The Affordable Care Act in the Supreme Court

Background

Since its passing in 2010, opponents of the Patient Protection and Affordable Care Act have launched legal challenges on the health care reform on the basis of its constitutionality. Both state governments and private parties have attacked the law through the court system, until the case reached  the Supreme Court.  The Court heard arguments for and against the law for three days from 26 to 28 March 2012,  and will announce its decision on the case in June, well before the election in November.

The Supreme Court consists of nine judges appointed for life by the president. Currently, the Court consists of five judges appointed by Republican presidents and four judges appointed by Democratic presidents. The present court is generally considered relatively conservative in its decisions.

Oral Arguments

Oral arguments regarding the Affordable Care Act were split into three days.

Day One: Can the court rule on the law before penalties resulting from the law come into effect?

Central Point: The 1867 Anti-Injunction Act (AIA) prohibits opponents of a tax to legally challenge a tax until it comes into effect.

Applicability to the Affordable Care Act: The Affordable Care Act includes fines for individuals who have not purchased health insurance. These fines do not come into effect until 2014 and must be paid by 2015. If the AIA applies, then the Supreme Court would not be able to rule on the case until 2015.

Argument/Results: During oral arguments, justices appeared to question the applicability of the AIA. The justices suggested that the Affordable Care Act’s fines are not taxes as defined under the AIA, and that AIA limits may lack jurisdiction over the health care reform law. It seems unlikely that the Court will delay its decision on the basis of the AIA.

 Day Two: Is the individual mandate constitutional?

Central Point: The Commerce Clause of the U.S. Constitution allows Congress to make laws regulating inter-state commerce.

Applicability to the Affordable Care Act: The Supreme Court must decide whether requiring individuals to purchase a minimum level of insurance falls under the Commerce Clause or oversteps the federal government’s constitutional powers.

Argument/Results: The administration argued that all individuals are or will be in the market for health care; therefore, the law regulates how and when individuals buy insurance and falls under the Commerce Clause of the Constitution. In response, the Court’s more conservative judges posed questions implying that the law actually creates new commerce to regulate, rather than regulating existing commerce, an implication that would render the law unconstitutional.

Of the five more conservative justices, only Justice Anthony Kennedy suggested that health care is a unique industry in which every individual eventually partakes as they age. The individual mandate thus remains the most contentious point of the law, with at least four conservative judges expected to rule against its constitutionality, the four liberal judges in favor, and Justice Kennedy providing the swing vote.

Day Three: If the individual mandate is unconstitutional, what should happen to the rest of the law?

Central Point: The individual mandate essentially pays for other provisions of the Affordable Care Act, especially ending the practice of denying coverage on the basis of preexisting conditions.

Applicability to the Affordable Care Act: Because the individual mandate compensates insurance companies for several key new regulations, it is possible that the law will collapse into impracticability if the individual mandate is determined to be unconstitutional.

Argument/Results: The difficulty of severing the individual mandate and its directly related provisions from the rest of the Affordable Care Act dominated discussion before the Court. While opponents of the law argued that the law was too interconnected to survive without the individual mandate, proponents pointed out that numerous provisions have little connection to the individual mandate and would have passed Congress without it. The Court needs to determine how much of the law can survive without the mandate. Based on the arguments of 28 March, it is difficult to predict how the Court will decide.