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FAQ: The Supreme Court and health reform

at 11:47 AM ET, 03/12/2012


(Karen Bleier - AFP/Getty Images)
Later this month, the U.S. Supreme Court will hear oral arguments in a lawsuit challenging the health reform law’s constitutionality. Here are seven key questions and answers on where the lawsuit has been, what will happen in the Supreme Court and what it means for the Affordable Care Act:

How does the Supreme Court case challenge the health reform law?

The central argument is against the health reform law’s individual mandate: the requirement that most individuals purchase health insurance or pay a fine. To challenge that provision, health reform opponents have relied on the Commerce Clause, the part of the Constitution that gives the federal government the authority to regulate multi-state economic activity.

Health reform opponents contend that the decision not to do something — namely, not buy health insurance — is economic inactivity, rather than activity, and therefore not a behavior the federal government can regulate. Health reform supporters argue that the decision to not purchase health insurance has an economic effect. An individual without coverage, for example, may not have the money to pay for an emergency room visit, sticking hospitals or taxpayers with the bill. In that way, they say, not purchasing health insurance is an economic decision.

Many legal challenges to the Affordable Care Act have protested only that part of the law. But the case that the Supreme Court has taken up also includes an argument that challenges the Affordable Care Act’s Medicaid expansion. That part of the lawsuit contends that expanding Medicaid to cover everyone with incomes of less than 133 percent of the poverty level is unconstitutional because of the burden it places on the states.

If the individual mandate falls, what happens to the rest of the law?

The question of whether the health reform law can stand without the individual mandate — in legal parlance, whether the individual mandate is “severable” — is a pretty crucial one. The Supreme Court could strike down that particular part of the law, while letting the rest of it stand. Or it could rule that the mandated purchase of health insurance is so critical to the health reform law that if it goes down, it takes the whole Affordable Care Act with it.

The U.S. Court of Appeals for the 11th Circuit, the only appeals court to rule against the law, took the narrower option and found the rest of the law could stand without the mandate. The Obama administration has urged a slightly different interpretation. It argues that the mandate is severable from a lot of the law, but not all of it. Specifically, the Department of Justice says that if the court strikes down the mandate, it should also repeal the health reform law’s guaranteed issue provision, which requires insurers to accept all customers regardless of their health-care status.

Here’s why: With no penalty for not purchasing health insurance, but a requirement for insurers to accept anyone still standing, many expect the costs of insurance would skyrocket. Congress could, theoretically, replace the individual mandate with another policy that doesn’t run afoul of the activity-inactivity distinction — this report from the Government Accountability Office lays out a number of alternatives — but it is unlikely that congressional Republicans would permit such a fix, at least in the near term.

Who is challenging the health reform law?

The Supreme Court announced Nov. 14 that it would take up the health reform law in its 2012 term by hearing a lawsuit filed in Florida by 26 states and the National Federation of Independent Business. Earlier this year, the 11th Circuit heard that case and ruled the health reform law unconstitutional.

How have courts ruled so far?

Alongside the one in Florida, 25 other lawsuits have been filed against the health reform law. Four of those reached federal appeals courts. Courts in the District and in Michigan upheld the health reform law. But the 11th Circuit, which has jurisdiction over Florida, came to the opposite conclusion, finding the health reform law unconstitutional. The Virginia-based U.S. Court of Appeals for the 4th Circuit dismissed two cases against the health reform law for lack of standing: Since the penalties for not purchasing health insurance do not kick in until 2014, the judges concluded that those challenging the health reform law had not suffered any injury and could not bring a case. No cases aside from the Florida one, however, have been picked up by the Supreme Court.

How could the Supreme Court rule?

The court could rule that the health reform law is constitutional and allow it to move forward. It could also rule, as the 11th Circuit did, that the individual mandate falls while the rest of the law stands. The justices do, however, have another option: The court could decide that the individual mandate is so key to health reform law that, if it falls, the whole law comes down with it.

There’s also the possibility that the Supreme Court could decide that the case isn’t ripe to be heard yet, since the individual mandate has not been implemented. This would be similar to the ruling that came out of the 4th Circuit and would essentially tell the law’s opponents they can’t come back with a challenge until 2014, when the penalties for not purchasing insurance kick in.

The court will also have to rule on the health reform law’s Medicaid expansion. Since states’ participation in Medicaid is voluntary, Supreme Court watchers widely expect the justices to find this part of the law constitutional.

What happens when the Supreme Court hears oral arguments?

From March 26 to 28, the Supreme Court will hear six hours of oral arguments on the Affordable Care Act, the longest scheduled arguments in the court’s modern history. Two hours of that will focus on the individual mandate’s constitutionality. Another 90 minutes will look at that provision’s severability from the rest of the law. The court will hear one hour of arguments on the health reform law’s Medicaid expansion. Finally, the justices will spend 90 minutes debating whether this case is ripe for consideration, given that the provision in question has not come into effect.

What does this mean for implementing the law?

The 11th Circuit appeals court, which found the law to be unconstitutional, has specified that its ruling does not mean that states can refuse to move forward with implementing the law. Some states, however, have cited the legal uncertainty surrounding health reform as a reason for not implementing it. And even if the Supreme Court does uphold the Affordable Care Act, some states have vowed to continue blocking implementation.

 
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