Health Care Act Heads to the Supreme Court

The Supreme Court is set to hear six hours worth of arguments over three days on the Patient Protection and Affordable Care Act (ACA), the landmark health care legislation signed into law by President Obama in March 2010. A decision is expected at the end of June in time for the parties’ nominating conventions and the final months of the presidential campaign. 

For the Supreme Court to hear a case two years after a law is enacted is pretty rare. Usually the judicial process takes more time to digest arguments and issue rulings. But ever since ACA became law, there has been a furious race to challenge it. To date, four Circuit Courts of Appeal have issued decisions on it. Three of them — the 4th, 6th and DC Circuits — upheld the law and one — the 11th Circuit — struck it down. When circuit courts reach opposite conclusions on the same law (this is known as a “circuit split”) the Supreme Court almost always steps in to provide a final answer. The following is a rather lengthy explanation of what the issues are and what arguments to expect.

The parties: Attorney Generals from 26 states came together and are the claimants arguing ACA is unconstitutional. The Solicitor General is defending the law on behalf of President Obama. The Supreme Court will be taking argument on four distinct questions which generally are described as follows:

1. Does the Anti-Injunction Act strip the Court of jurisdiction to hear the case?
2. Does Congress have the authority under Article I to require all persons to purchase health insurance? This is known as the “individual mandate” part of the law.
3. If the individual mandate is deemed to be unconstitutional can it be “severed” from the rest of the law or must the Court strike down the entire law as unconstitutional?
4. Did Congress violate their spending power and principles of federalism by coercing states into accepting onerous provisions by threatening to withhold federal funds for medicaid?

Day 1 — Monday March 26 — 90 minutes of argument

This day will likely focus on procedural issues. Very simply, every case argued in front of the Supreme Court has two main components: procedure and substance. Before a Court can rule on the substance of the case (the exciting and controversial issues), it must first ensure that the claimants used proper procedure to get into court. Procedure is the golden bullet. If you convince the Court that your opponent did not follow the right procedure, the case is dismissed. You win without having to argue the substance of the claim.

When the Court is assessing a case’s procedure, they are looking at whether they (the Court) have jurisdiction and whether the case itself is justiciable. Day one will be filled entirely with arguments related to these questions. Officially the Supreme Court has only asked the parties to brief the issue of jurisdiction. But I will bet anybody a nickel that questions about justiciability will be raised by members of the Court today too.

QUESTION 1: THE ANTI-INJUNCTION ACT 

The Anti-Injunction Act (http://www.law.cornell.edu/uscode/text/26/7421) states that nobody can file a claim in an attempt to avoid the assessment or collection of a tax. This is a jurisdictional question. Congress decided that the citizenry should not be permitted to sue the government to complain that their taxes are too high before the taxes have even been assessed. One characterization of ACA is that it is simply a tax on people who do not have health insurance. If this is the case, it would seem fairly clear that the Anti-Injunction Act prevents them from getting through the door. Put another way, if the court decides that ACA is a law about taxes, the Anti-Injunction Act takes away the Court’s jurisdiction to even hear this case argued. This argument was found to be persuasive by the 4th Circuit majority and Judge Kavanaugh of the DC Circuit.

Unofficially, the Court will also address issues of justiciability. Loosely this means claimants must have standing, the issue must be ripe for decision and the question being asked can not be political in nature. The Court, not Congress, imposed these barriers to entry themselves. Article III of the constitution says courts can rule on any “cases or controversies” between parties. This has been interpreted to mean actual conflicts between parties with actual harm endured by the plaintiff. Getting a court to make a ruling on a law that has not been implemented/enforced yet is hard to do. Normally the Court will dismiss the case because it is not “ripe” for decision. Essentially they are saying to the plaintiff, “come back when you have been harmed.”

In that same vein, the Court has determined over the years that only a person who has been harmed may bring a case. In other words, a third party can not step in on behalf of an injured person to sue. They must be injured themselves. If the Court were to find that the Attorneys General were proxies for their citizenry they might dismiss the case because they lack “standing” to sue. A district court judge in New Jersey found this argument convincing and dismissed a case on these grounds. It is on appeal to the 3rd Circuit and no opinion has been issued.

The Court may also decide that the whole case is a “political issue” and therefore they should not wade into the fight. Usually this is reserved for questions on foreign policy, like going to war. But occasionally it will be applied to domestic cases as well. Judge Silberman, writing for the majority on the DC Circuit, said the arguments against ACA seem more politically based more than anything. He upheld the law.

Day 2 — Tuesday March 27 — 120 minutes of argument

The Court turns its attention to the substantive issues. The parties will be arguing whether the Constitution empowers the federal government to require every person to purchase health insurance. The burden is on the feds to show there is a provision in the constitution granting them the power to enact ACA. They will advance three arguments to support their contention that Congress and the President acted within the bounds of what is allowed.

QUESTION 2: Is it permissible for Congress to require all persons to carry health insurance?

Anchor a) the Commerce Clause. Defenders of ACA will say Congress, under Article I, has the ability to “regulate commerce … among the several States.” Health services account for well over 15% of economic activity in our country. Of course Congress has the authority to regulate this market they will say. Opponents of the law say the Commerce clause only allows Congress to regulate ACTIVITY. An individual refusing to enter the market to purchase health care is not engaging in economic activity. Therefore, Congress can not pass a law requiring that person to act against their wishes.

The 6th Circuit found the ACA was within Congress’s Commerce Clause power concluding that 1) everybody eventually requires medical care and 2) everybody receives it regardless of their ability to pay. So even a person who is choosing “not to participate” will still end up receiving care in a hospital and therefore be participating in/active in commerce. The 11th Circuit reached the exact opposite conclusion, finding that ACA goes beyond the scope of Congress’s power.

Anchor b) the Necessary and Proper clause. This is the last clause of the enumerated powers listed in section 8 of Article I. It states Congress has the power, “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing powers, and all other Powers vested by this Constitution.” As you can see, a very broad grant of authority. Those attacking ACA argue this clause must be interpreted narrowly — that it can not be granting powers beyond Article I and therefore the only relevant question is whether the commerce clause is sufficient. Those defending say the Framers knew that sometimes Congress would need the ability to do a little more and this grant of power supports that view.

Anchor c) the Taxing power. Per Article I, Congress has the power “to lay and collect taxes, duties, imposts and excises.” A third argument advanced by those defending ACA is that it simply is a tax. People who do not obtain health insurance will be assessed a tax which will raise revenue for the treasury. Courts have never judged the wisdom of a tax or second guessed Congress’s ability to collect taxes. Opponents argue this tax is not real because there is no criminal sanction for non-compliance. They say if the Court adopts this view the ability of Congress to do anything will be unlimited which is surely not what the Framers intended.

Day 3 AM Session — Wednesday March 28 — 90 minutes of argument

If the Court concludes they have jurisdiction and the case is justiciable (day 1) AND they decide there is no support in the constitution for an individual mandate (day 2) they will then ask, “should we strike the whole law or can the rest of the ACA be saved?”

QUESTION 3: Severability – If the individual mandate is struck down, can it be “severed” from the rest of law or must the entire law fall?

When the Court determines a provision of a law is unconstitutional, they must then decide how much to strike down. The Court usually tries to strike as little as possible. The question is whether the individual mandate is so central to the ACA or if it is just one component? The Solicitor General is conceding that the Court should strike additional provisions of the ACA should they determine the individual mandate is unconstitutional. They say the Court must also strike the “guaranteed-issue” provision (health care providers must offer/issue policies to everybody) and the “community-rating” provision (health care providers need to charge the same premiums to all) provisions should be severed. The Attorneys General argue the entire ACA is toothless without the individual mandate and that Congress would not have passed the law without it. Therefore the Court should strike the whole law.

Because the Solicitor General is conceding that additional provisions of the ACA should be struck down if the Court deems the individual mandate unconstitutional, the Court conscripted an academic to argue for the position that no additional part of the law should be struck down.

The 11th Circuit, the only appeals court that found the law unconstitutional, decided to sever the individual mandate from the rest of the ACA. This means, among several other things, the requirement that insurers allow parents to keep their kids insured until they turn 26 is still in effect.

Day 3 PM Session — Wednesday March 28 — 60 minutes of argument

Finally, the Court looks to see if Congress has passed a law that infringes on States’ rights by giving them no choice but to accept the new regulatory scheme governing Medicaid. This argument has the greatest potential to change the landscape of constitutional law forever. Should the Court rule in favor of the Attorneys General on this issue there is the potential that many different Congressional initiatives will be called into question and presumably invalidated in the near future.

QUESTION 4: Can Congress require States to adopt the new regulatory scheme for Medicaid in exchange for funds to run the program?

The Court has said before that Congress can not withhold money from states in order to get them to comply with initiatives that they, Congress, would not otherwise be able to accomplish. For example, in the 1980s South Dakota said Congress was wrong to withhold a portion of money sent to them by the highway bill until they raised their drinking age from 18 to 21. The Supreme Court heard the case and decided that Congress was acting legally with that restriction. I think the Attorneys General are arguing that because the states rely so heavily on Congress through Medicaid to provide health services to their poor constituents, they have no choice but to accept any new piece of legislation that covers the program. In the case of the ACA, Congress has acted impermissibly because it covers much more than just Medicaid. Tying new rules on health care exchanges and individual mandates to Medicaid funding is an infringement on states sovereignty.

Defenders say this is ridiculous. Of course Congress is free to condition money and states are free to choose to refuse to accept the terms. Just because it will be a politically unpopular decision for states to refuse the money does not mean States are being coerced into accepting the funds.

No judge or circuit court has found the Attorneys General argument convincing. The fact the Supreme Court even agreed to hear it was a surprise to many legal scholars.