When the Supreme Court hears oral arguments next year on the legality of the Patient Protection and Affordable Care Act, the justices will weigh the constitutionality of the two central vehicles for expanding insurance coverage by an estimated 32 million people.
High court to focus on four questions in ACA case
The Congressional Budget Office estimated that about 16 million more Americans would be required by the law's minimum coverage provision to purchase insurance out of their own pockets, while another 16 million would receive it through a mandated expansion of state Medicaid programs.
On Nov. 14, the Supreme Court agreed to hear arguments on the legality of both insurance-expansion methods. The arguments will likely be held in March and a decision is expected before July, during the run-up to the presidential general election next year.
The court granted a total of 5½ hours for the debates, an unprecedented allotment in modern times. Certiorari was granted on four specific questions raised in several petitions for review, all arising from one of the many lawsuits challenging the law. That lawsuit, filed by Florida and joined by 25 other states, was appealed to Atlanta's 11th U.S. Circuit Court of Appeals, the only court to strike down any part of the law.
Much of the public debate has centered on the familiar question about the individual insurance mandate and whether past Supreme Court decisions have given Congress constitutional authority to require private citizens to purchase health insurance by 2014 or face an income-tax penalty.
The Supreme Court also will hear arguments on whether the mandate could be severed from the reform law, allowing the rest of its provisions to stand in the event the mandate is found unconstitutional.
They'll also consider whether such arguments are altogether premature, since the mandate is a tax under some legal theories, which would place it outside of judicial review until 2014 by a federal law that prevents judges from interfering in matters of taxation.
Experts in constitutional law, however, agreed that the most surprising aspect of the court's ruling was its decision to grant a one-hour hearing to the question of whether the reform law unconstitutionally coerces states into expanding their Medicaid programs.
In contrast to the freedom states have today in setting eligibility criteria for their Medicaid programs, the Affordable Care Act says any state that receives federal funding to support its program after 2014 must offer coverage to any nonelderly resident with an income below 133% of the federal poverty level—$29,726 for a family of four in 2011.
The federal government will pay 100% of the new enrollees' costs in 2014, 2015 and 2016, and a declining percentage in the years after, dropping to 90% of new enrollees' costs by 2020.
The law also requires state Medicaid programs for the first time to provide a set of minimum essential services that would be covered under the programs.
Any state that doesn't agree to those terms will, under the reform law, lose all of its federal Medicaid funding—which critics say is tantamount to coercion, given Medicaid's wide use and the fact that it is the largest federal grant-in-aid in every state.
The federal government spent $251 billion supporting state Medicaid programs in 2009. Most states received more than $1 billion each, covering at least half of their total Medicaid costs.
Florida and the 25 other states sued HHS to stop the Medicaid expansion, and the Supreme Court granted the issue a hearing even though neither the district court judge in Florida nor the appeals court sided with the states so far on that argument.
“I think it's the most important issue in the case, and it's the sleeper issue. It gets no attention in the media,” said James Blumstein, a professor at Vanderbilt Law School and director of the Vanderbilt Health Policy Center in Nashville. “I think that it's the most likely to be successful for the states.”
Although the issue is often portrayed as offering states the choice of whether to continue offering Medicaid, Blumstein argues the reverse—the federal government has already voted to cancel “traditional Medicaid” starting in 2014, he said, and states now must decide whether to join the new Medicaid in which the federal government dictates terms of eligibility.
He said Medicaid should be seen as a “relational contract” by the justices, in which some changes are contemplated between the parties, but they have to be “reasonable and fair” with the terms of the existing agreement.
Blumstein dismissed the idea that the justices may tend to side with the federal government on that issue because every other court has.
“This gives the court a chance to put a stake in the ground and say there is a limit to the power of the federal government to change the terms of a program,” he said.
Attorney James Wootton—who is the chairman of the Partnership for America, a not-for-profit that calls repealing the reform law its highest priority—said the Medicaid expansion debate may resonate on the Supreme Court because many of the judges are sensitive to costly federal mandates.
“The Medicaid coverage is an unfunded mandate on the states,” Wootton said. “I think the court decision to take a look at that may reflect this unease that a lot of people have that if it's too tough politically to raise the taxes and pay for something at the national level, then it's very troubling to see the Congress sort of avoid that tough decision to pay for something and then push that decision down to the state level.”
Many supporters of the law, meanwhile, reject that line of attack.
Ron Pollack, the executive director and vice president of reform-law supporter Families USA, said he found it “flabbergasting” that the court opted to review the states' Medicaid-coercion argument.
“How do you talk about an unfunded mandate when in the first three years 100% is being paid for by the federal government?” Pollack said. “This notion of this being an unfunded mandate is absurd.”
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