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Hearings suggest Supreme Court is split on what to do about the Accountable Care Act

April 2, 2012

The Supreme Court wrapped up three days of hearings on the “Patient Protection and Affordable Care Act” (ACA) last Wednesday, with the justices appearing divided over whether all, some or none of the health care law should stand if the individual mandate, a critical part of the law that would require Americans to purchase insurance, is struck down.

Wednesday’s sessions were devoted to the questions of whether the law can survive without the individual mandate; and whether the law coerces states to expand Medicaid. And if the law is coercive, does it matter legally?

The government argued that only two provisions of the law – a prohibition against insurers discriminating against people with preexisting conditions and a limitation on how insurers set rates – depend on the mandate. The rest of the law should stand.

Justices Sonia Sotomayor, Elena Kagan and Ruth Bader Ginsburg seemed to agree with the government’s argument.

Justices Antonin Scalia, Anthony Kennedy and Samuel Alito appeared to agree with the plaintiffs that the whole law should fall if the mandate falls, and expressed concerns for the losses insurers would suffer if the two provisions remained in place. Chief Justice John Roberts pointed out that much of the ACA is totally unrelated to the mandate, but also expressed con­cerns about the economic consequences of leaving only part of the law in place. Justice Stephen Breyer questioned how the Court should decide which provisions stay and which fall, and floated the idea of a remand to the lower courts to work it out.

On the Medicaid question, some justices, including Kennedy, expressed concern whether states actually have a choice to accept the new Medicaid funding, while others appeared to reject the coercion argument on the facts and the law.

The individual mandate.

Wednesday’s legal doubleheader came a day after the court’s conservative justices questioned the constitutionality of the individual mandate. The sessions began on Monday, with the court hearing arguments on whether the 1867 “Anti-Injunction Act” prevents the justices from ruling on the health care law before its individual mandate takes effect in 2014.

The 26 states and others challenging
the law argue that the individual mandate is unconstitutional and should be struck down because it requires most Americans to purchase health insurance or pay a fee to the Internal Revenue Service if they don’t.

Based on questions posed by the court, Breyer, Kagan, Bader Ginsburg and Sotomayor seemed to favor upholding the mandate.

Scalia and Alito appeared deeply skeptical of the mandate. Justice Clarence Thomas did not question either side, as is his practice during oral arguments.

Roberts and Kennedy joined in vigorous questioning of both the governments’ and plaintiffs’ attorneys. Kennedy called the mandate “unique” and Roberts suggested that everyone is already participating in the health care market. Kennedy seemed to suggest that a mandate directed at individuals could be upheld only if the government offered an extremely powerful justification.

In defending the mandate, Solicitor General Donald Verrilli argued that it would not open the door to other requirements to buy products
because health care is unique. He said that if a person elected not to get health insurance, but then got sick – as nearly everyone will at some point – that person would pass along costs to everyone else.

To prevent that, Congress can use its authority under the commerce clause of the Constitution to impose the mandate as a way to regulate health insurance.

Predicting outcomes from oral arguments is “an inexact science,” said Dominic Perella, an attorney with Hogan Lovells US LLP, who attended last week’s arguments and co-authored the AHA’s friendof- the court briefs supporting the constitutionality of the ACA.

“Justices sometimes play devil’s advocate. Other times they ask tough questions even of the side they support; still other times they may genuinely be on the fence.”

Perella, in his blog about last week’s sessions at ahahealth reformlaw.wordpress.com,
said the justices’ questions suggest four are “yes” votes on the mandate; three are “no” and two – Roberts and Kennedy – are unclear. Kennedy “clearly thinks the individual mandate represents an expansion of federal power,” Perella blogged. “His willingness to vote in its favor – and thus the mandate’s fate – may turn on whether he can find a way to write a narrow opinion that blocks future congressional attempts to make Americans buy products against their will.”

In a brief filed in January with the Supreme Court, the AHA and three other national hospital groups reiterated their support for the individual mandate. However, if the court decides that the mandate is unconstitutional, the justices should decide whether other parts of the law can go forward and not send the case to lower courts for fact finding, the groups said. If the mandate is scrapped, they said the court also should eliminate provisions that cut more than $200 billion from hospitals2019 Medicare and Medicaid payments over 10 years. The court is expected to issue its ruling in June in the cases, United States Department of Health and Human Services v. State of Florida and National Federation of Indepe ndent Busi-nesses v. Kathleen Sebelius. [Editor2019s note: As the Supreme Court prepared to hear oral argu-ments on the health care law, AHA Executive Vice President Rick Pollack joined the AHA2019s Hospitals & Health Network online to talk about the issues before the court and the outlook for health care policy this year. Hear what Pollack had to say by visiting http://www.hhnmag.com/hhnmag/HHNDaily/HHNDailyDisplay.dhtml?id=5970009791