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Obamacare Goes to the Supreme Court

The opinions expressed by columnists are their own and do not necessarily represent the views of
The Patient Protection and Affordable Care Act (PPACA), or Obamacare, is off to the Supreme Court for a three-day marathon of oral arguments. Lawyers representing the federal government will attempt to prove the law’s constitutionality; those representing private individuals, the National Federation of Independent Business, and most prominently, 26 states, will argue that PPACA violates the supreme law of the land.

The Court has allotted six hours for arguments, and while it doesn’t seem like much time for such a contentious and crucial issue, bear in mind that the court typically grants a case just one hour. This is the most argument time given in 47 years.

So what questions will the Court answer? What will the lawyers argue? How might the Justices vote? I have a seat inside the courtroom for all six hours of arguments, so expect a full report on the proceedings, as well as a preview each morning of the question before the Court that day. For now, however, we’ll take a general look at the schedule, the questions, and the basic arguments each side will make, in preparation for Obamacare’s big day in court.


Is the financial penalty for not complying with the individual mandate a tax?

When states and citizens first began to challenge the individual mandate in district courts, the federal government’s initial defense was that the plaintiffs had no legal standing to sue until 2014, when the law has been fully implemented. They based their claim on the premise that the penalty for noncompliance with the individual mandate is a tax. Thanks to the Tax Anti-Injunction Act (AIA), an individual may not bring a lawsuit against the government to stop a tax from being collected; the individual must pay the tax in question, and then sue after-the-fact for a refund.

Essentially, the federal government argued that because the penalty is a tax, the plaintiffs had no standing to sue until after the tax had been assessed. The district court didn’t find this compelling, and ruled against the feds. They dropped that defense, and therefore will not be arguing this point before the Court.

Instead, the Supreme Court has assigned a lawyer to argue that the mandate penalty is a tax. It may seem like a pointless endeavor to address this question if none of the parties take the “yes” view, but the argument is for the Court’s benefit. If the Court holds that the penalty is a tax, then they don’t have to issue a ruling on the individual mandate until 2014. This question provides them a way to escape ruling on the more controversial elements of the suit – at least until a later date.


Is the individual mandate an unconstitutional overreach of Congressional power?

This is the main event. The federal government will defend the hotly contested individual mandate against the states, the NFIB, and several individuals, who contend that Congress overstepped its power in passing the mandate.

Congress justified the individual mandate on the Commerce Clause, which grants Congress the right to regulate “commerce among the several states.” The states and private respondents argue that the individual mandate doesn’t regulate commerce, it compels it: people who don’t own health insurance aren’t engaging in commerce. If Congress, then, has the right to force people into the health insurance market, what can’t they force people to buy?

The government, on the other hand, contends that healthcare is “different,” because at one point or another in our lives, all of us need it. Indeed, the uninsured – either by choice or from poverty – do have access to emergency healthcare thanks to the Emergency Medical Treatment and Active Labor Act (EMTALA). That’s the law that requires hospitals to treat emergency patients, no matter whether or not they can pay. As a result of this, the government claims, taxpayers are on the hook for $43 billion, and families’ health insurance premiums are $1000 more expensive than they ought to be. Thus, they argue, not purchasing health insurance substantially affects interstate commerce, and Congress was well within its rights under the commerce clause to enact the individual mandate.

I’ll provide a more in-depth look at this contentious and complex issue on Tuesday morning, as these are the barest of essentials. It’s worth noting again, however, that the Court may not even make a decision on the issue this year. If they take a deferential approach to their power by ruling that the penalty is a tax (and some scholars believe they will), then the law will be implemented and this question will come before the Court again, likely in 2015.


Morning: Severability: What parts, if any, of the law may remain if the individual mandate is unconstitutional?

Typically, a major, massive law like the PPACA would have a severability clause: a line that says, “even if part x of the law goes down, everything else may remain law.” Such a clause is often used in laws that might contain one contentious bit, thereby preventing the whole law from being struck down with it. The individual mandate is a prime example of an element of a law that might warrant a severability clause; however, no such clause was written into the PPACA. Speculation abounds about why: some argue that it was an oversight on Congress’ part, but the prevailing opinion is that the individual mandate isn’t really severable. Congress didn’t intend for the whole law to remain if the mandate weren’t there; in fact, the mandate is what allowed some of the most sweeping health insurance reforms to work.

As with the AIA question, the Court has assigned a lawyer to argue the position that the mandate is severable, i.e., that the rest of the law may stand. The states and private respondents believe the entire law ought to be struck down. The federal government takes a middling position here, arguing that parts of the law may stand, but that provisions relying on the individual mandate should not. They acknowledge there are dire financial consequences for the country, should certain parts of the law stand (most glaringly, guaranteed issue and pre-existing conditions clauses). But the rest of the law, they maintain, ought to remain intact.

The Court will likely take a very conservative approach to severability – they’re wary of overstepping their power where the legislature is concerned, and are unlikely to strike down the law in its entirety. Of course, this question is secondary; first, the Court has to rule that the mandate is unconstitutional, and there’s no guarantee they’ll rule thusly.

Afternoon: Is the Medicaid expansion an unconstitutional coercion of the states?

A key element of the PPACA’s goal of increasing access to insurance is the expansion of the Medicaid program. The law broadened eligibility requirements, allowing more people to qualify for enrollment in Medicaid, and thanks to the individual mandate, requires anyone eligible to either seek private insurance or take the government up on its offer.

Medicaid is a voluntary program. States don’t have to participate, but all of them do; after all, federal money is helpful when considering the cost of healthcare for the poor. Surely, the states couldn’t support that by themselves; not, at least, without raising taxes astronomically on a citizenry already burdened with federal taxes, too. And it’s a common practice for the federal government to attach stipulations to funding for the states; for example, states set speed limits in compliance with a federal maximum (75 miles per hour), and in return, they receive highway funding.

However, the states argue that the expansion of Medicaid is unconstitutional coercion. The federal government has decreed that it will cover the full cost of the expansion until 2020, at which point the states must cover 10% of the cost. Furthermore, says the government, the states must comply with the expansion, or they will lose all Medicaid funding – both for the new enrollees and those already participating.

The states argue that essentially, they have no choice between two options: comply, and slowly go bankrupt from their involuntarily undertaken Medicaid expansion, or don’t comply, and go bankrupt almost immediately. The federal government, on the other hand, says that the states are exaggerating the increased cost, and that the federal government will cover almost all of it anyway. Furthermore, they argue that the federal government has a right to dictate the terms on which it apportions money to the states, and therefore the new strings attached to Medicaid funding are perfectly constitutional.

The Court has, in the past, addressed this issue of coercion – and I’ll cover this more in-depth on Wednesday morning – but the states could have a case here, based on a ruling in which the Court stated that there are limits to the stipulations the federal government may place on funding. This question will test whether the “coercion test” has any legs.

So there you have it: even the general, bare-bones overview of the case is long and complicated. Besides, I’ll have even more detailed coverage of the individual questions each morning, as well as a full report on each day’s oral arguments. I must say, it’s hard to believe that the government was initially dismissive of the suits taken against it; clearly, this case is anything but frivolous.

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