Supreme Court to Address Healthcare Reform Law

The Supreme Court will soon weigh in on the healthcare reform law and its constitutionality by reviewing 2 key provisions of the Patient Protection and Affordable Care Act (ACA): the individual mandate and the Medicaid expansion. A new brief from the Henry J. Kaiser Family Foundation reviews the 2 cases the Supreme Court plans to consider, the arguments of each case, and the possible implications of the court’s decision. The Supreme Court plans to review 2 cases filed in Florida that challenge the constitutionality of the 2010 healthcare reform law. The first case, National Federation of Independent Business (NFIB) v Sebelius, was brought to court by the NFIB and 2 individual plaintiffs who do not currently have health insurance. They claim that the individual mandate—or the stipulation in the reform act that requires that most people maintain a minimum level of health insurance coverage—is not a valid exercise of Congress’s legislative powers. The second case, Florida v Department of Health and Human Services, was filed by the state of Florida and has been joined by 25 other states that claim the ACA’s mandatory expansion of eligibility for Medicaid benefits is an unconstitutional use of Congress’s spending clause power. Under the ACA, those states that choose to participate in the Medicaid program would have to follow federal rules that would further expand coverage to include nearly all people <65 years of age with household incomes ≤133% of federal poverty level starting in January 2014. The federal government plans to pay 100% of the states’ cost to expand the coverage in 2014 and then plans to gradually decrease its financial assistance to 90% in 2020. This second case also contends that the individual mandate is unconstitutional. The key arguments from the plaintiffs related to the individual mandate center around 3 constitutional provisions: the commerce clause, the necessary and proper clause, and the taxing power. For instance, the plaintiffs argue that the individual mandate compels people to enter commerce, which is an unprecedented use of Congress’s power under the commerce clause. However, the federal government contends that they can require people to purchase health insurance because it would limit the burden of uninsured individuals on other people within the market and is a service most people will use during their lifetimes. In addition, the federal government argues that it has the right to enact the individual mandate because it is a valid use of Congress’s ability to enact laws that are “necessary and proper.” However, the plaintiffs do not believe this clause is an independent source of federal legislative power and would not be enough to protect the mandate if the court ruled that the mandate violated the commerce clause. Finally, the plaintiffs believe that the individual mandate is not a proper use of Congress’s taxing power, because they say the penalty for those who fail to comply is more of a civil regulatory penalty than a tax. The federal government argues that the mandate’s “practical operation” is indeed a tax. The Supreme Court will have to decide the constitutionality of the individual mandate; however, if they invalidate the mandate, they will also need to decide whether it can be severed from the rest of the law. The decision could determine whether other provisions of the ACA could survive. There are also varying opinions on the constitutionality of the Medicaid expansion. One of the key arguments in that case is whether the expansion is a valid exercise of Congress’s spending power. Before the Supreme Court can rule in either case, it will need to decide whether it can rule on the lawsuits or whether it will be prohibited from doing so due to a federal Anti-Injunction Act that prevents courts from currently deciding lawsuits about the ACA. Lower courts have already voiced their opinions on the issues. The 11th Circuit Court of Appeals struck down the individual mandate but upheld the Medicaid expansion. The Supreme Court is expected to hear oral arguments in the cases in late March. Although no specific timeframe has been given, according to the Kaiser Family Foundation, the court will likely reach a decision before the term closes in June.