(SPBA is non-political and non-partisan…simply candid. SPBA and the author also make no pretense of providing legal advice.) November 15, 2011
On Nov. 14th, the U.S. Supreme Court Justices (SCOTUS & “Supremes”) issued its administrative decision of what/when they would consider in the PPACA (health reform) case. SPBA members were already well prepared on the facts & nuances. What the Supremes decided was less helpful (less definitive) than hoped. They will consider the constitutionality of the individual mandate and (probably more importantly financially and in judicial history) whether Congress can force expansion on state Medicaid programs. They also left the door open to consider things about operation or implementation of PPACA from the issues in question.
As we had predicted, the Supremes seem to have decided to pretend there was a severability provision (which would prevent killing the whole law if any one part is found unconstitutional by “severing” the defective part)…even though, in the scurry to throw together this law, Congress forgot to include a severability provision. This assumption is not a first. There have been precedents for this assumption.
ZINGER: There is a zinger you & I have covered before, but which most people are missing. In their decision yesterday, the Supremes indicated that they might appoint someone to present the argument that the Anti-Injunction Act prevents the court from ruling on a tax until anyone has actually been penalized (forced to pay). This could abort this whole upcoming case until after the mandates take effect in 2014 (2015 Court session). And….if President Obama is reelected, he could conceivably control when/if the case is taken up (removing the Anti-Injunction obstacle) by stalling when the “penalties” (such as for individuals who don’t get mandatory coverage) are actually imposed. Not surprisingly, the Obama Administration is encouraging that the Anti-Injunction Act be included in the decision process.
The reason for this confusion is that during the legislative process, Democrat Congressmen and the Obama Administration wanted to avoid the word “tax”, so they absolutely positively said that nothing in PPACA was a “tax”. As soon as court challenges popped up, the Obama Administration reversed itself and based its case that is a “tax”. Why would they now want it considered a tax? Congress has the clear Constitutional authority to levy “taxes”, and the Anti-Injunction Act would be a fall-back delay mechanism to a court ruling. The Obama Administration has also tried to say that the individual mandate is the centerpiece on which all of PPACA rests, so that removing the individual mandate could cause the whole law/intent of Congress to collapse. There is also the issue about the power of Congress to pass requirements for the national good.
Frankly, since the Supremes are VERY skittish about this case because it is so large, so politically emotional, and was a specific act of Congress, not just some side issue,…and the Supremes are not unaware that the projected timing of their final ruling (June 2012) is being hyped as a make-or-break factor in the voting outcome of who will be the next President…I would not be surprised if the Supremes take a convenient cop-out of delaying a decision, using the Anti-Injunction law as an excuse. Of course, both supporters & proponents will be very disappointed and a whole new cycle of conspiracy theories & finger-pointing will pop up. So, I’m just saying that you & clients should not assume that June 2012 will give a full answer.
RE-ELECTION?? What would be the political impact of a June 2012 mid-campaign decision on Obama’s reelection. Most Republicans and opponents predict his chance of reelection would be dead if any part of the law is ruled unconstitutional. Don’t assume that! If the individual mandate (which opponents have whipped into the main target of anger) were shot down, Republicans would lose one of their prime campaign themes to defeat Obama. Also, Americans tend to favor the determined underdog. That is how Obama is already positioning himself, and taking away the “guarantee every American will have health coverage” (individual mandate) would boost his underdog sympathy. So, don’t get lulled into simplistic political forecasts.
ACTUARIAL HELL: Let me repeat my be-careful-what-you-wish-for admonition about opposing the individual mandate. Unfortunately, most opponents targeted that as the symbolic prime issue. It has emotional appeal, but it would cause fatal anti-selection actuarial hell for plan stability & costs if people could just jump into a plan or sign up for coverage when they get an expensive diagnosis or on the way to the hospital. It would defeat the whole shared-risk concept. (Remember, when the first court challenge case came out against the mandate, I received 2 calls from vendors for machines that would be installed in ambulances, and hospital registration desks to let patients sign up for coverage moments before the costs start to pile up. I know, you ask why they would think TPAs would want to expedite actuarial abuse of their client plans. Chalk it up to the reputation SPBA members have as a leader in the broader medical issues community.)
To complete my glum news, let me again warn against assuming that PPACA will totally disappear someday, no matter what SCOTUS does and who gets elected President and the make-up of the next Congress. As we warned from the first day, the law and its goodies have quickly become part of the health framework and expectations of the public. So, health providers are evolving in PPACA-like directions, and things like oversight of insurers (and their shifting more from insured to self-funding business), and “children” to age 26, etc. etc. would be politically too hard to remove. So, your most prudent strategy is to proceed as if what you see is what you’ll get.