Affordable Care Act Litigation: The Supreme Court and the Future of Health Care Reform
Journal of the American Medical Association, Vol. 307, No. 4, pp. 369-370, 2012
3 Pages Posted: 29 Jan 2012 Last revised: 30 Jan 2012
Date Written: January 27, 2012
In Florida v. HHS, a lawsuit brought on behalf of 26 states challenging the constitutionality of the Patient Protection and Affordable Care Act (ACA), the Supreme Court will determine the future direction of health care reform in the United States. During the unprecedented 5-1/2 hours of oral arguments, the Court will hear 4 issues: the individual purchase mandate, severability, the Medicaid expansion and the Anti-Injunction Act.
The states challenging the ACA maintain that the purchase mandate uniquely penalizes individuals for failing to purchase insurance. Uninsured individuals, however, rarely do nothing. Instead, they self-insure, rely on family, and cost-shift to hospitals, the insured, and tax payers. Because most uninsured people will eventually require uncompensated care, they impose costs on everyone through higher taxes and insurance premiums. Further, although the ACA’s mandate is unusual, it is not unprecedented. Mandatory worker contributions to Medicare, for example, are a compelled purchase of health insurance. The necessary and proper clause, which permits Congress to pass laws rationally related to the exercise of federal powers, may be the best argument in favor of the mandate because the mandate is necessary for the other insurance market reforms to work.
If the Court were to strike down the mandate, it would then have to determine whether the mandate is severable from the rest of the ACA. Although the ACA did not explicitly state that if part of the act were deemed unconstitutional the rest would survive, most ACA reforms are severable because they are unrelated to the mandate, such as funding for public health and community health centers. The more difficult question is whether the mandate is so intertwined with the ACA’s still unimplemented market reforms that the Court must strike them down.
The Court will also review the constitutionality of expanding Medicaid to all individuals with household incomes below 138% of the federal poverty level. The states argue that Medicaid expansion is unduly coercive because they could lose all Medicaid funding and not just the funding related to the expansion. The Court, however, is unlikely to uphold the coercion theory because state participation in Medicaid has always been optional and some states have openly discussed exercising their option to discontinue the program.
Finally, the Court will hear technical arguments concerning the Anti-Injunction Act (AIA), which prohibits lawsuits “for the purpose of restraining the assessment or collection of any tax.” The Court is unlikely to invoke the AIA because neither the administration nor the states contend that it applies.
The ACA will achieve near universal coverage, something that seemed unimaginable just a short time ago. Health reform envisages a social contract in which everyone shares the cost, recognizing that virtually everyone will become ill one day. The ACA and its individual mandate are not unjustified limits on freedom, but rather are vital to a decent society.
Keywords: Health insurance, Medicaid, Individual mandate, Health law, Health policy, Insurance law
JEL Classification: I18, K00, K10, K30
Suggested Citation: Suggested Citation