Updated June 28, 2012
UPDATE: In a landmark 5-4 decision issued on June 28, 2010, the Supreme Court upheld the constitutionality of the health care reform law - the Affordable Care Act. [Read more...]
For an unprecedented three days from March 26-28, 2012, the U.S. Supreme Court listened for an unprecedented 6 hours while lawyers representing 26 states argued that parts of the healthcare reform law - the Patient Protection and Affordable Care Act - also known as "ObamaCare" -- are unconstitutional, and lawyers representing one President Obama argued that they are. What parts of the healthcare reform law and the U.S. Constitution did the lawyers argue about?
In the two years following its passage, the Affordable Care Act faced constitutional challenges in four lower federal courts. While three appeals courts found the Affordable Care Act to be constitutional, one did not, calling it "breathtaking in its expansive scope." As happens to most issues on which the appeals courts are unable to agree, the Affordable Care Act now finds itself before the Supreme Court.
Also See: The Powers of Congress
Championed by President Obama, passed by what was then a Democrat-controlled Congress and signed into law on March 23, 2010, the Affordable Care Act contains about 450 provisions. While the one provision of the Affordable Care Act that has generated the most interest and protest is the "individual mandate," requiring just about all Americans to buy health insurance by 2014 under threat of being fined if they don't, it is just one of four aspects of the law currently being considered by the Supreme Court. In the order in which they were argued before the court, these are:
The Anti-Injunction Act - Too Soon?
The Supreme Court first heard arguments on whether or not the states even have the right to challenge the constitutionality of the individual mandate provision of the Affordable Care Act before it actually takes effect in 2014. Basically, can you challenge a law before it is actually a law?
This argument is based on the Anti-Injunction Act of 1793, which makes it illegal to demand a refund on a tax until the tax has actually been collected. Lawyers supporting the application of the Anti-Injunction Act argued that since the fine for failure to buy health insurance will be collected through the individual's federal income tax in the form of a penalty, it is essentially at tax. Other lawyers argued that a fine or penalty is not a tax, since it can legally be avoided by complying with the law.
Legal experts suggest this argument could offer the Supreme Court a legal, if politically unpopular, way of delaying a decision on the constitutionality of the individual mandate until at least after the 2012 presidential election.
Should the court decide the Anti-Injunction Act applies to the individual mandate, they might not rule on the constitutionality of the other three provisions. In other words, case closed… for now.
The Individual Mandate - Fined for NOT Buying Something?
The key, and by far the most controversial provision, of the Affordable Care Act, the "individual mandate" requires almost all Americans to purchase some form of health insurance by 2014 or face or face financial penalties. It will be up to the Supreme Court to decide whether or not the federal government, under the Commerce Clause of the Constitution, can regulate economic "inactivity." In other words, can the government make it illegal to not buy something?
In theory, costs savings to the government realized by having virtually all Americans covered by health insurance would be used to help fund other provisions of the Affordable Care Act, such as the expansion of the Medicaid program, which is also being challenged.
Also See: Is the US Really That Uninsured?
Another provision of the law which might be lost should the individual mandate be struck down is the measure banning insurance companies from denying coverage because of pre-existing medical conditions. A key justification for the individual mandate is that it will enable the insurance companies to afford providing coverage to people with pre-existing conditions because all people, including many people who might not have done so before, will be required to buy health insurance.
The Commerce Clause of the Constitution (Article 1, Section 8, Clause 3) empowers the U.S. Congress to regulate commerce between the U.S. and foreign nations, citizens of the various states and Native American tribes. Along with the sale and transportation of merchandise and services, interstate "commerce" as used in the Commerce Clause can also include communications (telephone, radio, etc.), as well as personal travel between states for business or pleasure. Among other laws, federal gun control laws, like the Gun Control Act of 1968 and the Brady Handgun Violence Prevention Act base their constitutionality on the Commerce Clause.
Prior to passage of the Affordable Care Act, the "commerce" resulting from the mandatory universal purchase of health insurance did not exist, leading Justice Anthony Kennedy to ask during oral arguments on March 27, if it was constitutional for the government to "create" commerce in order to regulate it.
Severability - All or Part?
Laws passed by the U.S. Congress typically contain a "severability" clause stating that if part or parts of the law are found to be unconstitutional or repealed, all other parts of the law remain in force. Through either to accident or intent, the Affordable Care Act does not contain a severability clause. This brings the question before the Supreme Court: If the individual mandate section is ruled unconstitutional, does the rest of the law remain in effect or not?
The lower courts split on the question of severability. In February, 2012, a Florida federal judge, who ruled the individual mandate to be unconstitutional, wrote, "Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void." But a federal appeals court overruled the Florida judge on the severability question, while agreeing on the unconstitutionality of the individual mandate.
The government contends that, even without a specific severability clause, in the event the individual mandate is declared unconstitutional, the rest of the law should stand. However, should a majority of the justices become convinced that Congress intentionally omitted a severability clause; the court could overturn the entire Affordable Care Act.
Mandatory Medicaid Expansion - Coercion of the States?
Another provision of the Affordable Care Act would greatly expand the state-administered Medicaid health care program by extending eligibility for the program to millions of currently ineligible low-income individuals. Currently available only to low-income parents, children and caretakers with dependent children, the Medicaid eligibility would be extended to include all uninsured low-income individuals between ages 19 and 64 starting in 2014.
The states challenging the Affordable Care Act argue that forcing them to expand their share of Medicaid costs and administration, with the risk of losing that funding if they refuse, unconstitutionally "coerces" state governments.
Also See: Health Care Reform to Extend Medicaid to Millions
However, under the Affordable Care Act, the federal government would pay for 100% of the states' added Medicaid costs through 2016 and 90% from then on. Since this reimbursement to the states would be funded largely from cost savings realized from all Americans being required to buy health insurance, it is likely the Medicaid expansion provision of the Affordable Care Act will fall if the individual mandate is declared unconstitutional.
Since no lower federal courts had previously ruled against the Medicaid expansion provision, many legal experts were surprised when Supreme Court decided on it own to add the state "coercion" issue to its hearings on the Affordable Care Act.
Which States are Challenging the Law?
Led by Florida, a total of 26 states have challenged the constitutionality of all or parts of the Affordable Care Act. Joining Florida in the challenge are Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.
When Will the Court Decide?
The Supreme Court is expected to issue its decision on some or all of the constitutional challenges to the Affordable Care Act in June 2012.