Yesterday the Supreme Court agreed to hear challenges to the Patient Protection and Affordable Care Act, the landmark health reform legislation signed into law by President Obama last year. The Supreme Court will consider several questions related to the constitutionality of the Act.
The first issue, and the one that has received the most attention so far, is whether the individual mandate is a constitutional exercise of Congress' power to regulate interstate commerce or to tax and spend for the general welfare. When the mandate goes into effect in 2014, it will require individuals to purchase insurance, unless they qualify for an exemption. This mandate raises a novel and important question about the scope of the government's power to require individuals to purchase a service from a private entity. So far two appellate courts (the Sixth and DC Circuits) have upheld the mandate based on Congress' power to regulate commerce, while the Eleventh Circuit held the mandate unconstitutional. For more on the constitutionality of the individual mandate, click here.
The Court will address two other issues related to the mandate. The first is a jurisdictional question about whether the federal courts are barred from even hearing a challenge to the mandate because of a provision in the federal tax code known as the Anti-Injunction Act ("AIA"). The penalty for failing to comply with the mandate is a tax collected by the IRS, but the AIA prohibits lawsuits that seek to prevent the assessment and collection of taxes before they are due. It requires individuals to pay their taxes first and sue later, which means the earliest an individual would be able to file suit to challenge the mandate would be in 2015. A number of cases have found that the AIA does not apply on the grounds that failure to comply with the mandate is not really enforced as a tax assessment, but rather is a "regulatory penalty" not subject to the AIA prohibition. So far, the Fourth Circuit is the only appellate court to dismiss a challenge to the mandate on this basis.
The second issue concerns the fate of the broader health reform law in the event that the mandate is held unconstitutional, and this turns on the question of whether the mandate is severable from the rest of the law. If the mandate is severable, this leaves the rest of the law intact - this was the conclusion reached by the Eleventh Circuit in Florida v. HHS, the decision accepted for review by the Supreme Court. If the mandate is not severable, then the entire Affordable Care Act could fall with the mandate - the conclusion reached by a Florida District Court, before it was reversed by the Eleventh Circuit on appeal. For a more in-depth discussion of the severability of the individual mandate, click here.
The most surprising issue taken up by the Supreme Court is whether the Medicaid expansion is constitutional. Expanding public health insurance is a critical part of the Affordable Care Act, but it has not received nearly as much attention as the private insurance reforms. Historically, Medicaid has required coverage for only certain categories of people - pregnant women, children, people with disabilities, and low-income Medicare beneficiaries. The Act expands Medicaid eligibility criteria to include all adults with income up to 133% of the federal poverty level. It is surprising that the Supreme Court will consider the constitutionality of this expansion because it is clear that Congress can condition the receipt of federal funding on state compliance with federal law, as long as those conditions bear a reasonable relationship to the purpose of the spending. Eligibility criteria are precisely the kind of funding conditions that have been in place since Medicaid's enactment and they are necessary for achieving the federal goal of increasing health care access for those in need. Challengers claim that expanded eligibility creates new state requirements that are coercive and usurp state sovereignty, but such claims typically fail in the case of voluntary programs like Medicaid (states can choose to opt out) and so far no court has found the expansion unconstitutional. For more on why a legal challenge to the Medicaid expansion is likely to fail, click here.
For a copy of the petitions filed seeking Supreme Court review of the health reform law, click here. For a copy of the order listing the cases and arguments accepted for review, click here.
