Obamacare vs. Supreme Court

04/07/2012

I almost didn't write this blog because I don't want to get involved with a political hot potato on the health care law that is pending before the Supreme Court.  However, on reflection, this case is pretty big legal news and I thought readers might want to know a little of the details surrounding the case.

Over a three day period on March 26, 27 and 28, the United States Supreme Court heard arguments on the constitutionality of the Patient Protection and Affordable Care Act. The case is officially known as Florida v. Department of Health & Human Services.  A total of 26 states are involved in the suit.

Set aside for the moment whether or not you believe the legislation is good or bad public policy. Set aside your political views and whether you love it or hate it. This blog will only examine the arguments before the court.  The conclusions are for you to draw.

On March 26, the argument before the court was the applicability of the Anti-Injunction Act, a reconstruction era law that prohibits courts from striking down tax laws before they take effect. If the Anti-Injunction Act is deemed to apply, the Supreme Court could not really decide the case because the "tax law" has not yet taken effect. 

Both parties to the suit agreed that the act did not apply. In other words, the parties want the Supreme Court to decide the case on its merits.  However, the Supreme Court appointed a third party to argue the position that the Court has no jurisdiction to hear the case because of the Anti-Injunction Act.  Most people do not believe the court will hold that the Anit Injunction Act is applicable to this case.

On March 27, the individual mandate portion of the law was argued.  This portion of the law is scheduled to go into effect on January 1, 2014.  It requires virtually all Americans to obtain health insurance or pay a penalty if they don't.

The central issue with respect to the mandate is whether it is constitutional under the Commerce Clause of the United State Constitution.  The Commerce Clause gives Congress the power to regualte commerce with foreign nations, and among the several States. 

The administration’s argument is that the mandate to buy health insurance or else pay a penalty is a permitted regulation of interstate commerce. The states argue that not buying something (health insurance) is not engaging in commerce and, therefore, can’t be regulated by the federal government.

While the administration relied heavily on the Commerce Clause, they also provide an alternative argument.  This alternative argument is that the individual mandate to buy insurance or pay a penalty is a valid exercise of Congress’ taxation power as provided by the General Welfare Clause of the United States Constitution (even though they argued that the penalty for non-compliance was not a tax in order to avoid the Anti-Injunction Act). 

The states argued that the individual mandate and penalties for noncompliance with the mandate do not fall under Congress’ taxation powers under the General Welfare clause because Congress and the administration have gone to great lengths to specify in the legislation, as well as the debate about that legislation, that the penalty for noncompliance was a penalty, not a tax.

What got the most press attention on day two was Paul Clement, arguing for the 26 states who oppose the mandate, stating that if the government can mandate that everyone has to purchase health insurance, then what can’t it mandate? Where, exactly, does the line get drawn if the Court upholds the individual mandate and what might a future Congress do with this new found power. The Justices asked about requiring people to buy cell phones, burial services, even broccoli - because it is good for you.

On March 28, the argument was over severability.  That is, since there is a lot to this law, if part of it is ruled unconstitutional, what happens to all the other parts of the law?  Can the rest of the health care law stand if the individual mandate provision is found unconstitutional.

The states contend that if the individual mandate to buy insurance or pay a penalty is found to be unconstitutional, the entire law should be struck down.

The administration says that if the mandate is considered unconstitutional, only two major provisions of the law would have to fall, but the rest of the law can stand. The administration argued that only the ban on pre-existing conditions and cap on the cost of policies should be turned down if the mandate was gone.

Prior cases have held that unless it is evident that the legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as law.  This would mean that the Supreme Court would have to figure out, based on documentation of Congress’ deliberations, whether or not Congress would have intended to pass the law without an individual mandate, and also if the law is workable, as a matter of policy, without the mandate.

The case is now with the Supreme Court.  It is up to them to decide ...