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Health Care Before the Supreme Court

The Health Care Law Before the Supreme Court

For three days beginning on March 26, the United States Supreme Court will hear arguments regarding the constitutionality of the new health care law. The Court's decision will mark the culmination of a legal battle which began the moment the law was signed by President Obama on March 23, 2010. Under specific consideration are the law's Medicaid expansion and what has become known as the "individual mandate": the law's requirement that every American purchase government-approved health insurance or else pay a fine.

There are four questions before the Court:

1) Is the individual mandate Constitutional?
2) Can the overall law stand without the individual mandate?
3) Is the massive Medicaid expansion in the health care law Constitutional?
4) Does the individual mandate constitute a tax?

Like most cases considered by the Supreme Court, these issues have gone through our lower court system of district and appellate courts. Some district judges have upheld the law. Others, such as Judges Roger Vinson in Florida and Henry Hudson in Virginia, have ruled the law is unconstitutional. The Florida ruling was appealed to the Supreme Court and is the case being considered.

Is the individual mandate Constitutional?

Perhaps the most important issue in question is the Constitutionality of the individual mandate. This has been a central question in the district and appellate court rulings.

If any provision passed by Congress does not fall within the construct of the Constitution, it must be ruled unconstitutional. So, the Supreme Court must determine whether  the Constitution gives Congress the authority to enact the individual mandate. The mandate requires every American to purchase health insurance whether they want it or not. Defenders of the law point to the Commerce Clause of the Constitution, but doing so suggests there is no limit to Congressional authority.

The Commerce Clause

Found in Section 8 of Article I of the Constitution, the Commerce Clause reads: "The Congress shall have Power … to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

At the time the Constitution was written, the term "commerce" was generally considered as a synonym for "trade." Indeed, many of our founding documents written by James Madison, Alexander Hamilton, and others, refer to commerce as such. Yet in the years since, courts have continuously expanded the scope of the Commerce Clause. The Court must now decide whether requiring Americans to buy specific goods or services that they would otherwise not purchase is Constitutionally permitted.

Supporters of the law argue the individual mandate falls under the Commerce Clause because those declining to purchase health insurance are engaging in an economic activity. If the Supreme Court upholds this argument, Congress’ power to force Americans to purchase – or not purchase – goods and services will be limitless. That’s a slippery slope and essentially means that from this day forward the Commerce Clause, originally intended to define and limit the scope of Congress’ power, would virtually give Congress a blank check to regulate every aspect of our lives.  

Severability: Can the overall law stand without the individual mandate?

This leads us to the question of severability. Suppose the Supreme Court does rule the individual mandate to be unconstitutional. Can the rest of the law stand? 

This question concerns whether the individual mandate is integral to the law, or whether the mandate is simply a minor detail in the entire law.  There is good reason to think that the individual mandate is the cornerstone of law.  The mandate was touted by the bill's supporters as the central to the bill's viability because it would purportedly hold down costs and widen health insurance coverage. One of the bill's lead authors, for example, said:

“[The Congressional Budget Office], again, states this requirement is one of the most critical pieces of reform. Without it, we lose coverage for millions of Americans. Without it – without that reform – premiums could spike by up to 15 to 20 percent in the non-group market.”

Although the law will not likely accomplish either of these goals, the fact that the law's supporters made these arguments shows us the mandate is vital to how the law was supposed to work, and that the law's authors intended the mandate to work together with the law’s other provisions.

If the Court attempts to simply strike the mandate, it will face serious additional Constitutional questions.  The structure of the Constitution establishes that Congress writes law, the Courts uphold the law, and the executive branch implements the law.  If the Court now strikes down the individual mandate but upholds the rest of the law, we would have an entirely new law that was neither passed by Congress nor signed by the President. The Supreme Court would have essentially turned itself into part of the legislative branch, a violation of constitutional provisions we know as separation of powers and checks and balances.

Therefore, if the Court finds the mandate unconstitutional, it must strike down the law in its entirety. 

Is the massive Medicaid expansion in the health care law Constitutional?

The Court will also address whether the Medicaid expansion - and thus each state’s financial obligation to fulfill it – is Constitutional.  This question involves the limits of the federal government’s power over states in the federal system established by the Constitution.  At its most basic level, the federal government may not make the financial sanction of failing to follow a federal mandate so severe as to leave the states with no practical choice but to follow the federal rules. 

Unfortunately, it appears that the health care law has done exactly this.  Some states have argued that the additional burdens of the expansion will be severe, but also that the financial consequences of losing the federal funding for Medicaid would bankrupt the state. This leaves states no practical choice but to follow the federal rules, and cut other state spending priorities.  

Anti-Injunction Act: Does the individual mandate constitute a tax?

The court may also consider whether the individual mandate is considered a tax. Federal law requires that a plaintiff challenging the federal government’s taxation power can do so only after the tax has taken effect. Because the individual mandate provision does not kick in until 2014, should the court rule it is a tax, the Court could choose not to rule on the mandate until 2014.

Waiting two more years for such a ruling would be devastating. By that time, much of the law will have been implemented, including new taxes. States will also have invested time and money in setting up their new exchanges.   

Outlook

This case is one of the most important the Supreme Court has considered in recent years. The precedent it will establish and the impact it will have on our health care system and our economy as a whole explains why the Court is scheduled to hear six hours of oral arguments – much more than usual. As has happened so often in our country's history, the Supreme Court’s decision will have dramatic consequences for Congressional authority; expanding it further into uncharted territory by upholding the law or placing a check on Congressional authority by striking the law down.

 The Court will likely issue a ruling in June.