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Health reform heads for legal showdown

The Supreme Court, starting March 26, will hold three days of oral arguments on legal challenges to the Patient Protection and Affordable Care Act, a defining moment for the 2-year-old statute and a major factor in determining whether it will survive.

In November 2011, the high court agreed to take up health reform lawsuits brought by a coalition of states and a prominent small-business association, a widely expected move that likely sets up a June decision by the court in the middle of the presidential election campaign. Justices could decide that the law is constitutional, invalidate part or all of it on constitutional grounds, or effectively postpone a final determination by stating that the plaintiffs cannot challenge the law until it takes full effect in 2014.

The justices will hear from the Obama administration and a multi-state coalition led by Florida on whether the Anti-Injunction Act renders moot the central challenge posed to the reform law by the states.

The act in question prohibits plaintiffs from suing over a tax that they have not yet been required to pay. Because the reform law’s individual mandate requires individuals to obtain health coverage or pay a tax penalty starting in 2014, the administration argues that the states do not have standing to sue over the individual mandate. The states argue that the Anti-Injunction Act does not apply in this case, and that even if it did, it does not bar their challenge from proceeding.

If the justices decide that the act applies and blocks the state challenge, the ruling could leave the reform law intact for now but also leave open the door for a similar legal challenge after 2014.

The justices will hear from the Obama administration, the states and the National Federation of Independent Business on whether the requirement that individuals obtain health insurance starting in 2014 or pay a penalty is constitutional.

The administration argues that the mandate is an appropriate application of Congress’ power to regulate interstate commerce under the U.S. Constitution because individuals’ activities can have effects on the health system that transcend state borders. The states and the business association argue that because the mandate effectively requires people to engage in commerce by buying an insurance product — not just regulates those who choose to engage — the provision is an inappropriate and unprecedented application of federal power.

If the justices strike down the individual mandate on constitutional grounds, the ruling could imperil coverage and spending requirements on insurers that depend on guaranteeing a minimum level of individual insurance buy-in.

The justices will hear from the Obama administration, the states and the National Federation of Independent Business on whether the individual mandate can be separated from the rest of the reform law or if the entire statute must be struck down.

The administration argues that even if the individual mandate is found unconstitutional, the other provisions of the law can take effect as authorized. The states and the business association argue that because the mandate and the coverage expansions authorized by the law are intertwined, the entire statute must fail if the mandate cannot pass constitutional muster.

If the justices strike down the individual mandate and also decide that it is not sever-able, the entire reform statute will be voided. If they decide that sever-ability does apply, only the mandate is invalidated, a ruling that could prompt Congress to revisit the law’s coverage expansions to prevent costs from spiraling out of control as a result.

Later in the day, the justices will hear from the Obama administration and the states on whether the law’s Medicaid expansion is constitutional.

The states argue that the Medicaid expansion, which eventually requires states to pay a portion of the health costs for the newly covered enrollees, represents federal coercion because states either must pay the additional costs or surrender all federal dollars that they receive to support the Medicaid program. The administration argues that the Constitution allows the federal government to set terms and conditions on the money it disburses to states, and that states are under no obligation to participate in the Medicaid program other than the political price they likely would pay for withdrawing from it.

The full and original article can be found at: http://www.ama-assn.org/amednews/2012/03/19/gvse0323.htm

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