U.S. Supreme Court Upholds Affordable Care Act
The U.S. Supreme Court has released its much-anticipated decision on the constitutionality of various provisions of the Patient Protection and Affordable Care Act (ACA). In the two major issues before the Court, it upheld the so-called individual mandate as a legitimate constitutional exercise of Congress' taxing authority. The Court also upheld the ACA's requirement for states to expand eligibility under their Medicaid programs, but struck down the provision that could have required non-complying states to forfeit 100 percent of the their Medicaid funding. The text of the Supreme Court's decision, released June 28, is available at: http://www.drinkerbiddle.com/Templates/media/ files/Top%20Trends/Health%20Care%20Reform/SCOTUS%20ACA.pdf .
Individual Mandate Upheld
The ACA provides that beginning in 2014 virtually all Americans must maintain health insurance coverage (e.g., "individual mandate"). The government argued the Commerce Clause of the Constitution - which addresses the power to regulate interstate economic activity - gives it the authority to regulate the purchase of health insurance. Under this theory because everyone will use health care at some point in their lives, Congress can require people to buy insurance to limit the costs imposed by the uninsured on other people in the market. Those bringing the suit argued that the individual mandate exceeds Congress' authority, which does not extend to the regulation of inactivitiy (e.g., the failure to purchase health insurance).
The Court ruled that the Commerce Clause does not grant the Federal Government the authority to require citizens to purchase health insurance. However, the Court also found that the individual mandate is a constitutional exercise of Congress' taxing authority, because the penalty for those not purchasing insurance is essentially a tax.
Although the mandate remains in force, many remain sceptical of its ability to encourage people to purchase insurance, given the relatively small payment required should individuals fail to purchase insurance, and that failure to pay the tax has no criminal or civil implications. Thus, for many people, it may still be cheaper to pay the tax than to go out and purchase insurance. Moreover, given that the other coverage expansion provisions, such as restrictions on annual policy limits and prohibition of pre-existing conditions were also upheld by the Court, many people may be incentivized to pay the tax and delay purchasing...
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