Supreme Challenge: Will the Court Uphold the Affordable Care Act?

This spring, thousands of people swarmed the steps of the Supreme Court to demonstrate support for the Affordable Care Act and highlight the many benefits and protections that we’ll all lose if the law is overturned. 

Among them were two of PHAN’s best activists, artist Theresa BrownGold and health educator Holly Dolan.  

Theresa had been holding vigil there several days a week for months, with portraits and stories of Pennsylvanians who were left behind and left to struggle with no health care and no choices before the Affordable Care Act. Last week, she was joined by Holly, who’s been traveling across the state capturing stories of our friends and neighbors who have, or will soon be, helped by the new law for her blog, Health on the Horizon

Holly and Theresa held their ground, committed to getting the truth out about what’s in the law and how it’s already helping real people. They squared off with tea partiers, talked to the media and most importantly, showed that we in Pennsylvania are committed to protecting our new law. 

To recap, the Supreme Court is considering the following questions in the legal challenge brought by 26 Attorneys General (including Pennsylvania -- thanks to our anti-health care Governor Corbett) and the National Federation of Independent Business:

1) Is it premature for the Court to hear the case, since no one will be penalized for not purchasing health coverage until 2015? 

2) Does Congress have the authority to enact the minimum coverage provision (known derisively as the individual mandate)?

3) If the minimum coverage provision is unconstitutional, can the rest of the Affordable Care Act stand or does it all have to be struck down?

4) Does the expansion of Medicaid coverage in the law unfairly require states to participate, even though the increase is covered almost entirely by the federal government? 

You can read the full transcripts from each day of oral arguments, or listen to the audio recordings here. For the four key questions, we’ll briefly recap what opponents argued, what the government argued and what questions the Justices had for both sides.

1) Is it premature to hear the case?

On day one, the Court had to decide whether or not a 145-year old law, the Anti-Injunction Act (AIA), which holds that a tax can’t be challenged in court until someone has had to pay it barred them from making a decision on the law’s constitutionality until after the first penalties for not purchasing minimum coverage had been paid -- which doesn’t happen until 2015. 

Opponents argued: Rule now, because we’re challenging the “mandate,” not the specific financial penalty. 

Supporters argued: Rule now, because the penalty is not a “tax” as defined under the AIA -- it’s a penalty designed to induce compliance (ensure everyone purchase minimum coverage), not raise revenue.  

Since both sides argued for the Court to hear the case now, the Court appointed an outside lawyer to argue that the opposite position. That attorney argued that the Court should refuse to hear all tax cases until after that tax has been levied, in accordance with the AIA of 1867.

The Court responded: Judging by their questions and the fact that they scheduled oral arguments on this case, it appears that the Justices believe they can rule on the law’s constitutionality now -- rather than waiting an additional 3 years.

2) Does Congress have the constitutional authority to enact the minimum coverage provision?

On day two, the Court took up the question at the heart of both the legal challenge and the political controversy: Does Congress have the constitutional authority to require all Americans (who can afford to and don’t have a religious objection to) to purchase a health coverage or pay a   modest penalty? 

Opponents argued: Congress does not have the constitutional authority to require Americans to purchase health insurance. Enacting and requiring compliance with the minimum coverage provision in the Affordable Care Act is not within Congress’ enumerated powers, and that requiring you to purchase health insurance is akin to requiring you to purchase broccoli, or any other product in a market. 

Supporters argued: Congress does have the authority to require Americans to purchase health coverage under Article I, Section VIII of the Constitution (the Commerce Clause) -- specifically: “To regulate Commerce with foreign Nations, and among the several States...”

Previous Court decisions come to define “commerce” as any activity that substantially effects interstate commerce. In fact, the Commerce Clause provided the constitutional basis other landmark federal legislation: the New Deal laws, and the Civil Rights Act of 1964. But there are limits to what laws Congress can pass under the Commerce Clause, as the New York Times highlighted last week:

“Both [cases: U.S. v. Lopez dealing with gun control laws and U.S. v. Morrison dealing with the Violence Against Women Act] involved federal efforts to exercise traditionally local police powers — to ban firearms near schools and to impose civil penalties for gender-motivated violence against women — under the guise of the commerce clause. Justice Clarence Thomas argued that such a broad reading would confer a federal police power over the entire nation. In both cases, it was arguably a stretch to argue, as respective administrations have, that carrying a gun near a school or assaulting a woman because of her gender has anything to do with interstate commerce.

The same could no doubt be said of many activities traditionally reserved to the states, but defenders of the health care law needn’t address them. The Supreme Court has established limits to the commerce cause, which is regulating activity that has little or nothing to do with commerce. The multitrillion-dollar health care and insurance industries surely fall well within that boundary.”

In addition, supporters argued that the health care market is fundamentally different from the food market. Here’s why:

A person's participation in the health care market, whether they have insurance or not, is inevitable -- and often unpredictable and involuntary. Under the Emergency Medical Treatment & Labor Act (EMTALA), passed in 1986 under President Reagan, all hospitals are required to provide stabilizing treatment for anyone who comes to them for treatment of an emergency medical condition -- regardless of how severe (or costly) that person’s needs are, and whether or not that person has the ability to pay. 

You don’t know if, when or to what extent you’ll need medical care. And you’ll get the care you need to stabilize you when that situation occurs -- whether you can pay for it or not. 

That is fundamentally different from a trip to the grocery store, where you know what you need and cannot take home more than you can pay for, regardless of what you need. 

Everyone participates in our health care market, either actively (buying insurance) or passively (by showing up in the emergency room or other provider setting seeking care that they need but can’t pay for). The minimum coverage provision regulates trade in health care services by requiring most Americans to finance their health costs through insurance -- rather than passing those costs on to taxpayers and private insurers by seeking care they can’t pay for in emergency rooms and other inpatient settings. 

Here’s how the Obama Administration described this situation:

“A decision not to purchase health insurance affects the national economy. And under the Constitution’s Commerce Clause, Congress has the authority to regulate such economically significant decisions.

The uninsured do ... consume health care (frequently in hospital emergency rooms or inpatient facilities), but often they cannot pay for it. As a class, the uninsured shift tens of billions of dollars of costs for the uncompensated care they receive to other market participants annually.”

In reality, without the “individual mandate” which is better described as a “minimum coverage provision” that everyone purchase insurance, coverage would drop and prices would increase (as only the sickest people are covered), which would force the government to subsidize higher premiums while covering fewer people. Ensuring everyone is covered broadens the risk pool and stabilizes the health insurance market -- which will allow prices to come down and coverage to become more secure. 

The Court responded: The Justices asked pointed questions of both sides in considering this crucial question. Justice Ginsburg cited the costs of uncompensated care as proof of how the health care market is fundamentally different than other markets, and falls within Congress’ constitutional authority to regulate. 

Chief Justice Roberts countered that line of argument, saying that if the Court allows Congress to regulate anything people buy just because of how they pay for it, “all bets are off” in terms of Congress’ power to regulate Americans’ activity. However, Roberts also acknowledged that the health care market is fundamentally different, saying: “Not everybody is going to enter the mortgage market... the government’s position is that almost everybody is going to enter the health care market.”

Justice Kennedy, the critical “swing vote” in key decisions, offered some hope to supporters when he acknowledged that people who choose not to buy health insurance “are in the market in the sense that they are creating a risk that the market must account for,” and that “the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries.”

Still, it’s anyone’s guess as to how the Court will rule. One thing’s for certain: we’ll have an answer in just a few months. 

3) Can the Affordable Care Act stand if the minimum coverage provision is struck down?

On day three, the Justices considered the question of what happens to the rest of the law if the minimum coverage provision is found to be unconstitutional. 

Opponents argued: The law should be struck down entirely. If the individual mandate is unconstitutional, the rest of the law cannot stand. In particular, the requirement that insurers offer coverage to everyone, regardless of pre-existing health conditions, and the requirement bars insurers from charging women more than men and those who have been sick more than those who haven’t could not happen if Congress could not compel healthier people into the risk pool, as premiums would skyrocket for everyone. 

Supporters argued: The entire law, including the minimum coverage provision should be found to be constitutional under Article I of the Constitution (Commerce Clause). But if the Court rules otherwise, the other parts of the law should still stand as only a few provisions are too closely tied to the minimum coverage provision to succeed without it -- and because the only question before the Court (in the strictest sense) is that concerning the constitutionality of the minimum coverage provision. Also, many provisions of the law (like increasing provider reimbursements for Medicaid, reducing drug costs for Medicare beneficiaries and allowing young adults to remain on their parent’s insurance are important provisions, unrelated to and unaffected by the minimum coverage provision that are already in place and proving to be very successful.  

The Court responded: While supporters argued that it would be an exercise of judicial restraint to leave the law in tact, if the Court decided to strike down the minimum coverage provision, Justice Kennedy seemed to suggest the opposite, saying:

“When you say judicial restraint, you are echoing the earlier premise that it increases the judicial power if the judiciary strikes down other provisions of the Act. I suggest to you it might be quite the opposite. We would be exercising the judicial power if one Act was — one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended. By reason of this Court, we would have a new regime that Congress did not provide for, did not consider. That, it seems to me can be argued at least to be a more extreme exercise of judicial power than to strike -­ than striking the whole.”

Justice Alito went a little farther in his line of argument than Justice Kennedy, raising the issue of the negative consequences for private insurance companies if the minimum coverage provision were ruled unconstitutional, while the requirements for them to cover everyone, regardless of health history and to end discriminatory pricing practices remained.

And Justice Scalia went even farther, delving into the political ramifications if the Court struck down just the minimum coverage provision, saying:

“You can't repeal the rest of the act because you're not going to get 60 votes in the Senate to repeal the rest. It's not a matter of enacting a new act. So you're just put to the choice of I guess bankrupting insurance companies and the whole system comes tumbling down, or else enacting a federal subsidy program to the insurance companies, which is what the insurance companies would like, I'm sure.”

Again, it’s anyone’s guess what the Court will ultimately decide, but based on several of the Justices pointed questions, it appears that there is no consensus on whether it’s more prudent to uphold other parts of the law if the minimum coverage provision is scrapped, or to invalidate the entire law. 

4) Does the expansion of Medicaid coverage in the law unfairly require states to participate?

In the afternoon on day three, the Court considered whether or not the expansion of Medicaid to all adults earning up to 133% of the Federal Poverty Level unduly forced states to participate, despite the expansion being 100% funded by the federal government in the first decade, and then 90% after that. 

Opponents argued: The expansion of Medicaid unfairly coerces states to participate by providing an offer that’s too good to refuse (the fully funded expansion, which reduces slightly to 90% funded after the first three years), and by requiring states that accept that offer to not cut benefits or put new restrictions on eligibility. 

Supporters argued: The Medicaid expansion is an appropriate exercise of Congress’ power under the Spending Clause (Article I Section 8, Clause I) and complies with Court precedent laying out the limits of that power. This expansion is keeping with the evolution of expansions in previous decades, which states chose to participate in --  in 1984, to cover pregnant women and infants; in 1989, to cover children under 6 years of age in households earning less than 133% of the poverty level and in 1990, to children between the ages of 6 and 18 in households earning up to 100% of the poverty level. The history of Medicaid shows states’ agreement with the federal government’s ability to amend the program as needs change.  

The Court responded: Justice Kagan asked pointed questions of the attorney for the plaintiffs challenging the law to help illuminate the issue of whether or not the Medicaid expansion, fully funded by the federal government, was “coercive” to states who didn’t want to participate. 

JUSTICE KAGAN: “Now, suppose I'm an employer and I see somebody I really like and I want to hire that person. And I say I’m going to give you $10 million a year to come work for me. And the person says well, I — you know, I've never been offered anywhere approaching $10 million a year, of course I'm going to say yes to that. Now we would both be agreed that that's not coercive, right.”

She continued: “When a taxpayer pays taxes to the Federal government, the person is acting as a citizen of the United States. When a taxpayer pays taxes to New York, a person is acting as a citizen of New York. And New York could no more tell the Federal government what to do with the Federal government's money than the Federal government can tell New York what to do with the moneys that New York is collecting.”

Chief Justice Roberts countered with a challenging line of questioning to the Solicitor General, who was defending the law’s constitutionality. He said: 

CHIEF JUSTICE ROBERTS: “Well, but the question is not obviously the States are interested in the same objective and they have a disagreement or they have budget realities that they have to deal with. And States say, well, we are going to cut by 10 percent what we reimburse this for or that for and the Federal government says well, you can't.

And no one is suggesting that people want to cut health care, but they have different views about how to implement policy in this area. And the concern is that the Secretary (of Health and Human Services) has the total and complete say because the Secretary has the authority under this provision to say you lose everything. No one's suggested in the normal course that will happen, but so long as the Federal government has that power, it seems to be a significant intrusion on the sovereign interests of the State. 

Now I'm not — it may be something they [states] gave up many decades ago when they decided to live off of Federal funds. But I don't think you can deny that it's a significant authority that we are giving the Federal government to say that you can take away everything [new federal funding for the Medicaid expansion if states restrict eligibility] if the States don't buy into the next program.”

Again, it’s hard to say how the Justices will rule -- although many legal scholars believe that opponents were on the weakest ground in challenging the constitutionality of expanding Medicaid

What’s next? 

We can all speculate -- but no one knows for sure. Here are four scenarios which could play out. In the meantime, and maybe for the first time -- Americans are finally beginning to realize what we’ll all lose if the Affordable Care Act is struck down.