Friday, March 23, 2012

Primer on the Supreme Court arguments

There's an excellent primer on the Supreme Court arguments in the health reform case at Kaiser Health News. My own primer is below, for those of you who don't get our monthly e-newsletter (for which you can sign up here).

Three days of oral argument will begin on March 26. So I thought I would give you a bit of a primer, both on the Court and on the issues in this case. This is not (at least to start with) an argument for or against; this is a guide to help you understand all you will be hearing in the next week.

The Supreme Court is made up of nine Justices -- three women (Ginsburg, Sotomayor and Kagan) and six men (Chief Justice Roberts, Breyer, Thomas, Scalia, Alito and Kennedy). All three women and Justice Breyer make up a fairly reliably liberal wing; Justices Roberts, Thomas, Scalia and Alito make up a fairly reliably conservative wing, although some experts are saying that Chief Justice Roberts also is not quick to overturn Acts of Congress and he cares about his legacy as Chief Justice, so there is speculation that he may swing with wherever the majority is in this case. Justice Kennedy most often is the swing vote. It's very rare for the Court to hear multiple days of argument in one case; it has never happened, to the best of my recollection, in the years I've been a lawyer (which is a lot of years!). Although argument will take place this month, we should not expect a decision until late June, when the Court ends its Term.

There are four issues presented in this case: (1) Is the individual mandate -- the requirement that everybody purchase insurance -- a valid exercise of Congress's powers? (2) Is the Medicaid expansion an encroachment on state sovereignty? (3) Is the case barred by the Anti-Injunction Act? and (4) If the Court strikes down the individual mandate, should the rest of the law remain, or must the Court strike down the whole thing (called severability)?

Monday 10 - 11:30 am: Anti-Injunction Act
Tuesday 10 to noon: Minimum coverage provision (individual mandate)
Wednesday 10-11:30: severability & 1-2 pm: Medicaid expansion

The case will be argued by the Solicitor General of the United States, Donald B. Verrilli, Jr. in favor of upholding the law; Paul D. Clement on behalf of 26 states and Michael A. Carvin on behalf of the National Federation of Independent Business (NFIB) against upholding the law -- and, in another unusual turn, although the parties actually agree that the Anti-Injunction Act doesn't apply, the Court wanted to consider this issue, so it appointed Robert A. Long, Esq. to brief and argue that issue; it also appointed H. Bartow Farr III, Esq. to argue that the individual mandate is severable from the rest of the case.

Let's first get the Anti-Injunction Act out of the way since it's very technical and not likely to determine the outcome in the case. The Anti-Injunction Act prohibits a court from enjoining a federal tax unless and until it is being collected, which, in this case, would be 2015. If the Court finds that the penalty for violating the individual mandate is a "tax" under the Anti-Injunction Act -- not the same definition of "tax" as, for example, used in the tax code -- then it could find that no challenge to that provision can be brought until 2015. It would, then, dismiss all of the pending health reform cases. As best I can tell, nobody thinks that is going to happen. The case is really focused on the individual mandate, not the penalty for violating it. And by 2015, most of the law would be implemented and it would be impossible to turn back the clock. However, the Court and the government, especially, are likely to take this issue very seriously because anything they say about the Anti-Injunction Act could make a difference in future cases.

The argument on the individual mandate is the one all of us are most familiar with. This part of the law requires everybody to purchase insurance (and if they can't afford it, there will be subsidies, and if they still can't afford it, they are exempt from the penalty and may be Medicaid-eligible). The States and NFIB argue that Congress does not have the power under the Constitution to require people to buy anything, including health insurance. Congress anticipated this argument and made findings that sought to legitimize this exercise of power by finding that the entire health care system is in crisis, and fixing it certainly involves "commerce," so since the individual mandate is part of that "fix," requiring people to purchase insurance is a valid exercise of the Commerce Clause. However, under the Constitution, Congress cannot regulate purely intrastate commerce -- commerce that occurs only within state lines. The Supreme Court has interpreted the Commerce Clause to permit Congress to pass laws that have an "effect" on interstate commerce, though, so even if an activity occurs within state lines, Congress can regulate it if it has an interstate effect. The Government argues that the individual mandate is part of a comprehensive regulatory scheme involving the entire health care system, which operates in interstate commerce. The individual mandate is "necessary" to this comprehensive regulatory scheme, and it regulates conduct with a substantial effect on interstate commerce, the Government says. The argument that the individual mandate is necessary to carry out a broader regulatory scheme rests on the Necessary and Proper Clause of the Constitution, which allows Congress to do whatever is Necessary and Proper in carrying out its powers under the Constitution, including its powers under the Commerce Clause.

There's also an argument that the penalty that is assessed if you violate the individual mandate is a tax, not a penalty, and as such, it comes within Congress's taxing powers (and the meaning of "tax" here is different than its meaning in the context of the Anti-Injunction Act). The States say no, it's a penalty. The parties did not devote much of their briefs to this argument.

The States and the NFIB argue that the Commerce Clause does not allow Congress to compel people to engage in commerce; it only allows Congress to regulate commerce that already exists. The Government responds that everybody eventually uses health care and, as such, they are engaged in commerce, and the health reform law only regulates the means by which they pay for their health care. The States and the NFIB argue that the individual mandate cannot be "necessary and proper" to enforce the commerce power because, they say, there is no legitimate exercise of the commerce power. The Government responds that this is a complex regulatory scheme affecting the health care market, which is a legitimate regulation of the commerce power -- after all, Congress has passed a lot of laws that affect health care, like COBRA, HIPAA and ERISA -- and that the individual mandate is necessary because, without it, healthy people will wait until they get sick to buy insurance, uninsured people will keep going to emergency rooms for health care that they don't end up paying for (so the government pays for it), and all of that affects commerce. The States and NFIB argue that if Congress is allowed to do this, they can do pretty much anything, and that contradicts the Constitution's notion of a limited federal government. The Government responds that this is a complex regulatory scheme, and because of its complexity and the fact that many legitimate exercises of Congressional authority are part of this complex regulatory scheme, this exercise of Congressional power is permitted, in contrast with laws that have been struck down, which were stand-alone bills and not part of complex regulatory schemes.

The Medicaid expansion issue sort of surprised most of us; we really didn't expect the Court to hear that issue. Medicaid has existed for a long time (since 1965), and federal law always has imposed eligibility requirements, allowing states to EXPAND those requirements, but requiring all states that participate in Medicaid (which is all states) to meet those basic eligibility rules. For Congress to expand Medicaid eligibility to cover childless and non-disabled adults up to 133% of the federal poverty level is just a new eligibility rule. And from 2014 to 2016, the federal government would pay 100% of the cost of this expansion; that amount will gradually decrease until, in 2020 and thereafter, the federal government will pay 90% of these costs.

Nevertheless, the States challenged this expansion under the state sovereignty granted by the 10th Amendment. They claim that they really have no choice but to participate in Medicaid, and that, therefore, Congress is forcing them to pay their share of the costs of this expansion. The Government says the States are not being forced to participate in Medicaid; they choose to do so. While everybody expects every state to continue to participate in Medicaid, that's not coercion; it's still a choice. I confess, I have a hard time seeing the weight of the States' position on this issue; Congress has expanded and elaborated Medicaid so many times without challenge, and this time is no different.

Finally, there is the argument regarding severability. The question here arises only if the Court strikes down the individual mandate. There are very strong arguments that the individual mandate is very critical to the entire statutory scheme. As we argued in our amicus brief, in order to cover people with pre-existing conditions without premiums skyrocketing, there must be healthy people in the pool. (Indeed, in our brief, we argue that the individual mandate was "necessary and proper" to ensure coverage of people with pre-existing conditions.) There are states that have gone to "guaranteed issue" -- the elimination of pre-existing condition exclusions -- and in those states, premiums have increased dramatically because all of the sick people are in the pool, but many of the healthy ones are not. So there's a real question as to whether the system would work without the individual mandate. On the other hand, only one court that found that the individual mandate is unconstitutional also found that it was not severable, and that the entire law had to be struck down. It is unlikely that the Supreme Court would invalidate the entire statute, but anything's possible.

Of course, at the heart of all of this is a question about the role of the federal government in the lives of Americans. Does government have a responsibility to care for our most vulnerable, including the sick and uninsured; or should government stay out of our lives and hope that private charities care for the needy? In light of the fact that there are 50 million people in the United States who are uninsured, and the fact that private charity has not been able to meet their needs or even come close to it, I come out on the side of believing that government has a role in caring for those who need help. In my view, it's no different from Social Security, Medicare, Medicaid, and so on -- all of which were challenged when they first were initiated. But then again, there are those who think those entitlements are wrong, too.

The health reform law already has done a lot of good. over 1 million people up to age 26 were allowed to enroll in their parents' plan because of this law. Children under age 19 have gotten insurance despite pre-existing conditions. Seniors have gotten help with prescription drug costs. About 50,000 people have enrolled in the Pre-existing Condition Insurance Plan (PCIP).

And I believe that coverage of pre-existing conditions would be the most important civil rights advance for people with chronic illnesses -- ever. Sure, the Americans with Disabilities Act helps some, as does the Family and Medical Leave Act. But you can't get coverage under the FMLA until you've been working somewhere for a full year. And under the ADA, if you're unable to perform the essential functions of your job -- including not being absent from work, even if due to illness -- the law doesn't protect you. But what would protect you is to know that you can always buy insurance, change insurance, and not be penalized by your insurer due to having a pre-existing condition. More of us could stay employed and healthy. Fewer of us would end up on disability. We would be equal, really, for the first time. For me, this is the most important part of the health reform law. Every one of us could get insurance, regardless of pre-existing conditions. I can't think of anything that would be more meaningful to people with chronic illnesses than to be treated like everyone else when we are sick.

We'll find out in late June how the nine Justices of the Supreme Court feel.


No comments:

Post a Comment