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Supreme Court Hears Health Care Reform Challenges

Update (6/11/12): The Court’s opinion will be released by the end of June 2012 and will be posted at www.supremecourt.gov. AOTA will review the decision upon its release and analyze the implications for occupational therapy.

Update (3/16/12): The U.S. Supreme Court has announced that it will not allow cameras in the courtroom during oral arguments on the constitutionality of the health care reform law, but it will make available same-day audio. The Court said in a statement that the decision is due to "extraordinary public interest" in the matter. C-SPAN has announced that it will play the audio in full on C-SPAN 3, C-SPAN radio, and C-SPAN.org. Arguments are scheduled for March 26, 27, and 28, 2012, and a decision from the justices is expected this summer.

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The Supreme Court has agreed to hear legal challenges to the Affordable Care Act (ACA), the health care reform law signed by President Obama in 2010, that have been brought in several lower courts. The case will be argued over 6 hours and 3 days in March. This amount of time for argument is significant and reflects the Court’s view that this is an important case. The Supreme Court is expected to determine the fate of the law: it could be upheld, struck down in whole or in part, or a decision could be deemed premature at this time and deferred until 2015. 

The Individual Mandate

The central legal issue is also the key to the ACA’s objective to broaden insurance coverage—the requirement that individuals purchase a commercial health insurance policy or face financial penalties for failing to do so, beginning in 2014. The purpose of this so-called individual mandate, in brief, is for millions of relatively healthy Americans to obtain health insurance in order to offset the costs of making insurance available to everyone without denying coverage for pre-existing conditions and without charging especially high fees to those with costly health care needs.

Courts are barred by the Anti-Injunction Act from striking down certain laws before they take effect, and so the Supreme Court will first determine if the time is right for a decision at all or if litigation must be deferred until 2015, when the first penalties would be levied for failing to secure insurance. Lower courts are split on this issue: the D.C. Circuit Court and the 6th Circuit Court have upheld the individual mandate, but the 4th Circuit Court has ruled that courts have no power to decide the issue until 2015. Of the 5 1/2 hours scheduled for oral arguments on the health care reform law, 1 full hour is allotted for discussion of the Anti-Injunction Act, suggesting the justices take this particular issue quite seriously.

If the case passes this threshold issue of timing, the Supreme Court will weigh whether Congress exceeded its constitutional powers to regulate interstate commerce and levy taxes when it adopted the individual mandate. If the mandate is found to be unconstitutional, the justices must determine how much of the balance of the ACA must fall along with it. The Obama administration has acknowledged that the mandate is intertwined with two other provisions, one forbidding insurance companies from denying coverage to applicants and the other barring them from denying specific coverage for  pre-existing conditions.

State Medicaid Expansion

The Court will also decide a challenge to provisions in the ACA requiring states to expand Medicaid coverage and increase program spending or lose federal Medicaid funding. The legal debate centers on whether Congress exceeded its constitutional authority by expanding the eligibility and coverage thresholds that states must meet to remain eligible to participate in Medicaid. While the ACA does provide for federal funding of state program expansions initially, the law also provides for a gradual reduction of the federal contribution over time. Supporters of the law note that any state is free to withdraw from the Medicaid program and simply do without accompanying federal dollars and mandates, and detractors argue that this creates an unfair burden and gives no real choice to the states, which currently depend on federal Medicaid dollars significantly. 

The Bench

Finally, observers have noted that it may be appropriate for two justices to voluntarily recuse themselves from hearing the case: Justice Elena Kagan, for previously working as President Obama’s Solicitor General, and Justice Clarence Thomas, because his spouse is deeply involved with political activities opposing the health care law. Neither justice has recused themselves and both will be on the panel when the case is heard.

Implications

The Supreme Court’s decision, coming just before the elections next November, will be highly anticipated and may have a significant impact not only on health care but on the outcome of those elections.

—Jennifer Hitchon, JD, MHA