By: Rebecca Herzberg
Volume X – Issue II – Spring 2025
I. BACKGROUND
Since 2010, there have been over 2,000 legal challenges to the Affordable Care Act (ACA), also known as “Obamacare,” including seven lawsuits that have reached the Supreme Court of the United States (SCOTUS) [1]. There have been various obstacles to implementing the ACA due to conflicts between the federal government and the states tasked with administering it [1]. President Trump has also posed a substantial barrier to the ACA’s execution, and Congress also has proven itself to be an adversary at times to the ACA [1]. These legal and non-legal challenges have slowly chipped away at certain aspects of the ACA, removing significant portions of its original mandate [1].
Despite its widespread popularity among the American public, demonstrated by 41 states adopting Medicaid expansion and KFF’s finding of 64% favorability of the ACA among adults as of April 2024 [2], the ACA has continued to face disputes. In February 2025, the House passed a budget calling for $2 trillion in spending cuts and specifically asking the Energy and Commerce Committee—which oversees Medicaid—to cut $880 billion [3]. In April 2025, the House passed a revised Senate budget which was less explicit about the amount or target of spending cuts [4]. As these potentially severe budget cuts loom, a recent poll found that the majority of Trump supporters and ⅔ of swing voters were opposed to cutting Medicaid [5][6]. However, Georgetown Law describes the ACA as “the most challenged statute in American history” as a result of the thousands of lawsuits of varying nature that have been brought against it, with the act’s breadth of coverage allowing significant room for controversy [7].
While the ACA was initially met with great backlash and hesitancy, its ability to withstand various lawsuits has strengthened its mission and ability to provide health care coverage. In King v. Burwell (2015), SCOTUS sided with the government to ultimately uphold a particular aspect of the ACA [11]. Chief Justice Roberts stated, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter” [11]. The highest court in the land reaffirmed the ACA intended to improve health insurance markets, and Justice Roberts acknowledged his obligation to carry out this goal [11].
This paper will describe and analyze three major challenges to the ACA that reached SCOTUS and ultimately shaped the ACA into how we know it in the present. After reading this paper, readers should have a better understanding of the various oppositions the ACA has faced and how courts have responded. As the current political landscape threatens the future of the ACA, it is important to look back on its past challenges to understand its establishment in the law.
II. THE ACA AND SCOTUS: TRACING THE ACA’S LEGAL CHALLENGES
i.National Federation of Independent Business (NFIB) v. Sebelius (2012)
This lawsuit was the first major test of the strength and stability of the ACA. Occurring just two years after the passage of the ACA, this case originated in the 11th Circuit. It was raised by 26 states, several individuals, and the namesake of the case—the NFIB—against Kathleen Sebelius, the Secretary of Health and Human Services (HHS) at the time [8].
a. Individual Mandate
The primary challenge of the case was the ACA’s individual mandate. This mandate was created to serve as a penalty in the form of a tax for individuals who failed to get health insurance through their employer, private company, or Medicaid expansion [8]. The idea of strongly urging all Americans to get health insurance revolves around the mechanism through which health insurance functions: pools of money. The more people enroll, the more money there is in the pool. Whenever someone gets sick and has medical expenses, the insurance will pull from this pool to pay. If the majority of the people in the pool are very sick, there will constantly be a lack of money in the pool. If there is a balance of healthy and sick people, the pool will stay filled when some individuals get sick. This mandate aimed to increase the number of healthy, young Americans in insurance pools who otherwise may not get health insurance [8].
b. Medical Expansion
The ACA’s promise to expand access to health insurance largely relied on Medicaid expansion through which the qualifying federal poverty level was adjusted from 133% to 138% [9]. If a state chose to not expand coverage, they would not only not receive the additional funds the federal government offered to fund Medicaid expansion, but they would also lose their existing Medicaid funds [9]. The states strongly opposed this clause because they felt it infringed on the dedicated separation of federal and state government. At this point, Medicaid was responsible for 10% of states’ revenue [9]. Ultimately, the court amended this act to protect existing Medicaid funds but allowed Sebelius to withhold additional funds for expansion from states that did not expand [10].
c. Commerce Clause Argument
The Commerce Clause gives Congress the responsibility of protecting and regulating interstate commerce [11]. In this suit, the government argued that the medical costs of the interconnectedness of the vast U.S. Health Care System gave the government authority to regulate its function. Specifically, the ACA addressed the issue of uninsured individuals, leading to higher costs for hospitals, which caused higher costs for insurers and ultimately higher premiums for the American public [10]. Ultimately, this clause was struck down because SCOTUS found that this clause was intended to be applied to ongoing “activity” whereas its function in the ACA intended to encourage engagement in an activity. Congress cannot regulate individuals, much less punish them, for not doing something [10].
d. Congress’ Power to Tax Argument
The government argued that the individual mandate tax—which was a shared responsibility payment—mirrored a traditional tax. It is paid with one’s tax returns and then assessed and collected by the IRS, resulting in revenue for the government [8]. Ultimately, this argument was found satisfactory [8].
ii.King v. Burwell (2015)
This lawsuit focuses on the legality of the IRS granting tax credits under the Exchanges created under the ACA and questions the use of Chevron deference as a rationale for the IRS’s actions [13]. The petitioners were four residents from Virginia—a state that did not create its own Exchange. This decision meant the Secretary of Health and Human Services (HHS) was required to establish a federally operated Exchange in the state [13].
Under the description of the Individual Mandate, if the lowest possible plan on a state’s Exchanges is greater than eight percent of a person’s expected annual income, the individual is no longer required to purchase insurance [13]. These guidelines created an environment in which Virginia residents such as the petitioners were not obligated to purchase insurance. However, once the tax subsidies were applied to the available insurance programs under the ACA, these residents were eligible to purchase insurance [13]. These residents challenged the subsidies due the Virginia Exchange being federally operated, and they understood the ACA to only permit the IRS to grant subsidies to “state-run” Exchanges [13]. The district court dismissed this lawsuit. The 4th Circuit then affirmed this dismissal. Finally, SCOTUS granted a Writ of Certiorari [13].
a. Exchanges
The Exchanges are a key part of the ACA intended to expand health insurance coverage. An “Exchange” is a website in which private health insurers may post their different plans for residents of a given state [14]. For every insurance plan, beneficiaries are potentially eligible for a tax subsidy based on their income. These Exchanges are open to all residents, however, the actual subsidy one receives is based on their income. Individuals who are low-to-middle income and do not receive health insurance from their employer or were offered plans exceeding 9.5% of their income by their employer are given priority in the generosity of subsidies [14]. While these Exchanges are state-operated, the subsidies are federally funded [15]. The Exchanges promote competition amongst insurers, resulting in lower premiums for potential beneficiaries [16]. The wide reach of the Exchanges attracts more insurers to join the website [16].
b. ACA Sections 1311, 1321, & Internal Revenue Code of 1986 Section 36B
Section 1311 of the ACA entitled “Affordable Choices of Health Benefit Plans” required states to establish an Exchange by January 1, 2014 [17]. Section 1321 entitled “State Flexibility in Operation and Enforcement of Exchanges and Related Requirements” states that if a state fails to establish an Exchange by January 1, 2014, the Secretary is charged with creating and running an Exchange in that state [17]. The Internal Revenue Code of 1986, Section 36B is entitled “Refundable credit for coverage under a qualified health plan” and was created under the ACA [18].
c. Chevron Deference
This rule stated that if a piece of legislation produced by Congress was unclear, the final determination was left to the relevant agency rather than the courts [19]. It should be noted the Chevron deference was overturned in June 2024, but it is important to understand in this paper due to its relevance to the King v. Burwell case in 2015 [19]. SCOTUS created a two-part test to administer Chevron deference. First, judges will examine legislation to determine its clarity. If it is clear, the agency is to follow the legislation as written. If it is not clear, the court must follow the agency's interpretation of the legislation. The rationale is agencies are more qualified to make these topic-specific decisions than federal judges [20].
In King v. Burwell, the complaint argued that the IRS’s use of Chevron deference to permit tax credits, regardless of whether a state’s Exchange was state- or federally-run, was unlawful because Congress’ wording of the ACA was ambiguous [21]. However, the government argued that the ACA’s wording of “applicable taxpayers" made individuals' status determination independent of the state [21]. Since tax credit eligibility is based on household income as a percentage above the federal poverty level, it is irrelevant if the Exchange is run by the state or federal [21]. Furthermore, the government argued that when HHS established an Exchange under section 1321, it was the same as an Exchange created under section 1311 [21]. The ACA was always planned for tax credits to be available in every state [21]. Therefore, it is plausible that an Exchange in every state was necessary for the realization of this law, which in some cases requires HHS to run the Exchange if the state does not take charge [21]. Ultimately, SCOTUS ruled that Congress did not give the IRS authority to determine if tax credits applied to state and federal Exchanges [22]. However, SCOTUS found that Congress intended for tax credits to be available on both Exchanges [22].
iii. California v. Texas (2021)
In this case, Texas led a group of 20 states along with two individual plaintiffs in challenging the constitutionality of the ACA as a result of a portion altered by the Tax Cuts and Jobs Act of 2017 (TCJA) [23]. This case threatened the entire existence of the ACA [24]. Among many other changes, one of the most distinct changes brought by the TCJA effectively repealed the individual mandate penalty (26.U.S.C. §5000A) of the ACA by setting the penalty to zero dollars [25][26][27]. Plaintiffs argued this reform effectively made the individual mandate penalty unconstitutional since a zero-dollar penalty could no longer be considered a tax, and, therefore, Congress’ power to tax was no longer a sufficient line of reasoning for this portion of the law [28]. Furthermore, Texas argued that the remainder of the ACA was “not severable” from §5000A. Texas and the other state plaintiffs complained of indirect injury due to the increased costs of running state medical insurance programs. Additionally, they complained of direct injury through increased administrative and associated expenses due to the individual mandate. The individual plaintiffs complained of pocketbook injuries [29]. To protect the ACA, California led a group of 17 states to intervene in Texas’ challenge [30].
a. 26 U.S. Code §5000A - Requirement to Maintain Minimum Essential Coverage
Following the passage of the ACA in 2010, individuals would be required to obtain a minimum level of health insurance beginning in 2013. If taxpayers failed to get health insurance, there would be a penalty imposed. This penalty would be equivalent to the national average premium for qualified health plans at the bronze level of coverage. Offenders received the penalty in their taxpayer return [31].
The federal district court found that the plaintiffs had standing and that individual mandate was unconstitutional. Furthermore, they found that the individual mandate could not be separate from the rest of the ACA, and proceeded to invalidate the ACA in its entirety. The 5th Circuit of Appeals upheld the district court’s decision since the individual mandate penalty failed “to produce at least some revenue for the federal government,” but returned the case to the district court for further consideration to determine if any part of the ACA could remain viable [33]. SCOTUS then granted California’s petition for review [34].
The first job of SCOTUS was to determine if the plaintiffs had standing. Then, they could determine if the TCJA made the individual mandate unconstitutional. Finally, if they found the ACA unconstitutional, SCOTUS would determine the extent of this decision concerning national unenforceability or limited provisions of enforcement [35]. Ultimately, the question of §5000A and the ACA at-large’s constitutionality was never ruled on by SCOTUS because the plaintiffs failed to demonstrate standing. Plaintiffs need to “allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief” [36]. The plaintiffs failed to do so, removing their ability to challenge §5000A. The zero-dollar penalty makes the individual mandate a noncompliance penalty. SCOTUS found that plaintiffs’ complaints of pocketbook injuries could not be attributed to the federal government. They also found that state plaintiffs lacked Article II standing in their complaint of indirect injury as they failed to demonstrate that the zero-dollar penalty would cause more people to enroll in health insurance. Additionally, plaintiffs unsuccessfully speculated and failed to prove “that third parties will likely react in predictable ways” [37]. SCOTUS noted that state plaintiffs' complaint of direct injury from administrative expenses was not a result of §5000A but other sections. In closing, SCOTUS reversed the Fifth Circuit’s judgment for lack of standing and dismissed the case [37].
III. CONCLUSION AND FUTURE CONSIDERATIONS
The ACA has had a tumultuous legal journey since its inception. Fundamental portions of this legislation have been upheld in SCOTUS only to be later dissected and virtually removed. For the past four years, the ACA Marketplace has continuously reached record highs. As of 2025, there are currently 23.5 million people enrolled. The states that have seen the greatest growth in enrollment (well over 200%) include Texas, Mississippi, West Virginia, Louisiana, Georgia, and Tennessee. [38] These states are all Republican-led. Despite the high demand for ACA’s services, its fate faces uncertain jeopardy. The future of the Biden-era tax credits which expanded the Exchanges’ subsidies has been described as “grow[ing] increasingly dim” under the 119th Congress. [39] These extended tax subsidies expire at the end of 2025. [40]
In addition to the Republican-controlled Congress’ ability to create changes to the ACA, President Trump also has significant power. “Costly” and “lousy” are adjectives President Trump has used to describe the ACA. [41] He can utilize various executive actions to alter the ACA. Possible changes could include establishing work requirements to change eligibility for Medicaid as well as modifying Marketplace rules. Additionally, he could add additional verification requirements for ACA plans— making it harder for individuals to sign up. [42] On March 10, 2025, the Centers for Medicaid & Medicaid Services released a document entitled “Marketplace Integrity and Affordability Proposed Rule.” [43] The goal of this rule according to federal officials is to “crack down on fraud in the program [Marketplaces].” [44] This guidance intends to promote the integrity of the Marketplaces through issuing standards. [45] If this rule is approved some proposals will go into effect as soon as 2026. [46]
The ACA has quickly become ingrained into the fabric of the United States over the past 15 years. It expanded insurance coverage to approximately 40 million people in 2010 and then increasingly more in 2014. [47] Legal precedent, the United States Code, and the Constitution have successfully defended its existence and protected key aspects of its services. The ACA’s great feat in NFIB v. Sebelius (2012) laid the groundwork that this historic statute was well-fortified and secure. Three years later, the ACA continued to prove its grit when it stood firm in King v. Burwell (2015) in plaintiffs’ attempts to use arguments of particular language to overturn it. Finally, and most recently, the ACA – though distinctly different in its composition following the TCJA of 2017 – survived an effort to completely invalidate it in its entirety in California v. Texas (2021). The ACA will likely continue to face various legal challenges in the coming years. Policymakers should consider the impact of the ACA on their constituents and acknowledge its growing importance in the lives of Americans. Widespread health insurance is a necessary policy that will bolster and grow the United States.
Endnotes
Ah! You’re right — the footnote list at the end is missing. Here’s the complete list of all 47 citations in the proper format for your blog post:
Footnotes
[1] Gluck, Abbe, Mark Regan, and Erica Turret. 2020. “The Affordable Care Act’s Litigation Decade.” Www.law.georgetown.edu. 2020. https://www.law.georgetown.edu/georgetown-law-journal/in-print/volume-108/volume-108-issue-6-june-2020/the-affordable-care-acts-litigation-decade/.
[2] Kaiser Family Foundation. 2019. “KFF Health Tracking Poll: The Public’s Views on the ACA.” The Henry J. Kaiser Family Foundation. November 20, 2019. https://www.kff.org/interactive/kff-health-tracking-poll-the-publics-views-on-the-aca/#?response=Favorable–Unfavorable&aRange=twoYear.
[3] Sanger-Katz, Margot, and Alicia Parlapiano. 2025. “The House Wants to Pass Trump’s Agenda in One Big Bill. Here’s What’s in It.” The New York Times, February 21, 2025. https://www.nytimes.com/interactive/2025/02/21/upshot/house-gop-budget-blueprint.html.
[4] Sanger-Katz, Margot, and Alicia Parlapiano. 2025b. “Here’s What’s in the House Republican Budget.” The New York Times, April 9, 2025. https://www.nytimes.com/interactive/2025/04/09/upshot/senate-vs-house-budget.html.
[5] Fabrizio, Tony, Bob Ward, and John Ward. 2025. “Memorandum.” https://modernmedicaid.org/wp-content/uploads/2025/04/MMA-Poll-Memo-4-2-25.pdf.
[6] Leonard, Ben. 2025. “Trump Pollster Finds Medicaid Cuts Unpopular among Trump Voters - Live Updates - POLITICO.” Politico. April 7, 2025.
[7] Gluck, Abbe, Mark Regan, and Erica Turret. 2020. “The Affordable Care Act’s Litigation Decade.” Www.law.georgetown.edu. 2020. https://www.law.georgetown.edu/georgetown-law-journal/in-print/volume-108/volume-108-issue-6-june-2020/the-affordable-care-acts-litigation-decade/.
[8] Legal Information Institute. 2012. “National Federation of Independent Business v. Sebelius (2012).” LII / Legal Information Institute. Cornell Law School. 2012. https://www.law.cornell.edu/wex/national_federation_of_independent_business_v._sebelius_(2012).
[9] Nicholson, Sean. 2023. “Medicaid, and The Affordable Care Act (ACA): Expanding Insurance Coverage, Part 2.” Public Policy 2350: The U.S. Health Care System. Fall, Cornell University. Class lecture.
[10] Legal Information Institute. 2012. “National Federation of Independent Business v. Sebelius (2012).” LII / Legal Information Institute. Cornell Law School. 2012. https://www.law.cornell.edu/wex/national_federation_of_independent_business_v._sebelius_(2012).
[11] Duke, Michael, and Edward Flores. n.d. “King v. Burwell.” LII / Legal Information Institute. https://www.law.cornell.edu/supct/cert/14-114.
[12] ArtI.S8.C3.1 Overview of Commerce Clause. 1898. “Overview of the Commerce Clause | Constitution Annotated | Congress.gov | Library of Congress.” Constitution.congress.gov. 1898.
[13] Duke, Michael, and Edward Flores. n.d. “King v. Burwell.” LII / Legal Information Institute.
[14] Nicholson, Sean. 2023. “Medicaid, and The Affordable Care Act (ACA): Expanding Insurance Coverage, Part 1.”
[15] Richards, Carson, and Sara Collins. 2025. “Enhanced Premium Tax Credits for ACA Health Plans: Who They Help, and Who Gets Hurt If They’re Not Extended.” Commonwealthfund.org, February. https://doi.org/10.26099/a84c-qg07.
[16] Nicholson, Sean. 2023. “Medicaid, and The Affordable Care Act (ACA): Expanding Insurance Coverage, Part 1.”
[17] “Public Law 111–148 111th Congress.” 2010. https://www.congress.gov/111/plaws/publ148/PLAW-111publ148.pdf.
[18] “26 USC 36B: Refundable Credit for Coverage under a Qualified Health Plan.” 2024. House.gov. 2024. https://uscode.house.gov/view.xhtml?req=(title:%20section:36b%20edition:prelim)%20OR%20(granuleid:USCprelim-title-section36b)&f=treesort&edition=prelim&num=0&jumpTo=true.
[19] Legal Information Institute. 2022. “Chevron Deference.” LII / Legal Information Institute. Cornell Law School. July 2022.
[20] Turrentine, Jeff. 2024. “What Happens If the Supreme Court Ends ‘Chevron Deference’?” Www.nrdc.org. June 28, 2024.
[21] Duke, Michael, and Edward Flores. n.d. “King v. Burwell.” LII / Legal Information Institute.
[22] "King v. Burwell." Oyez. https://www.oyez.org/cases/2014/14-114.
[23] Musumeci, MaryBeth. 2020. “Explaining California v. Texas: A Guide to the Case Challenging the ACA.” KFF. September 1, 2020. https://www.kff.org/affordable-care-act/issue-brief/explaining-california-v-texas-a-guide-to-the-case-challenging-the-aca/.
[24] Musumeci, MaryBeth. 2020. “Explaining California v. Texas: A Guide to the Case Challenging the ACA.” KFF. September 1, 2020.
[25] Legal Information Institute. 2022a. “Tax Cuts and Jobs Act of 2017 (TCJA).” LII / Legal Information Institute. Cornell Law School. May 2022. https://www.law.cornell.edu/wex/tax_cuts_and_jobs_act_of_2017_(tcja).
[26] SCOTUS. 2020. “CALIFORNIA et AL. V. TEXAS et AL.” https://www.supremecourt.gov/opinions/20pdf/19-840_6jfm.pdf?utm_source.
[27] Tax Policy Center. 2018. “How Did the Tax Cuts and Jobs Act Change Personal Taxes?” Tax Policy Center. 2018. https://taxpolicycenter.org/briefing-book/how-did-tax-cuts-and-jobs-act-change-personal-taxes.
[28] "King v. Burwell." Oyez. https://www.oyez.org/cases/2014/14-114.
[29] SCOTUS. 2020. “CALIFORNIA et AL. V. TEXAS et AL.” https://www.supremecourt.gov/opinions/20pdf/19-840_6jfm.pdf?utm_source.
[30] Musumeci, MaryBeth. 2020. “Explaining California v. Texas: A Guide to the Case Challenging the ACA.”
[31] Legal Information Institute. n.d. “26 U.S. Code § 5000A - Requirement to Maintain Minimum Essential Coverage.” LII / Legal Information Institute. Cornell Law School.
[32] SCOTUS. 2020. “CALIFORNIA et AL. V. TEXAS et AL.” https://www.supremecourt.gov/opinions/20pdf/19-840_6jfm.pdf?utm_source.
[33] Musumeci, MaryBeth. 2020. “Explaining California v. Texas: A Guide to the Case Challenging the ACA.” KFF. September 1, 2020.
[34] "King v. Burwell." Oyez. https://www.oyez.org/cases/2014/14-114.
[35] Musumeci, MaryBeth. 2020. “Explaining California v. Texas: A Guide to the Case Challenging the ACA.” KFF. September 1, 2020.
[36] SCOTUS. 2020. “CALIFORNIA et AL. V. TEXAS et AL.” https://www.supremecourt.gov/opinions/20pdf/19-840_6jfm.pdf?utm_source.
[37] SCOTUS. 2020. “CALIFORNIA et AL. V. TEXAS et AL.” https://www.supremecourt.gov/opinions/20pdf/19-840_6jfm.pdf?utm_source.
[38] Ortaliza, Jared, Justin Lo, and Cynthia Cox. 2025. “Enrollment Growth in the ACA Marketplaces | KFF.” KFF. April 2025. https://www.kff.org/policy-watch/enrollment-growth-in-the-aca-marketplaces/.
[39] Cirruzzo, Chelsea, and Kelly Hooper. 2025. “States Race to Offset the Loss of Obamacare Subsidies.” POLITICO. April 9, 2025. https://www.politico.com/newsletters/politico-pulse/2025/04/09/states-race-to-offset-the-loss-of-obamacare-subsidies-00279443.
[40] Cox, Cynthia. 2024. “What Trump’s 2024 Victory Means for the Affordable Care Act | KFF.” KFF. November 6, 2024. https://www.kff.org/quick-take/what-trumps-2024-victory-means-for-the-affordable-care-act/.
[41] Seitz, Amanda. 2025. “‘Obamacare’ Hits Record Enrollment