Tag: The Supreme Court Challenge

What if the Supreme Court Strikes Down the Individual Mandate?

Nov 4, 2011• 20

By D. Brad Wright

Any ruling by the Supreme Court on the constitutionality of the Affordable Care Act’s controversial individual mandate isn’t likely for at least another several months, but it’s worth thinking about what might happen after the case is decided. The first scenario is easy: If the Court upholds the mandate, the ACA goes forward as planned to the continued objections of many conservative Americans and politicians. The second scenario is less clear: If the Court finds the mandate unconstitutional, do they find it severable from the rest of the law? If not, they’ll strike the whole ACA down. This seems like the least likely outcome. If, on the other hand, they do invoke severability, the ball is back in the White House’s court. The decision at that point would be whether or not health reform can be successful without the individual mandate.

The concern here is the death spiral first described by Nobel Prize-winning economist Joseph Stiglitz. In essence, if we don’t require everyone to buy insurance, then insurance will be disproportionately purchased by the sick, making it more expensive and leading many to discontinue coverage in a continuous cycle that drives the price higher and higher until no one can afford insurance any more and the system collapses. By contrast, getting everyone into the pool is seen as the only way to keep costs down and maintain the insurance system. So the question is: What happens if the Supreme Court strikes down the individual mandate? Does the Obama adminsitration wash its hands of health reform, proclaiming that it can’t be done without the individual mandate because costs will rise too rapidly and the insurance system will collapse, or does it forge onward and see what happens?

Constitutional Serendipity

Oct 27, 2011

By David Boyle

Serendipity is not a word one usually associates with the present raucous debate over the “individual mandate” of the Patient Protection and Affordable Care Act. Democrats tend to support both the mandate and the PPACA, while Republicans tend to oppose both. However, this “between the devil and the deep blue sea” approach, whereby one makes a Hobson’s choice between being tyrannized by a government command to buy health insurance, or seeing no comprehensive health reform enacted in a country that needs it, is a false dichotomy, serendipitously enough.

The PPACA offers comprehensive reform, including welcoming features such as guaranteed issue of insurance regardless of preexisting medical conditions. However, the fact that the PPACA has valuable features doesn’t automatically legalize any possible measure designed to fund the Act, including coerced health insurance purchase. As former Vermont governor Howard Dean noted in August 2010 on MSNBC’s The Daily Rundown, Vermont enacted a successful state health care program without an individual mandate; Dean emphasized, “And people don’t like to be told what to do.” This latter factor is not negligible in a country with a statue in New York Harbor dedicated to liberty. (Perhaps this is why a June 9, 2011 CNN poll shows 54% of Americans opposed to the mandate, and other polls report similarly.)

Our American liberty has various constitutional and legal underpinnings which can defend people from the federal individual mandate, and maybe even from state individual mandates. As for Congress’ power to tax for the general welfare: taxes and penalties, such as the “Shared Responsibility Payment”, the PPACA financial penalty for refusal to buy health insurance, are not just interchangeable “economic incentives”.

The Health Care Reform Law: What’s the Big Deal?

Oct 17, 2011• 62

By William D. Leach

I’m not an attorney, so I cannot help the federal judges struggling to figure out whether the individual insurance mandate in President Obama’s healthcare law violates the interstate commerce clause of the U.S. Constitution. But as a taxpayer (and formerly a professor of public policy), it’s hard for me to understand what all the fuss is about.

The Patient Protection and Affordable Care Act created a monetary incentive for all taxpayers to obtain health insurance. Beginning in 2014, people without insurance will pay more to the IRS than people with insurance. Like the tax code as a whole, the rules for calculating the size of the penalty are incredibly complex. But once the penalty is fully activated in 2016, a single individual with no dependents will pay an extra $695, or 2.5% of his or her applicable income, whichever is higher. An uninsured family of four with annual income of less than $110,000 will typically pay $2,085 more than it would if insured.

This tax penalty is known as “the individual mandate.” It’s an important part of the new law because starting in 2014, insurers are prohibited from denying coverage or charging higher rates based on preexisting conditions. Without the mandate, people might wait to buy insurance until they needed medical care. To keep insurance affordable for patients and profitable for insurers, healthy people need to pay for coverage before they get sick.

Various courts have viewed the tax penalty in different ways. But some have concluded that it is a huge encroachment on individual rights. As a ruling from the U.S. 11th Circuit Court of Appeals put it, “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy.”

The Affordable Care Act Supreme Court Petitions: Issues And Implications

Sep 29, 2011• 2

By TIMOTHY JOST

Wednesday, September 28 was a busy day at the Supreme Court clerk’s office.

It had been widely expected that there would be a major pleading filed with the clerk in an Affordable Care Act challenge, as the response of the United States to a certiorari petition in the Sixth Circuit’s Thomas More case, which had upheld the ACA as constitutional, was due. A cert. petition asks the Supreme Court to exercise its discretion to review the decision of a lower court, and the losing plaintiffs in Thomas More had requested the Supreme Court to reverse that decision and find that Congress had no authority under the Commerce Clause of the Constitution to adopt the ACA’s minimum coverage requirement.

The Justice Department did file a response in that case, but very late in the day. Earlier in the day, to the surprise of most observers, three certiorari petitions were filed, asking the Court to review thedecision of the Eleventh Circuit Court of Appeals in the Florida case, which had held the minimum coverage requirement to be unconstitutional. The Eleventh Circuit upheld several other rulings of the lower court finding other parts of the ACA to be constitutional, and had reversed the decision of the lower court striking down the entire ACA as being not “severable” from the minimum coverage requirement.

Late in the morning on the 28^th, the National Federation of Independent Business and two individuals, plaintiffs in the Eleventh Circuit case filed a cert. petition, asking the Supreme Court to reverse the decision of the Eleventh Circuit refusing to hold the entire ACA to be unconstitutional. An hour or so later, the twenty-six states that are plaintiffs in the Eleventh Circuit case filed their own cert. petition asking the Court to strike down the entire ACA, but also asking the court to reverse the appellate court’s decision upholding the constitutionality of the ACA’s Medicaid expansions and of the employer mandate as applied to the states.

Mandate On Its Way To the Supreme Court?

Sep 29, 2011• 4

By ROGER COLLIER

It may have looked like a non-event, but it was a significant one.

Monday September 26 was the last day on which the Obama administration could ask the Eleventh Circuit Court of Appeals to reconsider its three-judge panel’s ruling that the Affordable Care Act’s individual mandate was unconstitutional. The fact that the Justice Department took no action almost certainly means that its intent is to ask the Supreme Court to decide the issue.

The administration’s thinking was most likely dependent on three factors. First, given that the full Eleventh Circuit is considered even more conservative than the three-judge panel that struck down the mandate, the only advantage of a second hearing would have been to delay consideration by the Supreme Court. Against this was presumably factored the political risk of a further well-publicized rejection of the mandate providing additional ammunition for opponents of reform.

Second, the administration may still be able to delay a Supreme Court decision either by filing its request for a hearing at the last possible moment in November, or even by asking for a filing extension—something that the Court might be willing to consider, given the potential impact of a decision in the middle of a presidential election.

In Obamacare Case, Constitution Is Victor

Aug 14, 2011• 12

By ILYA SHAPIRO

Today is a great day for liberty. By striking down the individual mandate, the Eleventh Circuit has reaffirmed that the Constitution places limits on the federal government’s power. Congress can do a great many things under modern constitutional jurisprudence, but, as the court concludes, “what Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.” Indeed, just because Congress can regulate the health insurance industry does not mean it can also require people to buy that industry’s products.

One of the striking things about today’s ruling is that, for the first time in one of these cases, a Democrat-appointed judge, Frank Hull, has ruled against the government. Just as the Sixth Circuit Judge Jeffrey Sutton made waves by being the first Republican appointee to rule in the government’s favor, today’s 300-page ruling shows that the constitutional issues raised by the healthcare reform—and especially the individual mandate—are complex, serious, and non-ideological.

Supporters of limited constitutional government need to temper their celebrations—just as they wisely tempered their sorrows after the last ruling—because we must all now realize that this will not end until the Supreme Court rules. Nevertheless, today’s decision gives hope to those who believe that there are some things beyond the government’s reach and that the judiciary cannot abdicate its duty to hold Congress’s feet to the constitutional fire.

Ilya Shapiro is a senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review.

This post first appeared at Cato@Liberty – Cato Institute Blog.

Analyzing A Crucial Battle In The Legal War Over Health Reform

Jun 10, 2011• 10

By TIMOTHY JOST

For a lawyer, the argument of Florida v. the Department of Health and Human Services before a three judge panel of the Eleventh Circuit Federal Court of Appeals on Wednesday, June 8, was a beauty to behold. (For a non-lawyer it was probably tedious, repetitive, and much too long). Three active and very well-prepared judges spent two and a half hours grilling three very talented lawyers about intricacies of health policy and constitutional law, rarely allowing the lawyers time to finish a thought before interrupting with yet another question.

This is arguably the most important of the many Affordable Care Act (ACA) challenges currently pending in the courts. The plaintiffs include over half of the states, as well as the National Federation of Independent Businesses (NFIB) and two individual plaintiffs. It is one of only two cases in which a part of the ACA has been held unconstitutional (out of over thirty cases that have been filed), and it is the only case in which the lower court struck down the entire statute as unconstitutional. Thirty-six amicus briefs were submitted to the appellate court, including briefs filed by professional and provider organizations, members of Congress, states and state legislators (on both sides), Nobel Prize winning economists, law professors, disease and consumer organizations, and just about every conservative advocacy group in the country.

The attorneys. The importance of the case is underlined by the fact that the federal government was represented by Acting Solicitor General Neal Katyal, while the states were represented by Paul Clement, Solicitor General under the Bush administration, perhaps the first time two solicitor generals have squared off against each other in a court of appeals argument. (The NFIB was represented by a third well-known lawyer, Michael Carvin).