Supreme Court Adjournes after 3-Days of Oral Arguments on Individual Mandate

05/05/2012

On Monday March 26th, the Supreme Court conducted three days of hearings on the constitutional challenges to the Patient Protection and Affordable Care Act (PPACA). The four areas of debate included:

  1. Does the Anti-Injunction Act bar the Court from hearing the case in the first place?
  2. Is the individual mandate is constitutional?
  3. Are other portions of the legislation severable from the individual mandate if the mandate is deemed unconstitutional?
  4. Does expansion of the Medicaid program violate the Tenth Amendment?

1. Does the Anti-Injunction Act (AIA) bar the Court from hearing the case in the first place?

The AIA, enacted in 1954, provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” Based on this, it could be argued that the Court is barred from hearing the case until after 2014, when penalties are actually assessed for those who violated the individual mandate. The first attorney to present, Robert Long, was invited by the Court as an amicus curiae, or “friend of the court”, to argue that the case is not yet ripe for review. Long was hired because both of the litigants were in rare agreement that the case is ready to be decided and should not be postponed. Some of Long’s arguments included that the penalty associated with the individual mandate has the distinct marks of a tax and therefore the Court should wait until someone is actually penalized before rendering a decision. Long’s remarks drew constant questions and doubt from the justices. The remainder of the hearing was spent with, Solicitor General Donald Verrilli Jr. for the government and Attorney Gregory Katsas for the challengers of the law, arguing that the Court does have jurisdiction to hear this matter. There was an overriding sense that the Court would not postpone the hearing and could then hear the rest of the arguments.

2. Is the individual mandate is constitutional?

Day two the court debated whether Congress exceeded its power by mandating individuals to purchase insurance or pay a penalty. Verrilli argued that Congress could regulate the individual mandate under the Commerce Clause. Justice Kennedy was quick to ask, “Can you create commerce in order to regulate it?” Verrilli countered by stating that what is being regulated is the method of financing healthcare which is an economic activity which affects interstate commerce. Other Justices challenged the limits of the Commerce Clause including the infamous argument that if Congress regulates the food market, could Congress make people buy broccoli? The opponents countered that the mandate goes beyond the powers of Congress because it cannot “compel individuals to enter commerce in order to regulate it.” If Congress can make people get health insurance, there is no limit to what it else it can require its citizens to do thus creating a slippery slope. As the day came to a close, analysts felt that the individual mandate may not be safe as initially thought. As Justice Kennedy, who may be the deciding factor to the outcome of this case, stated, “here the government is saying that the federal government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the federal government to the individual in a very fundamental way.”

3. Are other portions of the legislation severable from the individual mandate if the mandate is deemed unconstitutional?

On day three, there was focus on the issue of the severability of the individual mandate. In other words, if the individual mandate is struck down, can the rest of the law stand on its own? Opponents argued that other aspects of the law are connected to the mandate so without the mandate everything else falls apart essentially leaving a “hollow shell.” That analogy was taken further by the statement, “you can’t possibly think that Congress would have passed that hollow shell without the heart of the Act.” Justice Scalia agreed and had difficulty with how to separate the other provisions saying, “if you take the heart out of the statute, the statute is gone.” Those Justices that may want to strike down the individual mandate had a hard time dealing with the severability of other provisions. Justices did not want to spend time going through the entire legislation to see what would remain and what would be struck down. Some wanted to leave it to Congress to deal with. According to Justice Kagan, “half a loaf is better than no loaf.”

4. Does expansion of the Medicaid program violate the Tenth Amendment?

The court moved on to the issue of the Medicaid program and whether an expansion of the program poses a financial burden on the states. Federal funding is provided to states who comply with the program and those who do not lose some, if not all, funding. The majority of Justices noted that states have dealt with federally-mandated programs in the past without bringing a challenge before the Court. The overall sense was that the Court would not invalidate the expansion of the Medicaid program.

Even after all the analysis and commentary following the three days of hearings, it is still hard to speculate on the Court’s final ruling. Legal analysts say that oral arguments are not always indicative of the SJC’s final determination. A decision, to be rendered in late June, will have a significant impact on the upcoming presidential election and the future of healthcare in the United States. Although it is still too early to tell what the fate of PPACA is, the White House is quick to point out that its implementation has already been beneficial to healthcare participants. According to reports:

  • 5.1 million Medicare beneficiaries saved an average of $635 on their prescription drugs;
  • 2.5 million more young adults have health insurance on their parent’s plan;
  • Insurance companies cannot deny coverage to children because of a pre-existing condition ; and
  • 45.1 million women have received access to preventive services under PPACA

While we wait to hear the outcome, WGA recommends that employer groups continue to comply with existing PPACA mandates and make adequate preparation for upcoming provisions in order to be prepared for a blessing of this law by the nation’s highest court in the land.