Any other week, the Supreme Court of the United States’ decision in Arizona v. United States would have been the trending story on the LexBlog Network. As it was, the final word in the government’s challenge of Arizona’s Support Our Law Enforcment and Safe Neighborhoods Act was noteworthy enough to generate a slew of coverage from LXBN’s immigration, employment, and criminal law attorneys. But while Tuesday’s ruling was significant in its own right, it was the decision on Thursday in the trio of cases challenging the Affordable Care Act that made headlines this week.
In a 5-4 vote, with Chief Justice John Roberts writing for the majority, the Supreme Court upheld the constitutionality of the Affordable Care Act (ACA or “the Act”), though not in the way many pundits had predicted. The tone and tenor of the oral arguments held in March suggested that the individual mandate was on life support, meaning the other questions the court was tackling could be rendered moot.
While the question upon which the Act’s viability hinged was whether or not Congress could impose an individual mandate for purchasing health care insurance, there were other questions to be answered. The second question (more of a 1(b) than a completely seperate inquiry) sought to answer if the other parts of the ACA were valid without the individual mandate.
The expansion of Medicaid was next on the docket, as the Court was to decide if the mechanisms used for expanding this entitlement program was tantamount to coercion. And lastly, the Supreme Court Justices were to rule on the “ripeness” of the challenges, given that the mandate was yet to be implemented.
The decision has been likened to other seminal cases with regards to the potential impact on American citizens, and several scholars of the Supreme Court have said it was the most important decision since Bush v. Gore. The attorneys on LXBN certainly didn’t mistake its importance, as posts discussing the majority and dissenting opinions started pouring in less than 30 minutes after the Court’s ruling.
Kicking off the discussion is Rich McHugh, a lawyer with Porter Wright who focuses his practice in employee benefits law (including health and welfare benefits plans). Rich had this to say about the Court’s ruling on the individual mandate (and the constitutionality of the ACA overall) on the firm’s blog Employee Benefits Law Report:
“The Court upheld the individual mandate to purchase health coverage, concluding that the mandate is permissible under Congress’s taxing authority. However, the Court rejected the argument that the individual mandate was a valid exercise of the power of Congress under the Commerce Clause of the Constitution. It will be interesting to see whether this restrictive ruling on the Commerce Clause might come back to haunt the Congress and future presidents in areas unrelated to health care reform without regard to which political party is in power.
Because the mandate is constitutional, the Court was not required to decide whether other parts of PPACA have to be struck. Subject to the possibility of congressional repeal (or amendment), the entire statute survives this courtroom brawl essentially as is.”
That Chief Justice Roberts was the swing vote, a role usually reserved for Justice Anthony Kennedy, became the subject of much discussion as journalists and lawyers poured over the Court’s opinions. The Justices, split into liberal and conservative camps, rarely vote outside the lines created by their ideologies, with this case apparently being the exception to that rule. As Roberts was the author of the majority opinion, each line was discected from multiple angles. Wallis Stromberg of Davis Graham & Stubbs took an extensive look at the ruling, and found a few interesting takeaways that he posted on the firm’s Health Law Blog:
“Though it was not necessary for C.J. Roberts to go any further, having decided the ACA was a Constitutuional exercise of taxing power, he wrote at length on the main arguments that had been made in the case: whether the commerce clause or the “necessary and proper” clause permitted the “mandate.” His opinion stated that neither of these would be a Constitutional justification for the mandate provisiuon and that but for the taxing power of Congress, the mandate would have been unconstitutional and not permitted under those enumerated poweers. Four Justuices agreed with that position (the four who did not agree with the taxing power ruling and who would have invalidated the entire ACA) and the other four did not. Unfortunately, since this discussion was not a necessary part of the final opinion, the 5-4 agreement that the mandate was not a valid exercise of these two powers is not an actual decision on the merits of the scope of those Congressional powers, and it is likely to be an issue in the future in some other case. Congress is not known for restricting its actions based on a non-precedential statement by the Court.”
The question of how Congress would react to the decision was an oft repeated theme in posts from LXBN authors. Obviously, Democratic members of Congress are championing this as a victory for their party and the American people, while the GOP is hoping the next election cycle will bear enough fruit to repeal the Act entirely. But what does the ruling say about Congressional power in general? Lauren Connell on The Corporate Observer thinks that this law could have far-reaching implications:
“If people really did take the time to understand the decision, those who were initially happy with the decision might not be as enthusiastic. And more importantly, those who were initially disappointed might actually be very, very happy with the decision. It reveals the shadowy outlines of an outer limit to Congress’ power under the Commerce and Necessary and Proper clauses – formerly thought to be a relatively limitless source of federal regulatory power. While the Affordable Care Act legislation itself is important, the truly groundbreaking outcome of the Court’s decision is that it rejected those two sources of Congressional power as justifications for upholding the law.”
“Although the decision’s impact for this case is obviously a “win” for Congress, it may well be that the impact on future cases is the opposite. The Court’s commerce clause analysis is likely to provide plenty of fodder for challenges to future laws passed under Congress’ commerce clause power. So while this is obviously not an immediate win for the small government camp, it may turn out to be one in the long run.”
With the first two questions in the rearview mirror, the Court turned to Medicaid expansion. Several LXBN authors covered this aspect of the decision particularly well, including Emily Root, who writes on Squire Sanders‘ Triage Health Law Blog. Emily wrote:
“The bottom line for the Medicaid expansion is that the government may withhold federal funding for the expansion from states that don’t participate in the expansion, but existing Medicaid funding will not be affected if a state does not participate in the expansion.
Getting there, though, was complicated. Three separate groups of Justices came to three separate concludsions on whether the Medicaid expansion was unconstitutional in whole or in part. The ultimate outcome was the result of a majority (Chief Justice Roberts and Justices Breyer, Ginsburg, Sotomayor, and Kagan) that concluded that the remedy, if the law was unconstitutional, was to strike only the provision that allowed the federal government to withhold existing Medicaid funding if a state did not participate in the expansion.”
The final question of ripeness was seemingly a forgone conclusion given the rest of the opinion, but even here, turns and twists were found. Steve Delchin, another attorney with Squire Sanders, provides the analysis on this portion of the ruling over on The Sixth Circuit Appellate Blog:
“Interesting, while the Supreme Court held that the individual mandate was a tax for constitutional purposes, it also held that it was not a tax for purposes of the Anti-Injunction Act, which would have barred plaintiffs’ challenge. The Court’s conclusion relating to the Anti-Injunction Act is the same conclusion reached by the Sixth Circuit a year ago (on June 29, 2011) when it became the first Circuit Court in the country to uphold the health care statute’s constitutionality.”
While talk of “winning” and “losing” reigned supreme on talk-shows and in articles, LXBN members were more interested in the substantive impact of the decision on prospective and current clients.
Even on LXBN, however, the view of the ACA was split. Firms representing employers and businesses were generally unimpressed with the outcome of the Court’s ruling, and painted a picture of confusing regulations and high fees facing entrepreneurs and their employees. Cleve Clinton wrote a wonderful article on Tilting the Scales, a Looper Reed publication, discussing just that. Here was Mr. Clinton’s takeaway point on the implications for businesses:
“Obamacare will have one of three ultimate effects on employers: 1) employers will provide coverage for all of their employees; or 2) employers will raise their lowest-paid worker’s salary to $88,200; or 3) employers will pay the federal government $2,000 per employee for all employees except the first thirty. For a large company with 100,000 employees, that fine would be approximately $200 million per year. Companies that cannot afford to provide health coverage for every employee will likely eliminate health benefits for all of their employees and pay the fine instead. However, there are no assurances that those employees losing coverage would receive an additional wage increase in lieu of employer provided coverage, which they could instead use to purchase insurance on the exchange.”
“Looking down the road a bit, the Court’s decision means that the full benefits of the law will be implemented on schedule:
- In 2014, 30 million Americans will gain coverage and no longer be uninsured.
- In consumer-friendly marketplaces, insurers will have to disclose all of their information in uniform and comprehensible language, so consumers can compare and make choices.
- No one will be denied coverage or charged a discriminatory rate due to a preexisting condition.
- Starting in 2014, all health plans will have to include maternity care.
- Seniors will have even more help paying for their prescriptions, eventually closing the Medicare doughnut hole.”
Finally, the attorneys at Reed Smith, who have been following the trials and tribulations of the ACA for quite some time, looked at how this ruling will effect the health industry over on the firm’s Health Industry Washington Watch:
“The Supreme Court’s decision brings some legal certainty to the health care industry. The ACA contains a laundry-list of provisions unrelated to insurance reform, and repeal would have wrought havoc on several years of rulemaking and other activities – along with private-sector efforts to gear up for these policies. Examples include accountable care organizations (ACOs), new reimbursement policies on readmissions, provider/supplier screening, the Elder Justice Act, the Physician Payment Sunshine Act, and onerous fraud and abuse provisions. Now that the primary ACA legal challenge is resolved, one likely outcome is that the number of transactions in the provider space will accelerate as hospitals, health systems, and other participants look to consolidate market power and create economies of scale in the face of anticipated rate pressure from payors.”
Given the impact of the Court’s ruling, escaping the analysis and partisan bickering has been nearly impossible for anyone “plugged in” to the news cycle. However, as many LXBN authors noted, this decision hardly ends the fight. Many sections of the ACA are not yet in place, and without any knowledge of how they will impact individuals and businesses, it’s possible new challenges will arise.
There is also an upcoming election to consider, and many politicians (both liberal and conservative) will undoubtedly use this decision as a rallying point for their constituency and potential supporters. While it would be nice to act as though the Supreme Court’s ruling was the final chapter in the ACA’s ascension from a campaign promise to a fully-realized statute, the messy reality of health care reform and politics prevents most storybook endings.
To read all of LXBN’s coverage on the Supreme Court’s ruling and the Affordable Care Act, check out our tagged page with commentary from lawyers in all practice areas.