Health Reform Constitutionality – The Journey Continues

Categories:

For those of us who are not lawyers but enjoyed watching them in action, the legal challenges to the Affordable Care Act have been more entertaining than the new TV season.  The stakes got kicked up a little higher this week when both the Obama administration and the original plaintiffs requested the Supreme Court to review the decision of the 11th Circuit court.  A Health Affairs blog has a detailed description of this case at http://healthaffairs.org/blog/2011/09/29/the-affordable-care-act-supreme-court-petitions-issues-and-implications/, which is fascinating reading for legal wonks.

As you may recall, the 11th Circuit ruled that the mandate was unconstitutional, citing the “broccoli” argument described below.  It also struck down the guaranteed issue requirement and the preexisting condition exclusion prohibition in the law, finding that without the mandate people would simply wait until they got sick to buy health insurance which because of those provisions could not be denied to them.  In this case the plaintiffs argued, and the court agreed, that Congress would never have enacted those provisions without the mandate.  However it left the rest of the act in place, overturning the lower court judge who had ruled the entire act unconstitutional.

These rulings contrasted with those of two other appeals courts.  The 6th Circuit ruled that the mandate was constitutional and left the entire act in place.  The 4th Circuit ruled that the employer mandate was a tax, and was therefore within the taxing power of the government.  Furthermore, it invoked the “Anti-Injunction Act” (AIA), which stipulates that no tax can be challenged until that has actually been paid by the litigant.  Since the individual mandate has not gone into effect, this effectively means that the law could not be challenged until 2015 when someone without insurance incurred the penalty. (Keep an eye on this, because it may be the issue that kicks the legal can down the road.)

In their appeal of the 11th Circuit court ruling, the plaintiffs argued that the court should find the entire act unconstitutional, rather than simply striking the sections dealing with guaranteed issue and preexisting conditions.  Predictably, the Obama administration argues that the entire law (including the mandate) is constitutional and looks to the Supremes to overturn the 11th Circuit decision.

In addition, the states that were party to the 11th Circuit ruling and who have argued unsuccessfully that the Medicaid expansion and the requirement that states abide by the employer rules regarding health insurance also filed an appeal seeking to have those rulings reversed.  Those rulings only apply to the states, however, and are of less interest than the constitutionality of the individual mandate.

To me, it looks like there are two major remaining issues.  First, is the mandate a tax?  If so, every court has held that it would be constitutional; however only one court found that it is, in fact, a tax.  The other courts have reviewed the legislative history, including the President’s comments that there would be no new taxes in the law, and have ruled that the mandate is not a tax. 

If the mandate is not a tax, is it constitutional?  This would be the second step in the Supreme Court’s ruling on the mandate.  These issues surround the applicability of the 10th amendment and question the ability of the Federal government to require individuals to purchase a particular product.  The most interesting argument on this issue is the “broccoli” theory, which suggests that if the federal government can force you to buy health insurance it can also force you to buy broccoli or anything else – in other words there are no limitations on the government’s power.  One circuit court accepted this argument, while the other rejected it.

If the mandate is upheld, most of the other interesting issues disappear.  However, if the mandate is struck down, then questions arise as to what other parts of the act may also be struck down.  There have been a variety of court opinions on this topic ranging from declaring the entire act unconstitutional to upholding the entire act. 

So what happens next?  It looks like the court will rule on this issue by next summer.  And it also looks like those decisions could go in three different directions.  First, the Supremes could rule the mandate is constitutional.  That would end the issue permanently.  They can also rule the mandate unconstitutional, in which case they could also strike down other parts of the law (or not).  That would also end the issue permanently. (Of course, both decisions could be obviated by changes or repeal of the law.)

But the third option could be that they would agree with the 4th Circuit and find the mandate to be a tax.  In this case the decision could be appealed - but not until 2015 when someone actually had to pay it.  This would deny closure to both sides of this argument and create uncertainty for years to come.  Everyone hopes that this will not happen.

And so the show continues.  Maybe we’ll know the answer before the 2012 elections.  Or maybe not.