bill, leaving the rest of it intact.

The court will issue its ruling by this spring.