Next summer the U.S. Supreme Court will decide the fate of the nation’s health care system—and perhaps a significant portion of the nation’s economy—while defining a major portion of the public policy agenda for 2012 and beyond.
At issue before the high court is the fate of the Patient Protection and Affordable Care Act and its insurance procurement mandate, the centerpiece of President Barack Obama’s legislative efforts, or, as his critics may view it, “Obamacare.” Regardless of one’s views, the high court review represents a collision of the tectonic plates underlying Congress’ powers under the Constitution and its once seemingly limitless Commerce Clause.
The constitutional challenge comes to the court after a split among the lower courts. Two lower courts upheld the health care law, affirming a mandate that requires individuals and employers to purchase health insurance or pay a tax-related penalty by 2014. Two other courts held otherwise, striking down the procurement mandate. In one of those two cases, the court, while striking the mandate, upheld the remainder of the broad statute, which includes waivers of any pre-existing conditions and a requirement to allow families to insure their children until age 26. Another court, unable to unwind the mandate from the broader statute, struck down the entire law.
In another twist, one court seriously considered whether the entire case was moot under the Anti-Tax Injunction Act, which prohibits pre-payment challenges to tax statutes—although from our perspective it is unlikely that the Supreme Court would let that statute stand in the way of the merits.
When the high court discusses congressional power to mandate the purchase of health insurance, the legal waters are contentious and muddled, at best.
Prior to the 1990s, the power of Congress to address national issues—racial discrimination, economic recovery and even the amount of wheat a farmer could grow in his backyard—seemed broadly accepted by the court. The Commerce Clause in the Constitution was stretched by the court so that if an activity was in “the stream of commerce” and had any kind of impact on the nation’s economic health, Congress had the power—and a free hand in devising remedies—to regulate the activity.
But in the 1990s a different court dialed back the reach of the Commerce Clause, holding in a pair of cases—United States v. Lopez and United States v. Morrison—that restricting where people carry handguns and regulating violence against women are local, criminal and non-economic activities that lie outside the authority of Congress.
Since 2000, the high court’s composition has changed: gone are Chief Justice William Rehnquist and Justices Sandra Day O’Connor, John Paul Stevens and David Souter. The newcomers—Chief Justice John Roberts and Justices Samuel Alito, Sonia Sotomayor and Elena Kagan—are ideologically divided, but their votes may follow the two-two split of their predecessors on Congress’ power under the Commerce Clause.
Because Lopez and Morrison were 5-4 decisions, the likelihood of a similar single-vote majority ruling is significant.
The regulation of criminal conduct struck down in Lopez and Morrison is dramatically different from the procurement mandates in the PPACA. To strike down the mandate as outside Congress’ power, the court would have to conclude that the mandate is not part of the “channels, instrumentalities of interstate commerce,” when health care and health insurance are at the heart of the nation’s multitrillion-dollar health care system.
However, a dissenting opinion in one of the cases before the court may provide that justification for striking down the mandate. In that case, a dissenting judge opined that Congress could not regulate “inaction,” described as “the right of citizens to be left alone.” While this view did not carry the day in the lower court, it does provide a bridge for the Supreme Court to invalidate the mandate.
Because the court recently has suggested that the Commerce Clause no longer is the long and strong arm of Congress, we believe there is a substantial prospect that the high court will find the individual mandate unconstitutional as a punitive congressional intrusion into private matters or insurance matters that are generally left to the states.
However, in our view, the court will be leery of striking the entire statute. Some of the law’s other provisions already have taken effect to measurable benefit, and it seems consistent with the court’s desire to limit the reach of its ruling and other practicalities that the law will not be stricken in its entirety. The court’s refusal to strike the entire statute would practically avoid a public outcry and the tedious process of untangling active and publicly welcomed health reform measures.
The better logic suggests that the court will sever the mandate provision from the statute and return the issue of financing national health care to current or future Congresses.
Eric LaVallee is an MBA graduate of the Bittner School of Business at St. John Fisher College. Richard Dollinger is an adjunct professor of health law at the college.
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