Supreme Court upholds healthcare reform
supreme court - 317.32 Kb The Supreme Court justices today voted to keep the individual mandate as a tax in a 5 to 4 decision in the ruling of the Patient Protection and Affordable Care Act (PPACA). According to the Supreme Court blog, the entire PPACA is upheld, with the exception that the federal government has the power to terminate states' Medicaid funds.

However, the court's decision stressed that individuals can not simply refuse to pay the tax. Thus, if an individual does not comply with the mandate, they have to pay the tax. About the Medicaid provision, Supreme Court blogger, Amy Howe, reported that it is "limited but not invalidated."

The blog also reported Chief Justice Roberts' vote saved the PPACA. Roberts' read from page 55 of the decision: "Nothing in our opinion precludes Congress from offering funds under the ACA [PPACA] to expand the availability of healthcare, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize states that choose not to participate in that new program by taking away their existing Medicaid funding."

On March 23, 2010, President Barack Obama signed PPACA into law after a contentious battle in the U.S. House and Senate. Under the legislation, virtually all Americans would be required to buy health insurance by 2014 or pay a penalty.

Initially, 14 states, led by Florida’s Attorney General (AG) Bill McCollum, filed a suit in the federal court’s Northern District of Florida, alleging the law infringes upon the constitutional rights of state residents by mandating all citizens and legal residents have qualifying healthcare coverage or pay a tax penalty. The Virginia AG, Ken Cuccinelli, filed a separate lawsuit, claiming its specific state laws prohibited the requirement of all individuals to purchase health insurance.

Eventually, 26 states led what became State of Florida v. U.S. Department of Health and Human Services through a series of wins and losses in court, and it bubbled up to the federal Appeals courts in mid to late 2011. The constitutionality of the act was upheld in the Sixth Circuit Court of Appeals and the Fourth Circuit Court of Appeals, while the Eleventh Circuit Court of Appeals had ruled against the act’s individual responsibility provision.

Due to these conflicting verdicts, the Department of Justice filed a cert petition, urging the Supreme Court to review the two-to-one decision of the Court of Appeals for the Eleventh Circuit striking down the PPACA in late September 2011. In November 2011, the Supreme Court agreed to hear the case.

During the contentious three-day hearing that led to today’s verdict, which started on March 26, 2012, the Supreme Court justices sought to review four issues—three of which fall under the minimum coverage provision, more commonly known as the individual mandate:
  • Whether the Tax Anti-Injunction Act precludes review of the PPACA until 2014;
  • Whether Congress has the authority to require most Americans to purchase health insurance or pay a penalty;
  • Whether the individual mandate is severable from the PPACA if deemed unconstitutional; and
  • Whether PPACA’s Medicaid expansion is constitutional and whether states can be required to comply with it to remain eligible for federal Medicaid funds.

On the second day, the justices probed Donald B. Verrilli, Jr., Esq., about the definition and scope of the health insurance market. Verrili, U.S. solicitor general who argued on behalf of the Department of Health and Human Services (HHS), was widely criticized from both sides of the political aisle for a weak defense of the bill.

On the final day of the arguments, the justices sought to figure out the issue of severability. Paul D. Clement, Esq., who presented the arguments on behalf of the 26 states in the case, kickstarted the morning session, stating: “If the individual mandate is unconstitutional, then the rest of the Act cannot stand.”

On the severability question, the Supreme Court had several options: It could have allowed the rest of the PPACA to stay in place; it could have agreed with the Clement that the rest of the law must go too; or it could have chosen a middle ground by striking down the mandate, but leaving the other provisions to stand on their own.