Practitioner's Corner

An Analysis of the Supreme Court's Review of the Affordable Care Act


By Rich Meade, Vickie Walling and Elliot Vice

Rich Meade is the Chair of the Health Practice and a Managing Director at Prime Policy Group. Vickie Walling is a member of the Health Care Practice and a Managing Director.  Elliot Vice is also a member of the Health Care Practice and is a Client Executive.  The following is their account of the Supreme Court’s review of the Affordable Care Act.

This week, the nine members of U.S. Supreme Court heard six hours of oral arguments on the constitutional issues facing the federal health care law, the Affordable Care Act (Department of Health and Human Services, et. al. v. Florida, et. al.).   Their review of the Affordable Care Act and the decisions they make will have a profound impact on our health care system for years to come.

The arguments began on March 26th with the court hearing 90 minutes of arguments addressing whether the Anti-Injunction Act, a federal tax law that prohibits lawsuits from going forward before taxes are collected, prevents the court from hearing challenges to the constitutionality of the individual insurance mandate before any penalties are collected in 2014. In an uncommon scenario, both the Obama Administration, who was represented by Solicitor General Donald B. Verrilli, Jr., and the law’s opponents, who were represented by Gregory G. Katsas, argued that the Anti-Injunction Act does not apply to the health care law. As a result, the court appointed attorney Robert A. Long to argue that the tax law is applicable.

During the arguments, some of the Justices seemed to express skepticism that the Anti-Injunction Act should apply to the health care law. Chief Justice John Roberts cited a previous case involving Social Security where the tax law was not invoked, while Justice Ruth Bader Ginsburg made perhaps the strongest comment against applying the tax law in this case, by stating, “The tax injunction act does not apply to penalties that are designed to induce compliance with the law rather than to raise revenue. And this is not a revenue-raising measure, because, if it’s successful, they won’t — nobody will pay the penalty and there will be no revenue to raise.”

On March 27th, the court heard two hours of arguments addressing the constitutionality of the individual mandate, the centerpiece of the health care law that requires everyone in the country to possess health insurance coverage or pay a penalty. Many health care experts have indicated that if the court strikes down the individual mandate, it could place the rest of the health care law in peril. The Obama Administration has argued that everyone already participates in the health care market, which is why it needs to be regulated. The 26 states that have formed a coalition to challenge the law argued that the mandate is equal to the government forcing citizens to buy a commercial product.

The Justices asked Solicitor General Verrilli very difficult questions about the mandate as he made his argument. Chief Justice Roberts, who is viewed as a key swing Justice in the case, said that he saw similarities between a person’s need for health insurance and their potential need for police, fire, and other emergency services, and asked, “So can the government require you to buy a cell phone because that would facilitate responding when you need emergency services?”

Justice Anthony Kennedy, who is considered the other swing Justice, had observations that suggested to many court watchers that he was skeptical of the individual mandate’s constitutionality.  But he also seemed to challenge the argument made by Paul Clement, lawyer for the 26 states challenging the law, stating that uninsured people are part of the health insurance market “in the sense that they are creating a risk that the market must account for.”

On the morning of March 28th, the court heard 90 minutes of arguments addressing whether the remaining parts of the law can continue to be implemented and enforced if the court decides to strike down the individual insurance mandate. Lawyers faced sharp questioning from the Justices on whether it was the job of the Court or Congress to determine the fate of the remaining provisions of the health care law should the individual mandate be struck down. The Obama Administration argued that the rest of the law should remain intact while the lawyer challenging the law argued that the entire law should be thrown out. Justices questioned whether the consumer protections in the law, such as provisions that bar discrimination by insurance companies based on preexisting conditions, should be removed. Additionally, some Justices stated that they weren’t sure how they could decide which provisions Congress would have decided to include in the law if the mandate had not been included.

Later in the afternoon on March 28th, the court heard one hour of arguments addressing whether states are inappropriately being forced by Congress to extend Medicaid services to people whose incomes are up to 133% of the federal poverty level. The court’s more liberal Justices spent a great deal of time questioning Paul Clement, the lawyer for the 26-state coalition, on how receiving monies that are appropriated to states to expand their Medicaid programs could be viewed as coercive. Justice Elena Kagan stated that getting a “boatload of federal money” to spend on health care for the poor “doesn’t sound coercive to me.” The Justices were so engaged in the questioning during this session that they allotted an additional 30 minutes to both sides for arguments.

The Justices met on March 30th in their usual Friday morning confidential conference to vote on the issues involved in the case. The process of writing the majority and dissenting decisions begins.  It is usually difficult to discern definitively how a particular Justice, especially one regarded as a “swing” vote,  will decide a case based upon his or her questions at oral argument, and there have been instances of Justices changing their decision in the process of writing their opinions.

 The court is expected to hand down its decision before the end of its Term in June 2012.