The Health Care Case's Legal Maze

When the Supreme Court hears arguments Monday in the big health care cases, it will be considering much more than a simple yes-or-no question about whether the 2010 health care reform law is constitutional. That might be hard to determine from the public discussion, which has focused on the case’s core question—whether the individual mandate to buy insurance exceeds Congress’s power. Polls show that a small majority of Americans simply believe that the Court will overturn the law.

But the health care case is complicated, and the Court is considering a series of legal questions with interrelated answers. It could uphold or strike down the law, but it could also throw the suit out or perform surgery on health care reform. Here are a few of the possible outcomes:

     The Court says come back in three years. Monday’s argument will be about a technical statutory question that could have a huge impact on the direction of the case—whether a 19th-century tax law means the Court has no jurisdiction to consider challenges to the mandate this year. Court watchers say the odds of such a decision are slim but not impossible. The question is legally close, and the justices may be tempted to avoid the bad optics of a big political opinion in the midst of the presidential election. "The Court might think, you know, it might be better not to decide it in the middle of a presidential election," former Solicitor General and O'Melveny & Myers partner Walter Dellinger said at a briefing this week.     The Court upholds everything. Despite all the debate, protest, and the public’s ambivalence about the health care law, a majority of Court experts think that this outcome is likely. A recent American Bar Association poll of “a select group of academics, journalists, and lawyers who regularly follow and/or comment on the Supreme Court,” predicted wins for the government on both key constitutional questions. There are four reliable votes for the government (the Democratic appointees), one predictable vote against (Clarence Thomas), and four justices who, to varying degrees, are in play.      The Court abolishes the mandate, but just the mandate. If the Court finds the individual mandate unconstitutional, it then has to decide what happens to the rest of the law. That argument happens on Wednesday. The health care law lacks a severability clause, a common legislative tack-on that says what parts of the law can be divided from the rest if the courts identify a problem. None of the parties wants the Court to sever just the mandate—the challengers want the whole law abolished, and the government says such a result could wreak havoc on the insurance markets.       Bye-bye, health care reform. The Supreme Court is usually not enthusiastic about making decisions that amount to rewriting legislation. That is one reason the justices could decide that the mandate was such a key piece of the law that, without it, health care reform would never have passed. "I don't think they'll split the baby," said Todd Gaziano, the director of the legal center at the Heritage Foundation, and an opponent of the law. Of course, the health care reform law contains much more than just the mandate and subsidies for the uninsured. It created Medicare payment reforms; it includes funding for the Children’s Health Insurance Program; it requires insurers to cover adult children up to age 26 on family policies; it requires restaurants to put calorie counts on their menus; and large employers to provide places for women to express breast milk. A decision striking down the whole law would be a big victory for the law’s opponents. But it would leave Congress and the Department of Health and Human Services with several messes to fix, and fast. "I think it would be a tremendous disruption in the operation of our health care system," said Timothy Jost, a law professor at Washington and Lee University who supports the law.    Out go the insurance reforms. The government is arguing that the mandate is needed to make other insurance reforms in the law work—the requirement that insurers take all comers and the limitations on how much they can vary prices according to age. The Court could excise those provisions with the mandate. The Court could also slice and dice the law in any number of other ways. Every interest group imaginable has filed a friend-of-the-court brief suggesting what provisions should be cut or saved. It would not be fun to be a law clerk assigned to this question.     No more Medicaid expansion. The mandate has been getting all the attention, but the Court is also considering another hot constitutional question: Does the law’s expansion of state Medicaid programs inappropriately use Congress’s spending power to coerce the states? No federal court has ever struck down a law on this basis, and experts across the political spectrum think a win for the challengers on this question is very unlikely. But the Court’s answer could have very big repercussions outside of the health care sphere. Congress has grown very fond of using the carrot of federal funding to compel all sorts of state action, in areas as broad as educational policy, civil-rights enforcement, and the drinking age. And even a decision upholding the law could include some guidelines that would signal the Court will limit Congress's powers in the future. "I think this is one where the challengers can win by losing," said Kevin Walsh, an associate law professor at the University of Richmond former Antonin Scalia clerk.

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Legal Experts See a Close Win for Health-Reform Law

THURSDAY, March 22 (HealthDay News) -- The U.S. Supreme Court seems likely to uphold the sweeping health-reform legislation known as the Affordable Care Act when it takes up the case next week, according to a small survey of legal experts.

The experts base this prediction on a number of factors linked to the nine justices' legal history, political considerations and the constitutional questions raised by the case itself.

"The folks [26 states] who are challenging the act have somewhat of an uphill battle," said Gregory Magarian, a professor at Washington University Law School in St. Louis. "It's been some time since the court has struck down a major piece of federal legislation on the theory that it exceeds Congress' constitutional authority."

The major argument over the constitutionality of the law -- passed by Congress and signed by President Barack Obama in March 2010 -- centers on the so-called individual mandate. That's the piece of the Affordable Care Act that requires most adults in the United States to have some sort of health insurance or face a fine.

The individual mandate offers the law's opponents fodder for debate, Magarian said, because it requires people to purchase health insurance whether they want it or not.

"That's something the federal government has never exactly done before," he said.

State governments have made related requirements of people -- auto insurance being the most prominent example. But even a requirement to purchase auto insurance isn't universal.

"You can avoid buying auto insurance by not having a car," Magarian said. "Being alive is what triggers the requirement for health insurance."

But, many of the legal experts surveyed believe the justices will conclude that the individual mandate falls squarely within the confines of the Commerce Clause, the part of the U.S. Constitution that gives Congress the right to govern interstate economic activity.

"There really is an interstate commercial effect of not having a federal health-care policy," said Leslie Meltzer Henry, an assistant professor at the University of Maryland School of Law. "In the absence of federal intervention in this area, individuals who desperately need insurance can't get it."

The law professors said the individual mandate is needed to make many of the Affordable Care Act's provisions work. For example, insurance companies that will be required to cover everyone -- even people with preexisting health conditions -- can only survive financially if most adults are required to buy health coverage, whether they are healthy or sick. That will ensure there's enough money in the risk pool.

Neil Siegel, a professor of law and political science at Duke University School of Law, noted that the U.S. Supreme Court has in recent years acted to limit some of Congress' powers under the Commerce Clause. But those cases involved social issues such as banning the carrying of firearms in public schools. Conversely, Congress' economic powers under the Commerce Clause have been upheld and protected by the high court, he added.

"The court has held that in issues of economic activity, Congress can act as if we have an integrated national economy," Siegel said. "Here you have economic conduct [health care] with massive interstate effects. Health care is an area of already pervasive federal regulation."

There are other considerations at work that will affect the justices' decisions, the experts said.

While the Supreme Court hasn't been shy about reversing some legislation, the experts said you have to go back to the Great Depression and President Franklin D. Roosevelt's New Deal to find an example of the High Court striking down a landmark piece of legislation as large and momentous as the Affordable Care Act.

"I think it's unlikely the court wants to create a major public or policy upheaval, which is what it would be doing if it overturned the law," said Robert Field, a professor of law in the department of health management and policy at Drexel University's School of Public Health in Philadelphia. He added that a rejection of the law could potentially have consequences for other major federal programs such as Medicare, Medicaid and Social Security.

But Stephen Presser, professor of legal history at Northwestern University School of Law, believes the health-reform law will be ruled unconstitutional in a narrow 5-4 decision.

"I think [Justices Antonin] Scalia, [Clarence] Thomas, [Samuel] Alito and [John] Roberts will all have to view this as Congress going much too far and virtually ignoring the 10th Amendment," Presser said. "Justices [Stephen] Breyer and [Ruth Bader] Ginsburg have always been strong voices for expanded Congressional power, and Justices [Elena] Kagan and [Sonia] Sotomayor are not going to embarrass the man [Obama] who appointed them, so there are four sure votes to uphold the legislation as well. That leaves only [Anthony] Kennedy as the swing vote, as most commentators, I think, understand."

And Presser believes Kennedy will vote with the conservative justices, based on prior rulings that have argued for states' rights as the best way to preserve individual liberty. "If he follows that logic he will have to vote to overturn the ACA's individual mandate," Presser added.

Political considerations will also be in the back of the justices' minds, the experts said. The challenge to the Affordable Care Act is taking place in a presidential election year, and could strongly affect President Obama's re-election chances.

"If the court strikes down the act," Magarian said, "all of a sudden, the left/center-left is going to be whipped into a frenzy. The path of least resistance would be to uphold the thing and let the status quo stand."

But, some of the experts believe there's also a good chance the Supreme Court will punt on the issue, declaring that the time isn't right for judicial review of the Affordable Care Act.

"I think it's interesting they're going to spend a lot of time -- a third of oral arguments -- on whether the case is 'ripe' for judicial review," said Drexel's Field. "That could be a signal from the court that they're spending that much time on that part of the argument."

Added Allison Orr Larsen, an assistant professor of law at the College of William & Mary in Williamsburg, Va.: "My best guess would be they don't decide it on the merits."

The reason why: the individual mandate, which takes effect in 2014, is a form of tax, and federal law doesn't allow a legal challenge to a tax that has yet to be collected.

"You can't challenge a tax until after you've paid it, and then you can sue for a refund," Larsen said, noting that this legal argument has come up in some lower court rulings on the law.

Such a ruling would delay any challenge to the Affordable Care Act until 2015. This would give the Supreme Court the chance to take the issue off the table in an election year while not explicitly endorsing or scuttling the law. "That's why I think it would be an attractive option for them," Larsen said.

Field agreed. "There's a good chance that they'll do that," he said. "The public might be left very frustrated, from not having a definitive answer, but we should be prepared for that outcome."

All the legal observers believe that the court's reasoning will become much clearer during the three days of arguments that begin on Monday.

"Because the hearing is going to be so long, I think we're going to come out of it with a good idea of what the justices are thinking about," Magarian said.

More information

For more about the current justices, visit the website of the Supreme Court of the United States.

To read an overview story on the Affordable Care Act, click here.

To learn more about the expansion of Medicaid under the Affordable Care Act, click here.

To learn more about the importance of the individual mandate to the Affordable Care Act, click here.

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Health Policy and Legal Experts Discuss U.S. Supreme Court’s Upcoming Ruling on Health Reform

NASHVILLE, Tenn.--(BUSINESS WIRE)--

Nearly 300 members of the Nashville Health Care Council and Leadership Health Care heard from a diverse panel about the future potential implications of the U.S. Supreme Court’s pending decision on the constitutionality of the Patient Protection and Affordable Care Act.

"The highly anticipated Supreme Court decision on health reform is much more than a legal opinion, it’s a defining event in the health care marketplace," said panel moderator Dick Cowart, chairman, Health Law & Public Policy Department, Baker, Donelson, Bearman, Caldwell & Berkowitz. "These historic proceedings have the potential to change the way health care companies do business."

The Court will hear arguments on the Affordable Care Act from March 26-28, just over two years after the bill’s passage into law. The Act made sweeping changes to the nation's health care system, including individual and employer insurance provisions, payer requirements around preexisting conditions, age thresholds and preventative care, along with Medicaid expansion.

The panel, Supreme Decision: The High Court on the Affordable Care Act, discussed views on how the Court’s decision could impact health care providers, payers and consumers. Participants included Lyle Denniston, journalist and dean emeritus of the U.S. Supreme Court Press Corps; Paul Heldman, senior health policy analyst, Potomac Research Group; Tony Hullender, senior vice president and general counsel, BlueCross BlueShield of Tennessee; and Tevi Troy, senior fellow, Hudson Institute, and former Deputy Secretary, U.S. Department of Health and Human Services.

View panel member interviews on YouTube and event photos on Flickr. Photo credit: (c) 2012, Harry Butler, Nashville.

The Court has established an unprecedented six hours for the oral arguments. During the March proceedings, the Court will evaluate four issues relating to the law, including: 1) the “individual mandate,” or requirement that every American citizen purchase health insurance; 2) “severability,” whether the overall health care law can stand even if the individual mandate provision doesn’t; 3) the law’s new Medicaid requirements for states and 4) the Anti-Injunction Act, whether it’s appropriate for courts to currently hear challenges to the law given that its mandates do not take effect until 2014.

“The Court is taking this matter very seriously, as it should, given the scope of the law and the kinds of changes it represents, not only to the health care system but also to matters as grand as the separation of powers and the very structure of our constitutional republic,” said Troy.

According to Denniston, the case is multi-layered and historically significant. “The Court could have only focused on the constitutionality of the individual mandate,” he said. “But the Court has chosen broader deliberations around severability and the implications of the law’s expansion of Medicaid.”

The health insurance industry, a sector integral to health reform’s impact, is poised for implementation regardless of the outcome. "The individual health insurance mandates are a key part of health care reform's goal to control the cost of care,” said Hullender. “With this in mind, our industry understands the need for their inclusion in the original law."

Heldman said he leans toward the view that the law's requirement that individuals buy insurance will be upheld. "It’s our thinking that the Supreme Court will leave much of the health reform law standing, even if it finds unconstitutional the requirement that individuals buy coverage. But, in my opinion, removing the individual mandate could destabilize the insurance market and negatively impact providers who might be exposed to increased bad debt.”

The panel discussion comes on the eve of the Leadership Health Care’s 10-Year Anniversary Delegation to Washington, D.C. The annual trip will feature industry perspectives on key components of health care reform, discussions on federal reimbursements and budget issues, and expert views on the likely outcomes and industry impact of both the March Supreme Court hearing on reform and the November elections.

“Today’s discussion was an exceptional opportunity to hear from experts and key stakeholders on this highly anticipated decision,” said Council President Caroline Young. “The outcome will have an unprecedented impact on the future of the Affordable Care Act, the national landscape of the health care industry and Nashville as a health care capital.”

About the Nashville Health Care Council

The Nashville Health Care Council, founded in 1995 as an initiative of the Nashville Area Chamber of Commerce, is an association of health care industry leaders working together to further establish Nashville’s position as the nation’s health care industry capital. Worldwide, Nashville’s health care industry generates more than $70 billion in revenue and over 400,000 jobs, and is Nashville’s largest and fastest growing employer. For more information on the Council, please visit www.healthcarecouncil.com.

About Leadership Health Care

Leadership Health Care (LHC) is an initiative of the Nashville Health Care Council started in 2002. LHC fosters the next generation of health care leaders by providing educational and networking opportunities for over 650 motivated professionals. Learn more at www.leadershiphealthcare.com.

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