Legislative Update: Week of June 25th (Special Edition)

Back in late March the Supreme Court of the United States took up the four suits surrounding the Patient Protection and Affordable Care Act. The four major questions that were considered by the court over the three days were:

1.      Is the penalty fee for not complying with insurance mandate considered a tax and if it is not if the Anti-Injunction Act, which does not allow persons to sue the government over taxes, to have jurisdiction over this penalty?

2.      Is the mandate to purchase health insurance unconstitutional?

3.      If the mandate is determined unconstitutional does the rest of the bill still have standing (severability)?

4.      Does the expansion of Medicaid coerce the States to participate in the expansion?

Today the court renders its decisions on these questions, let's review the opinion:

Chief Justice John Roberts delivering
the Court's opinion (courtsey of AP)

The court today issued its opinion combining all of the cases together and rendered its opinion in National Federation of Independent Business v. Sebelius, Chief Justice John Roberts issued the opinion of the court which affirmed some parts of the act and reversed other parts of the act. Lets break down the issues:

Anti-Injunction Act:

The question that was raised whether the penalty imposed for not buying insurance is protected under the Anti-Injunction Act (AIA). The AIA provides protections to the government limiting the ability of someone to sue the government over taxes. The taxes need to be in effect before a suit may be filed for harm by the tax. Arguments were that since this was a penalty and not a tax the people had the ability to sue before the penalty took effect to stop the future harm it could have caused. Chief Justice Roberts along with Justices Ginsberg, Kagen, Sotomayor and Breyer disagreed with that argument says that the government claims for protection under the AIA was upheld due to the next issue.

Individual Mandate:

Arguments against the mandate claimed that the commerce clause of the Constitution did not give Congress the authority to compel the purchase of goods and services and that the ACA compelled the people to purchase health insurance. The government disagreed with this argument and also argued that Congress also had the authority to mandate the purchase of health insurance since the penalty is a tax to those who do not purchase and Congress has the authority to levy taxes under the Constitution.

The majority of the court agreed that the commerce clause of the Constitution did not have the authority to compel the people to purchase a product but the court did uphold the mandate agreeing with the government's second argument that the penalty was a tax and Congress has the authority to levy taxes and that the government is taxing the people either through the purchase of insurance or those choosing the pay the penalty for not purchasing.  Chief Justice Roberts writes,

"The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax."

Since the Court ruled that this was indeed a tax the arguments for the AIA issue above by those against the ACA fall.

Severability:

This was a non issue due to the mandate being upheld.

Medicaid:

This section is where those who were against the government actually won their arguments with the Justices. Those against the ACA stated that the Government did not have the ability to "bully" States into the Medicaid expansion by stating their entire funding would be taken away providing the opportunity to be coerced into expanding their Medicaid programs. The Government argued that this was a Government program and Congress had the ability to create any condition and terms for the program it saw fit. The Court disagreed with that opinion. The Court opined that the Government could not keep existing Medicaid funding away from the States that choose not the expand their Medicaid program.

Chief Justice Roberts stated, "The threatened loss of over 10 percent of a State's overall budget is economic dragooning that leaved the States with no real option but to acquiesce in the Medicaid expansion." This now leaves the option to the States whether they choose to expand their Medicaid coverage to the population requirements set in the ACA.

At the end the decision was 5-4 with Chief Justice Roberts and Justices Ginsberg, Breyer, Sotomayor and Kagen concurring and Justices Scalia, Kennedy, Alito and Thomas dissenting.

Chief Justice Roberts finished his opinion with this:

"The Framers created a Federal Government of limited powers, and assigned to this Court the duty of enforcing those limits. The Court does so today. But the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that is the judgment is reserved to the people."

For the entire opinion from the court click here.

Legislative Update: Week of March 26th (Special Edition)

This week the Supreme Court of the United States took up the four suits surrounding the Patient Protection and Affordable Care Act. The four major questions that were considered by the court over the three days were:

1. Is the penalty fee for not complying with insurance mandate considered a tax and if it is not if the Anti-Injunction Act, which does not allow persons to sue the government over taxes, to have jurisdiction over this penalty?
2. Is the mandate to purchase health insurance unconstitutional?
3. If the mandate is determined unconstitutional does the rest of the bill still have standing (severability)?
4. Does the expansion of Medicaid coerce the States to participate in the expansion?

Let's review the activity of the court:

Monday:

View of the Court on Monday

On Monday the court heard argument surrounding the penalty that Congress had placed in the Affordable Care Act for those individuals who do not purchase health insurance. The main question of the matter was whether this penalty was subject the a law called the  Anti-Injunction Act. The general summary of the act states that no one may file suit to stop the collection of tax from any person for any purpose.

The Government had submitted to the court that since there were some penalties that had been defined in the IRS code were able to fall under the auspices of the act since in other cases from the court they had determined that if the penalties were able to be defined in the IRS code they were able to be under the jurisdiction of the injunction act. There is a caveat to this point though, those penalties were found the be revenue generating for the government and were specifically written that way by Congress.

The counter was just the opposite. Since this was written in a way that if every person complied with the statute the government would not produce any revenue. Justice Ginsberg solidified that point stating just that, if the everyone complied with the act no revenue would be generated due to the penalty. After the arguments it was plain to see that the government had struggled making their case to all of the justices.  Transcripts and audio of the proceedings are available online for your review.

Tuesday:

Tuesday was the big day at court as both parties argued the merits of the individual mandate provision of the Affordable Care Act. This day found the government again on their heals trying to make their claim that the mandate was constitutional. The crux of the government's argument stems over Congress's ability to extend the  Commerce Clause to compel citizens to participate in a market. The Commerce Clause is found in Article I of the Constitution stating that Congress has the authority to regulate commerce between the states.

Paul Clement in front of the Supreme
Court in Washington D.C. on Tuesday
as the court continued hearing
arguments on the health care law.
(Credit AP./Dana Verkouteren)

The Government stated for Congress to achieve their goals of creating an environment to create affordable care that they needed to regulate the health care market and by doing that they are compelling people to purchase health insurance and enter the health insurance market since insurance will be the way that people pay for health care. It provides stability in the health care market which will lower costs.

Counter to that argument was two fold first your are compelling people to enter a market that they may not want to enter into and if they do then purchase coverage that they do not need. Chief Justice Roberts commented on this point  stating that if he was to enter that market he would be compelled to purchase pediatric and maternity coverage which he would never be able to use. By doing that that he would be supporting the rest of the pool that would need more coverage by paying for services he didn't need. Secondly respondents say that this is truly not interstate commerce but intrastate commerce. States have always had the ability to control their individual insurance markets including government programs like Medicaid.

The Government again took the brunt of the questions and contradictions from the Justices concerning their case. Transcripts and audio of the proceedings are available online for your review.

Wednesday:

Wednesday saw the court handling the final two issues, one if the mandate falls does the rest of the act have to fall as well and does the Medicaid expansion  coerce the states to engage in that expansion? This day listening to arguments, you found the court more politically divided and finding the Government on the Medicaid claim on stronger ground to support the Affordable Care Act.

Attorney Paul Clement speaks before
the Supreme Court on Wednesday
(Credit AP/ Dana Verkouteren)

The Government made the claim that if the mandate was eliminated from the Act the provisions such as prior conditions exclusion and community based services will still be allowed to stand along with others. Justices Breyer agreed with some of these arguments stating that the law did have items that were not attached to the mandate provisions and that States were already doing. But Justice Scalia on the other hand did not agree stating that if you take the guts out of the bill or the heart can it really survive?  Petitioners stated that when you look sever the issue you create a huge problem for insurers that have to meet a mandate to provide coverage at certain levels and to certain individuals with out having the assurance that people will get insurance. It places an unfair burden on business and insurance if the issues is not severed. Transcripts and audio are available online for your review.

 

 

With Medicaid, you found the Government at its strongest during the three days of hearings. There has been previous court precedent along with congressional precedent that provided Congress the ability to expand the Medicaid program and provide funding for such an expansion. The counter argument from the Petitioners was the the States were being coerced to enter into the Medicaid expansion since the funding that the States currently used for the existing program could be in danger if they did not accept the funding for the increase in population in the program. This is where the Justices has a hard time understanding the arguments of the Petitioners. Justice Kagen stated that if you were given a boatload of free money wouldn't you take the free money? The argument back was no since it was not known where the money had originated from. With the Medicaid expansion it was the people that are paying for the expansion through tax dollars and were being coerced to support a program that they did not want to in the first place. Transcripts and audio can be found online for your review.

What's Next?

The court will now consider the arguments it heard and the briefs that were submitted to the court and issue an opinion. Usually opinions are issued from the judicial session of the court in early June but due to the sensitivity of the issue and with States waiting to now have an opinion, the court could issue an opinion earlier than June.