supreme court
The U.S. Supreme Court justices Wednesday concluded hearings on the health care law with arguments on an expansion of Medicaid. REUTERS/Jonathan Ernst

WASHINGTON -- The justices of the U.S. Supreme Court appeared ready Monday to decide the health care law this year during arguments about their authority to hear the case.

On the opening day of historic arguments at the high court, the justices considered their own authority to hear legal challenges to the Affordable Care Act, under a little-known law called the Tax Anti-Injunction Act of 1867.

That law prohibits people from filing lawsuits challenging taxes before they are levied; the Affordable Care Act's tax penalty for failing to obtain health insurance, paid to the IRS, goes into effect in 2014.

Obama Administration: It's A Tax Penalty

The Obama administration says the tax penalty is just a way to get people to carry health insurance, not to raise revenues for the Treasury. Meanwhile, opponents of the health care law argue the lawsuit goes after the mandate requiring insurance coverage, not its enforcement mechanism.

The Supreme Court tapped laywer Robert Long to argue that the justices should wait before they hear the Affordable Care Act case. The justices poked through his arguments with pointed questions about court jurisdiction and the nature of the tax penalty being debated.

Justice Stephen Breyer seemed to side with the Obama administration's characterization of the mandate's tax penalty, even though the law says it must be assessed and paid like a tax, through the Internal Revenue Service.

Here, Congress has nowhere used the word 'tax.' What it says is penalty, Breyer said to Long. If it's being collected in the same manner as a tax [that] doesn't automatically make it a tax, particularly since the reasons for the AIA are to prevent interference with revenue sources.

Justice Elena Kagan noted the fees and penalties in the health care law, like one for pharmaceutical makers or certain health care plans, that Congress specifically placed under the Anti-Injunction Act.

It does not say that here, Kagan said of the individual mandate. Wouldn't that suggest that Congress meant for a different result to obtain?

The justices were also skeptical of Long's arguments that letting the Affordable Care Act case continue would open the floodgates for taxpayers to file lawsuits in federal courts, instead of asking the Treasury Department for a refund and then going to court to win back the money with interest.

The justices seemed content with letting the lower federal courts deal with that potential problem. Justice Anthony Kennedy said a judge could determine if someone challenging a tax had exhausted all administrative options before heading to court.

Alito: Today You Argue It's Not A Tax, Tomorrow You'll Say It Is

There was still rhetorical firepower left for President Barack Obama's point man on the Affordable Care Act defense, Solicitor General Donald Verrilli.

When Verrilli said the penalty is a valid exercise of Congress' taxing power, even though it is not technically called a tax, Justice Samuel Alito quipped, Today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax.

Ilya Shapiro of the libertarian Cato Institute said in a statement the day's arguments were the calm before the storm on Tuesday, when the justices consider the constitutionality of the individual mandate, the centerpiece of the health care law and its most controversial provision.

It quickly became clear that the Supreme Court would reach the constitutional issues everyone cares about, Shapiro said. That is, regardless of how the justices resolve the hyper-technical issue of whether the Anti-Injunction Act is 'jurisdictional,' this law -- which prevents people from challenging taxes before they're assessed or collected -- does not apply to the Obamacare litigation.