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The Supreme Court’s Health Care Reform Decision

Wednesday, April 18, 2012
Written By
Erica Storm

Well, the Supreme Court has decided the fate of the health care reform law. At least, it should have, according to its standard operating procedure. The Court usually takes a vote on its cases within days of the conclusion of oral arguments, which were held March 26-28. Although votes can be changed after that initial conference, it appears rare that a change affects the outcome of a case.

If that general rule holds true for this case, then the Justices already know whether the health care reform law will stand or fall. They’re just not telling us quite yet. The Court’s opinion is expected to be released sometime in June and it’s incredibly unlikely that the information will be leaked until then. This article explains how the Justices prepare their written decisions and what comes next in that inner circle.

So in the meantime, we speculate about how the Court might decide based on how the oral arguments went, what questions were asked by which Justices and how well attorneys made their arguments. Of course, this analysis isn’t definitive – a line of questioning along a particular path doesn’t mean the Justice is convinced. That being said, here is a breakdown of where the Justices might fall on the issues presented, based on observations of the oral arguments.

Day 1
On Day 1 of the oral arguments, the Court questioned whether it could make a decision on the case at all or whether the Tax Anti-Injunction Act would delay a ruling until after the individual mandate takes effect and someone actually pays a penalty. Attorneys for both sides argued that the law shouldn’t apply to this case – they want a resolution. The Court had to appoint an independent attorney to argue the other side.

The tone of the first hearing indicated that the Court is unlikely to apply the Anti-Injunction Act, meaning that it would review the merits of the case. If it decides otherwise, it will simply delay the inevitable Supreme Court review of the law.

Day 2
Day 2 was the main event – arguments on whether the individual mandate to buy health insurance beginning in 2014 is constitutional. Congress based its authority to pass the health care reform law, including the individual mandate, on its constitutional power to regulate interstate commerce. Opponents of the law argue that the power does not include forcing people to participate in commerce by buying a product.

The feeling after this round of oral arguments was decidedly optimistic for the law’s opponents. Some of the Justices seemed highly skeptical that any limit could be imposed on Congressional power if this law was allowed to stand. They questioned whether Americans could be required to buy cell phones or gym memberships or broccoli if Congress thought it would improve the country’s health. Counsel for the Obama administration attempted to distinguish the delivery of health care from any other product, but the effectiveness of his arguments seemed uncertain. It’s widely expected that the Court will split along ideological lines on this issue – the liberal members of the Court seemed to accept that Congress acted appropriately in passing the law – but there are at least two Justices whose opinions are in question.

Day 3
On Day 3, the Justices assumed for the sake of the argument that the individual mandate would be struck down. If that happens, they will have to decide whether the rest of the law stand on its own without the mandate, Opponents of the law argued that without the individual mandate, the law cannot function as intended and would have to be struck down in its entirety. However, the Obama administration took the position that only certain provisions of the law – those related to guaranteed issue and underwriting restrictions – would be invalid. Accordingly, those parts of the law could be severed and all other provisions could stand.

The optimism of the law’s opponents after the Day 2 arguments was tempered by the Justice’s comments during this portion of the hearings. The Justices seemed to accept that the parts of the law directly related to the individual mandate would have to be stricken if the mandate is found unconstitutional, but appeared divided on whether other provisions should be struck down. A number of Justices focused on the number of health care reform provisions that were completely unrelated and questioned why those rules should be affected by the individual mandate. Counsel for the law’s opponents tried to make the case that the entire law hinged on this single provision, but success is far from sure on that point.

Day 3 also included arguments on whether the Medicaid expansion required by health care reform is constitutional. The states challenging the law argued that the conditions to receive federal funds for the Medicaid expansion were burdensome to the level of being coercive. The Justices again appeared divided on whether the states could object to conditions placed on accepting federal money.

The bottom line
After the extraordinary six hours of oral argument on the health care reform law, we are somewhat closer to having answers and we can try to guess what those answers might be. If the Court splits ideologically as expected, Justices Alito, Scalia and Thomas would vote against the mandate and Justices Breyer, Ginsburg, Sotomayor and Kagan would support it. In that situation, Chief Justice Roberts and Justice Kennedy, whose positions are more questionable, would have to cast the decisive votes. However, speculation is just that until the Court decides to issue its official ruling on the law.

In the meantime, your clients are likely wondering how to proceed—should they hold off on complying with provisions of the law until a decision is announced? Absolutely not. Advise clients to continue with any current compliance efforts and also with plans to comply with upcoming provisions, such as the SBC requirement this fall. In addition, Broker Briefcase users can provide the document Supreme Court Hears Health Care Reform Law Challenge to keep clients informed.

One response to “The Supreme Court’s Health Care Reform Decision”

  1. No matter what haeppns, and specifically if Obamacare is struck down by the courts, we will be back to square one. The rich will be able to afford the best medical insurance, the poor and immigrants will be afforded cheap insurance because they qualify, and the middle class will bear the brunt of insurance like I do. I have a good job but pay a lot of premium for family plan medical insurance and sometimes I get bills for expenses that I thought would be covered. Any plan needs to be scrutinized and tested before it is passed along to the citizens of our country.

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