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Supreme Court Divided on Health Care Reform

The Supreme Court recently heard oral arguments regarding constitutional challenges to the Patient Protection and Affordable Care Act (PPACA). The oral arguments extended for three days (March 26-28, 2012). The primary focus of the Supreme Court's review concerned the constitutionality of the PPACA's individual mandate, which requires consumers obtain health insurance by 2014, or face a penalty. The Court also discussed the applicability of federal tax law and state Medicaid expansion.

On the first day of oral arguments the Court evaluated whether the Anti-Injunction Act prevents challenges to the Affordable Care Act. The Anti-Injunction Act generally prohibits pre-enforcement legal challenges to the assessment and collection of taxes. Because the PPACA requires consumers to purchase health insurance or pay a penalty with their tax return, the Court discussed whether the Anti-Injunction Act deprives courts of jurisdiction to hear challenges regarding the individual insurance mandate. Neither the government nor opponents of the PPACA asserted the Anti-Injunction Act applied.

During oral arguments, the Court was skeptical of the Anti-Injunction Act's application. Justices Breyer and Ginsburg suggested the penalty associated with the individual mandate is not a "tax" within the meaning of the Anti-Injunction Act, given that the individual mandate is not intended to be a revenue source.

The second day of oral arguments focused on the constitutionality of the individual health insurance mandate, which requires most Americans to purchase health insurance by 2014. The discussion of constitutionality fixated on how to characterize the decision not to purchase insurance coverage. The government asserted the individual mandate is constitutional because it is a valid exercise of Congress' power under the Commerce Clause. Opponents to the law argued the individual mandate does not regulate commerce; rather, it forces people into the stream of commerce by requiring them to purchase health care coverage or pay a penalty.

The Court's opinion was split. Some Justices suggested the individual mandate was a permissible exercise of Congress' authority to regulate interstate commerce, while others felt the individual mandate would make it difficult to draw a "limiting principle" beyond which the government cannot go. Justice Kennedy stated there was a "very heavy burden of justification" to show where the Constitution authorizes Congress to change the relation of the individual to the government. Importantly, however, both Justice Kennedy and Roberts alluded that even if the mandate forced consumers into commerce to subsidize health insurance, the health insurance market may be unique enough to justify that unusual treatment.

On the third day of oral arguments, the Court addressed two issues:
- What parts of the PPACA will survive if the individual mandate is declared unconstitutional?
- Is the PPACA's requirement that states expand Medicaid eligibility constitutional?

The government argued that only two provisions of the law-a prohibition against insurers discriminating against people with pre-exiting conditions and a limitation on how insurers set rates-depended on the mandate and asserted the rest of the law should stand. Several Justices expressed skepticism concerning whether the PPACA should be invalidated as a whole if the individual mandate was ruled unconstitutional. Justices Kennedy, Scalia, Alito and Roberts, however, considered whether any provision of the PPACA could survive without the individual mandate.

The last issue considered by the Court was the constitutionality of the PPACA's state Medicaid expansion. Twenty-six states challenged the constitutionality of the PPACA's requirement, which requires states expand their Medicaid eligibility to cover individuals up to 133 percent of the Federal Poverty Level, starting in 2014. States argued the federal government was unconstitutionally "coercing" them into expanding Medicaid eligibility as a condition for qualifying for federal funds to help pay for Medicaid. Some Justices expressed concern whether states actually have a choice to accept the new Medicaid funding, while others appeared to reject the coercion argument.

The Justices attended a confidential conference on March 30, 2012, to vote on the outcome of the challenges to the PPACA. It is expected the Court will issue its written decision at the end of its current term, near the end of June 2012.

For more information on the PPACA hearings or to listen to the transcripts visit: http://www.supremecourt.gov/docket/ PPAACA.aspx.



Written by Pulse

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