High Court Hears Health Law: What's up for debate?

The United States Supreme Court is gearing up for oral argument in what is sure to be a landmark case in American history – the multi-state challenge to the Affordable Care Act, the federal health reform law passed by Congress in 2009.  The court has scheduled an unprecedented six hours for oral argument over three days, the most time allocated to a single case since the 1960s.  Oral argument is the only interactive portion of the Court’s decision-making process, where attorneys from both sides state their case and take questions from the justices.  This post breaks down the issues scheduled for debate and summarizes each side’s position.

Day 1: Monday March 26th, 2012

The first day of argument will focus on a procedural question: are the states even allowed to bring suit over a portion of the law that hasn’t yet been enacted?  An existing federal law, the Anti-Injunction Act, prohibits challenging a tax prior to that tax being imposed.  Proponents of the Affordable Care Act argue that since the ‘individual mandate’ amounts to a tax that doesn’t take effect until 2014, this little-known law might actually pose a significant threat to the health law’s challengers.  As Stuart Taylor of the Brookings Institution wryly observes:

If the justices agree that the Anti-Injunction Act applies, this year’s case will be perhaps the greatest anticlimax in Supreme Court history. And, the justices’ assignment of a full hour of oral argument to this question suggests that some take this issue very seriously.

Day 2: Tuesday March 27th, 2012

The second day features the main event: the constitutionality of the so-called ‘individual mandate.’  The Affordable Care Act requires most adults to carry health insurance starting in 2014 or pay a penalty.  Challengers argue that this requirement is unconstitutional.  Lower court judges who have ruled the mandate unconstitutional cite a lack of precedent for Congress to require people to buy a commercial product, particularly if it’s against their will.

Yet, several prominent and staunchly conservative federal appeals court judges have upheld the mandate on commerce clause grounds.  The constitution’s commerce clause permits Congress to regulate economic activity amongst the states.  When the uninsured get medical treatment they can’t pay for, it’s ultimately taxpayers who foot the bill.  Thus, the uninsured are making an economic decision that largely impacts the residents and economies of all states and should be subject to regulation under the commerce clause.

Day 3: Wednesday March 28th, 2012

The court will also entertain debate about what should happen to the rest of the health care law if the individual mandate is struck down.  In other words, is the individual mandate severable, or should the entire law go down if it does.  This ‘severability’ question is highly technical and a bit thorny, but explained well by an industry association here:

The Affordable Care Act does not contain a severability clause. Severability clauses provide that the failure of one provision in an act of Congress does not affect the remaining portions of the act. The absence of a severability clause does not mean that provisions are not severable, but it can leave the decision regarding severability up to the courts.

So far, the lower courts have diverged regarding the severability of the individual mandate from the rest of the law, in different ways and for different reasons.  How the nine sitting Supreme Court Justices will rule is impossible to predict with certainty, but that hasn’t stopped anyone from trying.

The final day of argument will also consider a portion of the health law that many thought was out of reach of a legal challenge: the expansion of Medicaid eligibility to all working age adults up to 138 percent of the federal poverty level.  The suit alleges that the federal government is unconstitutionally “coercing” states into expanding Medicaid.  It’s an awkward argument on the part of the twenty-six states in the suit, given nearly a century of precedent upholding the federal government’s power to make federal funds to the states conditional upon certain requirements, as the Medicaid program has always done.  Health policy historian Timothy Jost points out:

[States] could hardly argue otherwise because the power of Congress to make conditional grants to the states has been recognized in Supreme Court precedent since the 1930s.  Federal government conditional grant programs are in fact pervasive, including not just health and welfare programs, but also programs providing federal assistance for education, transportation, infrastructure, and indeed homeland security.

But the states say that Medicaid, while technically not a compulsory program, isn’t functionally voluntary anymore either.  They argue that the new healthcare law makes participation in Medicaid all but mandatory because there is no alternative for states who want to drop the program.  More to the point, there is no alternative for the residents of those states who are eligible for Medicaid and required to carry insurance.

Speculation on how the Supreme Court will rule is rampant.  We likely won’t know the answer until June of this year, when the Court will issue its ruling and written opinions.  Oklahoma has suspended action on creating a state health insurance exchange, a required component of the Affordable Care Act, in hopes that the Court’s decision will slow the implementation of health care reform.  Given that health insurance exchanges aren’t being challenged in the pending lawsuit, this strategy seems a bit foolhardy.  In the meantime, the oral argument proceedings should give us a glimpse into how the Justices are thinking through the major points of contention in the case.  We are in uncharted legal waters on many of these claims.  No matter what happens over the spring and summer, this case is shaping up to be one for the ages.


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