On Monday, March 26 through Wednesday, March 28, 2012, the U.S. Supreme Court will hear oral arguments in the cases challenging the validity of the Health Care Reform Law, the Patient Protection & Affordable Care Act (“Affordable Care Act”), which some call “Obamacare.” The Court is not expected to issue its decision in the matter before late June, 2012.
The Issues and Arguments Before the Court
The four basic issues and arguments before the Court, in the order in which they are likely to be heard by the Court, are:
- The Anti-Injunction Act Issue: Is the Challenge to the Individual Insurance Mandate Barred as Premature? Is the challenge to the individual insurance mandate (which is to be enforced starting in 2014 by a penalty in the nature of a tax) premature until the government actually enforces the mandate and its penalty in 2014?
The federal Anti-Injunction Act, 26 U.S.C. §7421(a), prohibits court challenges to taxes before they go into effect. The question presented is whether the penalty that will enforce the individual insurance mandate starting in 2014 under the Affordable Care Act is indeed a “tax” under the federal Anti-Injunction Act. If so, arguably the federal courts would be barred under the Federal Anti-Injunction Act from hearing and deciding a challenge to the individual insurance mandate until the government actually enforces the mandate and its penalty in 2014.
The Fourth Circuit Court of Appeals dismissed litigation challenging the health care law, on these and other procedural grounds. The Supreme Court included the federal Anti-Injunction Act issue in its review.
In their briefs to the Supreme Court, both the Government and the challengers of the health care law have taken the position that the federal Anti-Injunction Act does not bar the Court from deciding the merits of the constitutionality of the individual insurance mandate at this time. Because all parties to the actual litigation take the position that the federal Anti-Injunction Act does not apply, the Supreme Court appointed a special counsel, Robert A. Long Jr., to argue the position that the challenge is barred.
If the Court were to accept these arguments, it could essentially “punt,” refusing to decide the constitutionality of the insurance mandate at this time. This would leave time for Congress to act further to clarify the issues surrounding the mandate before it goes into effect in 2014.
- The Constitutionality of the Individual Insurance Mandate (called the Minimum Coverage provision) in the Affordable Care Act. Is the individual insurance mandate in the Affordable Care Act (requiring most people to purchase health insurance starting in 2014 or pay a penalty) constitutional within Congress’ power under the Commerce Clause of the U.S. Constitution?
The Government argues that Congress imposed the individual insurance mandate in the Affordable Care Act as part of permissible regulation of the national health insurance market and of the way in which consumers access the health care market. This was well within Congress’ Constitutional power to regulate interstate commerce under the Commerce Clause of the U.S. Constitution, the Government argues, pointing out that the power of Congress under the Commerce Clause has historically been interpreted extremely broadly by the Supreme Court.
The Government presents legislative history showing that Congress imposed the individual insurance mandate and other regulations in the Affordable Care Act for the purpose of redressing the significant health and economic costs of leaving nearly 50 million uninsured in the U.S. The uninsured obtain free health care in hospital Emergency Rooms at the expense of health care providers and consequently, all other health care consumers, who suffer the passed-along increased costs. This has driven up the cost of health care, led insurers to cut costs by denying coverage to persons who are sick, deemed to have “pre-existing conditions,” or exceed arbitrary caps imposed in fine print in health care policies, and in turn has produced a dangerous spiral of an ever-increasing number of uninsured, the data included in legislative history cited by the Government showed.
In the Affordable Care Act, Congress addressed these wrongs by requiring all health insurance companies, starting in 2014, to provide coverage to those who are sick or have pre-existing conditions, and imposing limits on the caps insurance companies can impose on coverage and on the profits they can take under health insurance policies. Congress realized that unless all individuals are required to purchase health insurance, people would tend to wait until they get sick to purchase insurance, which would leave health insurers with unsustainable costs if they were required to insure only sick people and not limit their coverage.
Therefore, in order to impose the new requirements on health insurers without bankrupting them or forcing them to raise insurance premiums to unacceptable levels, Congress determined that is was necessary to require all health care consumers, starting in 2014, to purchase and maintain health insurance. And, Congress provided expanded Medicaid coverage and other financial assistance to help those unable to afford insurance, as well as insurance exchanges and other provisions to assure the availability of affordable insurance policies to all. This regulation of the way in which consumers access health care, the government argues, was well within Congress’ accepted powers under the Commerce Clause of the U.S. Constitution, as previously interpreted by the U.S. Supreme Court.
The challengers to the law argue that Congress exceeded its authority under the Commerce clause in requiring individual consumers to purchase a product, individual insurance coverage. They argue that the Commerce Clause allows Congress to regulate economic “activity,” not “non-activity,” asserting that failure to purchase health insurance is not an economic “activity.” (The Government counters that choosing not to purchase health insurance, such that one will inevitably access free health care at the expense of providers and thereby other consumers, is in itself “economic activity” which has substantial effect on the health care and health insurance markets.)
The challengers of the law further argue that if the individual insurance mandate were to be upheld, there would effectively be no limit on Congress’ power under the Commerce Clause, which they say would violate the 10th Amendment of the Constitution. The 10th Amendment leaves to the States all powers not specifically granted to Congress by the Constitution.
The Government counters these arguments, and also argues that imposition of the mandate, supported by a penalty in the nature of a tax, is further within Congress’ authority under its Taxing Powers provided in the Constitution.
- The Severability Issue. If the individual insurance mandate were to be stricken down as unconstitutional, is the remainder of the law legally “severable” so that it could still stand and remain in effect?
The challengers to the law argue that the mandate is not severable, and the entire Affordable Care Act, which is hundreds of pages long and includes many provisions not directly related to the individual insurance mandate, must fall.
The Government argues that if the mandate falls, then two of the most popular provisions of the law would be unsustainable and would also have to fall, but the rest of the law should survive. The most significant part of the law that the Government says would be unsustainable and have to fall if the mandate is stricken, is the requirement that health insurance companies must provide coverage even if an individual is sick and has a pre-existing condition.
“As Congress’ findings recognized, those provisions would create a serious adverse selection problem without a minimum coverage provision, producing higher costs and less insurance. They are therefore inseverable,” the Government argues.
The court has appointed a special counsel to argue a third position, which was taken by the Eleventh Circuit Court of Appeals — that even if the individual insurance mandate were to be stricken as unconstitutional, every other provision of the law must still stand and remain in effect. The Eleventh Circuit included in its opinion an extensive discussion and summary of all of the other provisions in the Affordable Care Act, which that Court upheld.
- The Constitutionality of the Medicaid Expansion Provision. Is the expansion of Medicaid that is mandated in the Affordable Care Act within Congress’ Power under the Spending Clause of the U.S. Constitution?
In the Affordable Care Act, Congress required the States starting in 2014 to expand eligibility for Medicaid – a joint federal-state program – to cover all persons younger than 65 with incomes up to 133% of the poverty level. This requirement was imposed as a condition to the States’ continuing to receive federal funding for Medicaid. The law provides that the Federal government will provide 100% of the funding for this expansion of Medicaid until 2017, when the states are to pick up 5% of the expansion costs, increasing to 10% of the costs by 2020.
The 26 States opposing the Affordable Care Act, challenged this Medicaid expansion as an invasion of “states’ rights” in their litigation before the Eleventh Circuit, and again in their arguments to the Supreme Court. The Eleventh Circuit Court of Appeals ruled against them, upholding the constitutionality of the Medicaid expansion.
The Government cites established authority, as did the Eleventh Circuit, holding that it is well within Congress’ powers under the Spending Clause of the Constitution to condition its spending, such as its funding of the Medicaid program, upon States’ acceptance of certain requirements of the program imposed by Congress. If States do not wish to accept these conditions to receiving federal monies for a federal program, they can opt out, and do not have to accept the federal money.
Moreover, when federal Medicaid legislation was first enacted, Congress specifically reserved the right to change the program or impose additional conditions upon its funding of the program in the future, and in accepting federal Medicaid funds, the States have accepted these provisions.
For further discussion of these issues before the Court, and a more detailed explanation the history of the litigation over the Affordable Care Act, and the possible outcomes before the Supreme Court, see the previous report by HelpingYouCare™ on What Issues Will the Supreme Court Decide on the Health Care Law?
The Extent of Oral Arguments; Links to the Briefs Filed With the Supreme Court
In an Order issued on February 21, 2012, the Supreme Court has allotted a total of 90 minutes to oral arguments of the federal Anti-Injunction Act issue, 2 hours to oral arguments on the Constitutionality of the individual insurance mandate, 90 minutes to oral arguments on the Severability issue, and one hour to oral arguments on the Constitutionality of the Medicaid expansion provisions.
All of the briefs filed by the parties with the Supreme Court are linked on a page of the Supreme Court’s website pertaining to the Affordable Care Act litigation.
For more information on the litigation over the Affordable Care Act, and the split decisions previously issued by the Sixth Circuit, Eleventh Circuit, Fourth Circuit, and DC Circuit Federal Courts of Appeals in the litigation, as well as previous lower federal court decisions in the matters, see the previous reports by HelpingYouCare™ on:
See also SCOTUSblog’s page of resources on the Affordable Care Act litigation and Health Care issues.
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Editor’s Note: The author of this article, Constance R. Barnhart, is a practicing attorney at Barnhart Law PLC, who has 30 years of experience practicing at large law firms. She is admitted to practice law in New York, Florida, Texas and Minnesota.
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