Affordable Care Act Hangs in the Balance After Oral Arguments

From Monday, March 26, 2012, through Wednesday, March 28, 2012, the Supreme Court of the United States held six hours of oral arguments in three pending cases involving constitutional challenges to the federal health reform law, the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (the Act). The three cases pit the federal government against 26 state attorney generals and a powerful trade association representing business owners. This article summarizes the issues addressed in each day of the hearing. The outcome of these cases cannot be predicted, but the discussion here provides some insight into the challenges that the Court faces in deciding the issues.

The Court organized the hearings sequentially in order of the issues presented with respect to the individual mandate. On Day 1, the Court heard arguments on a procedural issue of whether the Anti-Injunction Act prevents the states from challenging the individual mandate before its requirements are imposed. On Day 2, the Court assumed for purposes of the arguments that the Anti-Injunction Act would not prevent the states from challenging the individual mandate provision before it is imposed and addressed the issue of the constitutionality of the individual mandate provision itself. On Day 3, the Court assumed for purposes of the arguments that the individual mandate could not be upheld as constitutional and addressed the question of whether the individual mandate could be severed from the law or whether the entire law must be struck down. In addition, on Day 3 the Court addressed the issue of whether the federal government can impose Medicaid expansion upon the states, which is unrelated to the individual mandate.

Day 1: Anti-Injunction Act

The Court heard 90 minutes of oral argument regarding the applicability of the Anti-Injunction Act. The Anti-Injunction Act prevents a legal challenge to a tax until the tax has actually been imposed. The payments imposed by the individual mandate on those who do not obtain insurance will not be collected until April 2015. If these payments are found to be a tax, then the Anti-Injunction Act will apply.

Interestingly, all parties involved agree that the Anti-Injunction Act does not apply. The federal government maintains that the penalty for failure to maintain minimum coverage is a "penalty" and not a "tax," and the states argue their challenge is on separate grounds that do not touch the Anti-Injunction Act (i.e., that the individual mandate and expansion of Medicaid are unconstitutional). Nevertheless, the Court appointed an independent advocate (amicus curiae) to argue that the Court should dismiss the case "for lack of jurisdiction" because the payments are a tax and not a penalty. If the Court finds that the Anti-Injunction Act applies to the individual mandate, the entire challenge of the Act would be dismissed, at least until 2015 when the payments are assessed and collected and a new suit is brought. Such a controversial finding would force the future of health reform back in the hands of the legislative process until 2015, yet this finding is questionable after Day 1. As...

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