Health Care Heads to the High Court: What to Expect

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Published March 23, 2012

| FOXBusiness

The White House has been busy touting the second anniversary of the enactment of the health-care law, but a giant question mark hangs over the celebrations: Will the legislation make it to its third anniversary?

In an historic case, for which people are already lining up in hopes of getting inside to catch a glimpse of the proceedings, the U.S. Supreme Court will hold three days of arguments starting Monday to determine the fate of The Patient Protection and Affordable Care Act. Experts say the court’s ruling on the reform, which would extend coverage to nearly 32 million Americans and overhaul the insurance industry, could be one of the most consequential in its history.

The case -- arguably the biggest test to the legislative branch’s power since the New Deal -- has dominated headlines, become a campaign sound bite, and spurned protests and rallies across the nation and on Capitol Hill. The controversy surrounding the reform is only set to grow next week, attention the Supreme Court does not relish.

“The Supreme Court, left to its own devices, wouldn’t choose to be deciding an issue that is one of the focal points of a heated election campaign,” said Stephen Wermiel, constitutional professor at American University. “It’s not just an important political issue, but one that affects millions and millions of people, and is an essential part of our economy.”   

Even the vice president was overheard telling President Obama that the passage of the legislation was “a big f -- ing deal!"

Key questions the court must consider are whether it can issue a ruling on the case this year, if the individual mandate provision is constitutional, and whether the expansion to Medicaid is legal. If the court rules the insurance requirement is outside the scope of Congress’s power, the court will also have to decide if that part is severable from the rest of the law, or if the entire reform is invalid.

How We Got Here

Two groups are challenging aspects of the law: 26 states plus the National Federation of Independent Businesses, and four small business owners.

The constitutional challenges to the legislation have worked their way through the lower courts over the last year, and federal judges have split in their rulings on whether Congress has exceeded the scope of its power.

At the appellate court level, two courts upheld the reform, one ruled it constitutional, and another said it was too early to make a decision since the individual mandate doesn’t go into effect until 2014.

What the Court Will Have to Decide

Starting at 10:00 a.m. ET on Monday, the court will hear arguments to determine whether or not the court can even rule on the case this year. The 1867 Anti-Injunction Act bars challenges to federal taxes until the levies are passed -- 2015 in this case, when the penalties for not having insurance are assessed.

Neither the government nor the opposition argue this law applies, but the court has appointed lawyers to present this case, an uncommon but not unprecedented move.

According to Ilya Somin, associate professor of law at George Mason, the court is not likely to find that it cannot rule on this case because even if the justices find the act is applicable, it would only bar the NFIB and the individuals from filing the lawsuit, not the states.

On Tuesday, the insurance mandate takes center stage. On Wednesday, the justices will consider whether the rest of the law can still stand if it throws out the mandate, along with the expansion to Medicaid.

“The government has filed a brief stating that if [the court] strikes down the mandate then there are other parts of the law that will become negated because they wouldn’t make sense, namely the pre-existing conditions requirement and state insurance pools,” said Wermiel.

The Arguments

Mandate-Tuesday, 10:00 a.m. ET: The court must decide whether the federal government has the power to mandate people to buy health insurance. The reform requires individuals to have coverage by 2014 or pay a fine, with the exception of low-income Americans.

Employers with more than 50 employers are also required to provide coverage to their workers, or pay a fine of $2,000 per worker. Starting in 2014, consumers will also be able to find coverage with private insurers through so-called exchanges.

The court will hear arguments for two hours, and the Obama Administration will point to the Commerce Clause, which gives Congress the power to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes,” as Congress’s authority source to require Americans to purchase health insurance.

Opponents of the law argue Congress does not have the authority to force someone into a marketplace, and if Congress can pass this mandate, what’s to stop it from making Americans buy Brussels sprouts to improve their health?

Severability-Wednesday, 10:00am:  The court must decide what happens to the rest of the 2,700-page law if it strikes down the mandate.

According to the government, if the mandate is ruled unconstitutional the provisions that require insurance companies to cover all individuals with preexisting conditions and the creation of insurance pools would also be void.

Opponents of the law want the entire law struck down if the mandate falls.

Medicaid Expansion-Wednesday, 1:00pm ET:  The mandate may be the most talked about issue, but experts say how the court rules on the extension of Medicaid could be more telling of the court’s views, and set a strong precedent.

“So far in our history the Supreme Court has done very little to nothing to limit Congress's power when it’s attaching conditions to spending federal money,” explained Wermiel. “If the court were to find that the Medicaid expansion provisions violate Congress’s spending power, that in a sense is newer in terms of Constitutional thinking than what it will say about commerce power.”

The health law asks states to cover every individual under age 65 with incomes of up to 133% of the poverty level starting in 2014. According to the government, that translates into an annual income of nearly $14,850 for an individual and $30,650 for a family of four.

The government argues that it will initially fund all of the expansion, adding that the right to alter or change stipulations was attached to the original allocation of Medicaid funds.

Opponents call the requirement of states to expand Medicaid coverage or lose federal matching funds coercive and a violation of states’ autonomy, and one that can create a financial burden.

“The federal government can place conditions on how states spend federal money, but under contract law, there is a difference on how contract modification is treated,’ explained James Blumstein, university professor of Constitutional law and health law and policy at Vanderbilt Law School. “At formation contracts can have all the stipulations they want, but when it changes or modifies an existing contract, that is the government trying to leverage new power and conditions.”

Reading the Tea Leaves

A recent American Bar Association poll shows that 85% of a “select group of academics, journalists and lawyers who regularly follow and/or comments on the Supreme Court” expect the court to uphold the act.  

Currently, the high court is made up of a 5-4 conservative majority, but experts say the only locked-in vote to repeal the law is Justice Clarence Thomas.

“The federal government has an advantage in they start off with four votes -- they just need to pick off one of the remaining five when it comes to the mandate,” said George Mason's Somin. Of the justices that could be “picked off,” experts lists Chief Roberts, and Justices Kennedy and Scalia as the prime suspects. “We know the least of Chief Justice Roberts, and we know that Kennedy has been a swing voter in these types of cases.”

Wermiel pointed out that it is “significant” that Roberts and Alito worked in the Office of the Solicitor General and were tasked with defending acts of Congress. “They are not instinctually starting with the kind of ‘pro-states concern’ about the power of the federal government that [former justice Sandra Day] O'Connor and [former Chief Justice William] Reinquist brought to the court.”

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