COSE Update - May 2012

In March, the U.S. Supreme Court heard oral arguments on the constitutionality of the Patient Protection
and Affordable Care Act of 2012. A decision is expected at the end of June.

By Cheryl Ough

President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA) into law on March 23, 2010. Since the law’s passage, many provisions of PPACA were implemented (or are in the implementation process). For example, in April 2010, individuals unable to obtain health insurance due to pre-existing conditions received health care coverage through states’ high-risk pools. Children are now able to stay on their parents’ health insurance plan until age 26 (in Ohio, it is age 28). In addition, the Department of Health and Human Services (HHS) recently released final rules related to Health Benefit Exchanges.

Shortly after the President signed PPACA into law, 26 states, the National Federation of Independent Businesses and two individuals sued the federal government on grounds that Congress overreached its

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power. The lower courts split as to whether the law was constitutional or unconstitutional and whether parts of the law were severable. In November 2011, the Supreme Court agreed to hear oral arguments.

Tensions ran high inside and outside the U.S. Supreme on March 26, 27 and 28, 2012 as the nine justices heard oral arguments concerning PPACA. The oral arguments were divided into four parts: the anti-injunction act, the individual mandate, the severability of the law and Medicaid. Solicitor General of the U.S. Donald B. Verrilli, Jr. argued how Congress had the authority under the Commerce Clause and Necessary and Proper Clause to enact the individual mandate. Former Solicitor General under the George W. Bush Administration, Paul Clement, argued that the individual mandate was unconstitutional because Congress did not have the authority to enact such mandate.

There are several possible decisions which the Supreme Court may decide on the issues. Below are possible outcomes for each issue and do not reflect any opinion from COSE on how the Supreme Court should decide. The Supreme Court’s decision is expected by the end of June.

Anti-Injunction Act

The anti-injunction act requires a tax to go
into effort before it may be challenged in
court. Prior to the Supreme Court hearing
oral arguments, the lower courts were split
on whether the statute applied and if the
courts could hear arguments until 2014,
when the law went into effect.

Minimum Coverage Provision (Individual Mandate) The Supreme Court will either decide that the minimum coverage provision is constitutional (Congress had the authority to enact such provision) or is unconstitutional (Congress did not have the authority to enact such provision).

Severability

The Supreme Court will either decide that the minimum coverage provision is severable or not severable from the entire law. Depending upon how the Supreme Court decides this issue, the entire law may be constitutional or the court may declare one part of PPACA unconstitutional and allow the rest of PPACA to be constitutional.

Medicaid

The Supreme Court will decide whether Congress had the power, with separation of powers between the federal government and States in place, to require the States to expand Medicaid or not receive federal funding.