And So It Begins…

Supreme CourtOn Monday, March 26, the United States Supreme Court will begin to hear oral arguments on the constitutionality of the Patient Protection and Affordable Care Act of 2010. This case is one of the most important to be heard in recent memory, and the Supreme Court has set aside an unprecedented amount of time over three days for arguments on three separate issues. In general, those arguments center around two questions: can the federal government require that everyone either have health insurance or pay a penalty; and is the Medicaid expansion constitutional?

Day 1 (Today): Should this case be considered later? The lawsuits challenging the ACA argue that it is unconstitutional to make people pay a penalty if they do not have health insurance. One key preliminary question is whether that penalty is a tax. A federal law called the Anti-Injunction Act requires that in order to challenge a tax, a person must first have paid it. Since the individual responsibility provision (and the penalty) will not go into effect until January 1, 2014, no one has paid a penalty yet. Therefore, if the Supreme Court determines the penalty is a tax, which no one has paid, they could decide that the Court cannot yet hear the case. Advocates and opponents of the law would prefer that the Supreme Court not delay, but the Court could refuse to rule on the constitutionality of the individual mandate on this basis.

Day 2 (Tuesday): Is the individual mandate unconstitutional? As noted above, the ACA requires that everyone purchase insurance or pay a penalty. The arguments on this issue will focus on what is called the Commerce Clause of the U.S. Constitution. Under the Commerce Clause the federal government has the ability to make laws that affect commerce across state lines. The question then is whether health care, and the purchase of health insurance, is commerce that can be regulated by Congress.

Appleseed believes health care, and the purchase of health insurance, is commerce that can be regulated by Congress. Everyone will get sick. It is not a matter of if any one person will require health care but when. In our view, requiring everyone to have insurance is an appropriate way to share responsibility. Hospitals are prohibited from turning anyone away. This means that when someone is sick, goes to a hospital, and can’t pay the bill because they are uninsured, that debt, or “uncompensated care” has to be paid by someone. Hospitals write off some of it, but hospitals try to get some of that money back in the higher rates that the hospitals charge insurers, which the insurer then passes along to us. So, when someone does not have insurance, they are essentially asking everyone else with insurance to pay for their care. Requiring everyone to have insurance will greatly reduce uncompensated costs and will broaden the risk pool, which then reduces the costs of premiums for everyone.

Day 3 (Wednesday): Is the Medicaid expansion unconstitutional? Part of the strategy to get more people covered by insurance is the expansion of Medicaid to include everyone under the age of 65 who makes less than 138% of federal poverty level (about $30,000 for a family of four). The federal government will pay 100% of the costs of these newly eligible people for the first few years and then 90% in 2020 and following years. Although the states argue that this expansion is unconstitutional, the Supreme Court has never struck down an expansion to the Medicaid program, and it’s generally understood that the federal government can place restrictions and requirements on federal money. Participation in the Medicaid program is voluntary, and states could refuse all federal Medicaid dollars if they do not want to follow the Medicaid expansion. Refusing Medicaid, however, would have devastating effects, drastically increasing the number of uninsured and increasing costs in the health care system in general.

Like many others, we will be anxiously awaiting the decision, which is expected sometime this summer. Please check back over the next few days for more news and detailed information about each day of arguments. Or, you can listen to the arguments here:

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