On November 14, 2011, the Supreme Court decided to hear a combined case from 26 states[1] the National Federation of Independent Business[2], and the Federal Government[3] addressing four challenges to the Patient Protection and Affordable Care Act (ACA)[4].
There are four questions before the Supreme Court:
(1) Whether there is jurisdiction to challenge the constitutionality of the health care law before it comes into complete effect.
(2) Whether the individual mandate[5] is unconstitutional;
(3) Whether the individual mandate is severable from the remainder of the law;
(4) Whether the federal government can coerce states to expand Medicaid.
First, the Supreme Court will hear arguments on whether the case can even be heard at all. This turns on how the penalty for not buying insurance is treated: is it a tax or regulatory fine.
What does it matter?
A federal law, known as the Anti-Injunction Act (AIA), prevents courts from hearing challenges to the imposition of a tax before the tax is actually collected. Given that the penalty would not take effect until 2014, with collection in 2015, if the Supreme Court finds that it is a tax, then the case could not be heard until someone has paid a tax penalty to the IRS.[6]
Second, the Supreme Court asks for arguments on whether Congress had the power to enact the "minimum coverage" provision of the act, also known as the individual mandate. Lower appeals courts have been split on this issue. Parties before the Supreme Court will argue whether the mandate is a valid regulation of the health insurance market, or an unconstitutional burden on a person’s choice to not buy insurance through the ACA’s compelling of citizens to enter into contracts with private companies.
Third, if the mandate does not pass constitutional muster, would the entire law be declared unconstitutional? Must the entire statute fall if this one provision is struck down or, can the Supreme Court "sever" this part, or a combination of parts, so that the rest of the law can stand? Normally, the legislature inserts a “severability clause” for these precise Constitutional and possible other legal challenges. However the Affordable Care Act specifically does not include this language. It is possible that a severability clause was not inserted in the ACA because many Members of Congress argued the law’s provisions were so inextricably intertwined that including a severability clause would have deflated arguments for the individual and employer mandates at the very outset. The Supreme Court will need to decide.
Finally, the Supreme Court will hear arguments on whether Congress violated states' rights when it expanded the Medicaid program. The Supreme Court specifically asks, “Does Congress exceed its enumerated powers and violate basic principles of federalism when it coerces States into accepting onerous conditions that it could not impose directly by threatening to withhold all federal funding under the single largest grant-in-aid program.” Currently, states provide benefits through their Medicaid program to individuals who fall within certain “categorically needy” groups (families with dependent children, elderly, blind, disabled, children, and pregnant women) and retain significant flexibility to determine whether and to what extent to cover other individuals. The ACA provides that states must expand their Medicaid program to cover all individuals under age 65 with incomes up to [138%] of the poverty level.”[7] If the states don’t pay their share of this Medicaid expansion, the federal government would deny all Medicaid funds to noncompliant states, thus eliminating the state’s Medicaid program on which millions of people have become dependent.
Briefings are currently being submitted on the four issues. Six hours of oral arguments have been allotted for March 26, 2012.[8]
Time permitted for oral arguments before the Supreme Court is usually one hour – five and a half hours is the most time devoted to a single case since the 1960s.
A decision is expected in June, just months before the 2012 election.
For the Briefing Schedule: http://www.supremecourt.gov/orders/courtorders/120811zr.pdf.
Click HERE for a list of Lower Court Cases and Rulings.
[1] S. Ct. Docket Files, Florida v. Department of Health and Human Services, No. 11-400, retrieved February 9, 2012, http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/11-400.htm; The 26 states include: Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada , North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin, Wyoming.
[2] S. Ct. Docket Files, National Federation of Independent Business v. Sebelius, No. 11-393, retrieved February 9, 2012, http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/11-393.htm.
[3] S. Ct. Docket Files. Department of Health and Human Services v. Florida, No. 11-398, retrieved February 9, 2012, http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/11-398.htm.
[4] Pub. L. No. 111-148, 124 Stat. 119 (2010), available at, http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf, amended by Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (to be codified primarily in scattered sections of 42 U.S.C.), available at, http://www.gpo.gov/fdsys/pkg/PLAW-111publ152/pdf/PLAW-111publ152.pdf.
[5] Id. § 1501(b), 124 Stat. at 244 (to be codified at I.R.C. § 5000A).
[6] The rationale behind this tax law is to prevent people from suing for the purpose of avoiding taxation. It allows the government to collect its taxes then, if a court decides otherwise, provide a reimbursement.
[7] Brief of State Petitioners – Medicaid at 7, Florida v. HHS, No. 11-400 (S.Ct., Jan. 7, 2012), http://myfloridalegal.com/webfiles.nsf/WF/JMEE-8QDTNU/$file/11-400+ts+States+%28Medicaid%29.pdf.
[8] On February 22, 2012, the Justices added an additional half hour for arguments. There will be 90 minutes allocated to the Anti-Injunction Act, two hours to the individual mandate, one hour on the expansion of Medicaid, and 90 minutes of argument on severability (whether and how much of the law will remain in force if other provisions, like the individual mandate and Medicaid expansion, are struck down).
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