Monday/The Anti-Injunction Act – Pay taxes now, sue later, delays the decision. Decide about penalties now.
Tuesday/Individual Mandate for Minimum Coverage – The mandate is too much or too little for the Commerce Clause.
Wednesday – Severability and Medicaid Expansion – Strike down the ACA if the mandate is unconstitutional because it’s all part of one plan or save as much as possible. Strike down the Medicaid expansion because the states foresee it will cost and confuse them as have past expansions.
Or you read a bit more here:
Policy wonks and news junkies are no doubt having great fun listening on the Internet to audio released by the Supreme Court of arguments that began Monday about the constitutionality of the federal health care reform law, the ACA. Arguments continue Tuesday and Wednesday. On the theory that many more could have this fun but find the full explanations too heavy to hoist, this short note summarizing the issues before the Court offers something to get enthused about.
Monday: Pay taxes now, sue later, delays the decision. Decide about penalties now.
The right time for dispute about the penalty on individuals for failing to have health insurance can be heard now if it’s a penalty, but not if it’s a tax. The Anti-Injunction Act of 1867 prohibits seeking court orders in anticipation of a tax … collection. The taxpayer must pay first and seek to recover if the tax is found to be unlawful. Therefore, the payment due from an individual for going without mandatory minimum coverage cannot be heard until 2015 when the first payment is collected by the IRS. (Lower courts have been troubled about garden-variety standing as well.)
The Circuits have split on the correct characterization of the payment. The 2015 payments could be a tax or a civil monetary penalty, a fine. The law and the states say it’s a penalty. The federal government first argued for “tax” since it has a constitutional power “to lay and collect taxes to provide for the general welfare.” When the Anti-Injunction Act surfaced, however, government switched to CMP to avoid delay. Although the parties now agree, plausible arguments were raised for each view, so the Court will consider whether the Anti-Injunction Act applies and the correct interpretation. It has been suggested that the otherwise unimportant choice of “tax” or “penalty” might be a means for an undecided Court to kick further consideration down the road.
Tuesday: The mandate is too much or too little for the Commerce Clause.
For the states and the business plaintiffs, the minimum coverage mandate either exceeds the scope of the Commerce Clause which provides the federal government “power to regulate Commerce …among the several states,” or isn’t subject to federal authority because declining to buy is not commerce. The first argument seems easily dealt with by the government: Almost no transaction is beyond the Commerce Clause after the New Deal case Wickard v. Fillburn in which a farmer’s decision to grow wheat to feed his chickens affected interstate commerce by displacing other trade in wheat which, replicated many times, would have a significant impact on the market between states. However, the case and view are old and state’s rights advocates among the Justices might find reason to reinterpret.
The second argument asserts that non-commerce can’t be federally regulated, and that government has never required individuals to buy anything. If health insurance is a mandatory purchase, where are the limits of what a citizen can be required to buy? Perhaps, wrote Judge Vinson in the 11th circuit in the course of finding the mandate unconstitutional, people could be required to buy broccoli. In fact, federal law requires the purchase of a number of goods, including air bags in cars, and education funded by federal tax revenues. Regarding the broccoli, the answer is probably yes if it were necessary for good health and therefore must be available throughout the states. However, government probably cannot make a person eat the broccoli, or use health insurance.
Wednesday: Strike down the ACA if the mandate is unconstitutional because it’s all part of a plan or save as much as possible. Strike down the Medicaid expansion because the states foresee it will cost and confuse them as have past expansions.
Regarding severability, if the penalty compelling minimum coverage is invalid, many important insurance reforms are nearly useless including guaranteed issue (all applicants must be insured, regardless of health history) and community rating (the same premium for every person in a geographic area). Insurers would offer policies with less than minimum coverage for lower premiums to healthier people. State Health Insurance Exchanges to certify acceptable policies and their premiums, and advise consumers, might be unable to compare the prices of apples and oranges. The states argued in a brief filed March 13 that all must go if the individual mandate is severed. It’s not perfectly clear what the government would gain by saving some of the provisions, but they might be revived by new legislation.
Regarding Medicaid expansion to provide benefits or premium assistance to people up to 400% of poverty level, the states argue they are being coerced into participation in a federal program. They are shocked! Shocked! The government could argue that the states are always free not to participate in Medicaid, that the states provide a plan for services they wish to provide and only services basic to the health of the poor are required, and that the expansion is funded 100% by federal funds in 2014 – 2016, dropping gradually to 90% by 2020, and holding steady thereafter.
The states are not wrong, though. If they withdraw from Medicaid participation rather than carry out the expansion, they would have to replace the 50% to 80% federal matching funds already in use to pay for their existing programs, an impossible task. Also, past mandates adding new services and recipients have increased costs incrementally, while the match rate sinks. Though they know the future, it’s an offer the states can’t refuse.