Tuesday, March 27, 2012

Oral arguments begin in landmark health reform case

If the 90-minute oral arguments at the Supreme Court on March 26 are any indication, it appears that the Court will not take the easy way out on health reform. By relying on the Anti-Injunction Act (AIA), the Court could avoid having to immediately decide on the constitutionality of the 2010 health reform law and wait until after 2014, after the first penalties for failing to obtain health insurance have been collected and paid, to decide the case on its merits.

Instead, many Court watchers believe that the justices seem eager to get beyond the narrow jurisdictional issues raised during the March 26th oral arguments and address the larger constitutional matters relating to the health reform case’s merits. These larger issues would include, for instance, the controversial individual mandate, which would require most Americans to buy some type of health insurance or face a tax penalty, a topic to be addressed at the Court on March 27.

What happened on Day 1 of oral arguments? At issue during the first of three days of scheduled oral arguments about the Patient Protection and Affordable Care Act (PPACA) is the AIA, an 1867 law that bars claims seeking a refund for a tax until after the tax has been collected and paid.  Why would an 1867 law apply to the PPACA? The health reform law’s individual mandate is found in Internal Revenue Code Sec. 5000A, which requires individuals who fail to maintain minimum essential health insurance coverage to pay a penalty.

On March 26, attorney Robert Long, who was appointed by the Supreme Court to defend the AIA, argued that the AIA is a “pay first, litigate later” rule that could be waived only by Congress, which did not do so in the 2010 PPACA law. The penalties called for in the law, for failing to obtain health insurance, should be considered the same as taxes, according to Long, because of the way they are collected. If the Court relied on the AIA, the PPACA could not be challenged until someone paid the tax, early in 2015, and then challenged the law.

During oral arguments, however, the justices appeared to dispute this notion. According to Justice Stephen Breyer, for instance, the penalty “is not attached to a tax. It is attached to a health care requirement.” According to Justice Ruth Bader Ginsburg, the purpose of the fine for non-compliance is to get people to leave the ranks of the uninsured. “This is not a revenue raising measure because, if it’s successful, nobody will pay the penalty and there will be no revenue to raise,” she said.

At one point, Justice Sonia Sotomayor asked Long a question about what "parade of horribles" would follow if the Court allowed the health reform lawsuits to proceed. Justice Antonin Scalia commented that there would be no such “parade of horribles” and that this is a question that could not be answered.

What’s ahead? The March 26 skirmish at the Supreme Court is only the preliminary oral argument on health reform. On Tuesday, March 27, the justices will hear two hours’ worth of oral arguments as to whether Congress had the authority to enact the individual mandate. Then, on Wednesday, March 28, the Court will hear oral arguments on two different issues. First, it will hear arguments as to what would happen to the PPACA if the Court strikes down the insurance mandate. Is the mandate severable from the rest of the law or, by striking down the mandate, would the Court have to strike down the entire law? Finally, the Court will hear arguments on whether the PPACA’s expansion of Medicaid is an unconstitutional “coercion” of the states.

Then, by late June, the end of the Supreme Court’s current term, the Court likely will announce its ruling on the merits of the case. That is, of course, unless the court watchers are wrong and the Court uses the AIA to put off its decision to a later time. After all, the Court has been known to confound Court watchers, from time to time.


Post a Comment