All you need to know about the Supreme Court's health-care reform case, which begins today
By C.H. | NEW YORK
BARACK OBAMA signed his health reform into law on March 23rd, 2010. Within minutes Florida's attorney-general had filed suit against the law, along with 12 other states. Since then they have been joined by the National Federation of Independent Business, four private individuals and 13 additional states. Starting today the Supreme Court will hear their case. A decision is expected by the end of June.
Most political brawls are drummed-up follies, but the fight over health-care reform is legitimately historic. The law is the biggest achievement of Barack Obama's presidency. If it survives, Democrats say, it will expand and transform American health care. Republicans, though, see it as a government intrusion into private affairs. If the law is upheld, they say, no area of American life will be safe.
America's highest court usually devotes one hour to arguments. For this case it will devote six hours, spread over three days. The Economist has a seat for the proceedings; we'll be posting our thoughts on Wednesday, and a detailed story will appear in next week's issue. In the meantime, here is a guide to the arguments.
Reams have been written about the case. This guide attempts to provide a simplified summary. Readers hungry for additional information should visit the American Bar Association, the SCOTUS blog and the ACA Litigation blog, which are stocked with briefs and other resources. C-SPAN has a video of a great debate between Paul Clement (the lawyer for the states), Mike Carvin (the lawyer for the National Federation of Independent Business), Neal Katyal (a former Solicitor General) and Akhil Amar (a constitutional law professor at Yale).
QUESTIONS BEFORE THE COURT
There are four issues before the Supreme Court. Attention has centred on the constitutionality of the “individual mandate”, which requires most Americans to buy health insurance or pay a penalty. However there are three other questions before the court, two that are procedural and one that is substantive: whether the case must wait until 2015, after the mandate takes effect; whether the rest of the law must fall if the individual mandate is struck down; and whether the law coerces states to expand Medicaid, the health programme for the poor.
MONDAY: DECIDE NOW OR LATER?
Question: Does the Anti-Injunction Act prevent the court from deciding this case until 2015? The court has granted 90 minutes for arguments on this topic.
Background: The Anti-Injunction Act of 1867 bars court challenges to taxes before those taxes have been levied. The individual mandate will go into effect in 2014. Those who fail to buy insurance will pay their first penalty in 2015.
Mr Obama's argument: This is the rare instance in which Mr Obama and the states agree, albeit for different reasons. Mr Obama's lawyers want the court to decide the case now, arguing that Congress did not intend the law's “penalty” to be treated as a tax under the Anti-Injunction Act.
Challengers' argument: The case should be decided now. The health law assesses a “penalty”, not a tax. Furthermore, the suit challenges the mandate itself, not the penalty. The Anti-Injunction Act bars a person from suing, but it does not bar a state from doing so.
Court-appointed lawyer's argument: Because neither the challengers nor Mr Obama want a decision to be delayed, the court appointed a lawyer to argue that the case should wait until 2015. Robert Long, of Covington and Burling, contends that the court should not rule on a constitutional matter until it is compelled to do so, that is, after the tax has been levied.
Analysis: The government's argument here is among its most confusing. Mr Obama's lawyers argue that the penalty falls within Congress's power to tax, but the penalty should not be treated as a tax under the Anti-Injunction Act. Nevertheless, only one appellate court, in Virginia, ruled that the suit must wait until 2015.
TUESDAY: THE INDIVIDUAL MANDATE
Question: May Congress mandate the purchase of health insurance and penalise those who fail to obey? The court will spend two hours hearing arguments on this topic.
Background: America's health-care market has clear failings. In 2009 50m people without insurance bought health care they could not pay for. This shifted costs to those with insurance, in the form of higher fees. Meanwhile insurers may raise rates or deny coverage to the sick. The Democrats' health law attempts to remedy these problems, among others. The poor receive subsidised insurance. Those who can afford insurance are required to buy it. Those who disobey are assessed a small penalty. According to Democrats, requiring insurance for the healthy will balance the cost of insuring the sick. Those who buy insurance will no longer subsidise those who do not.
Mr Obama's argument: The constitution's commerce clause authorises Congress to regulate health care, an industry that accounts for nearly 18% of America's GDP. The health law seeks to expand insurance coverage and lower the cost of care. The individual mandate is a necessary, proper way to meet the law's goals. The law does not regulate inactivity, as the states contend. Not buying insurance is an economic decision to pay for your own health care. Given that millions of Americans buy more health care than they can pay for, the decision to self-insure has a substantive effect on interstate commerce. Furthermore, the mandate's penalty falls within Congress's power to tax.
Challengers' argument: The mandate is an unprecedented expansion of Congress's power, “a revolution in the relationship between the central government and the governed.” The commerce clause authorises Congress to regulate economic activity. It does not authorise Congress to regulate economic inactivity. Allow this mandate and Congress may require Americans to eat broccoli or buy cars to support Detroit's carmakers. The government's insistence that the penalty is a tax is undermined by Democrats' constant assertion, in 2009, that the penalty is nothing of the kind. Furthermore, the states are challenging the mandate, not the penalty.
Analysis: Two federal courts of appeals, in Ohio and Washington, DC, upheld the mandate. One federal court of appeals, the Eleventh Circuit, overturned it. The Supreme Court agreed to hear the appeal from the Eleventh Circuit. Working in Mr Obama's favour is a recent case, Gonzalez v Raich, in which the Supreme Court ruled that Congress could criminalise an individual's growth of medical marijuana for personal use. Antonin Scalia, a conservative justice, wrote: “Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce.”
WEDNESDAY: "SEVERABILITY"
Question: If the individual mandate falls, must the rest of the law fall too? The court will devote 90 minutes to this argument.
Background: The mandate is the most prominent piece of Mr Obama's health reform. However the law is gargantuan. Its 2,700 pages cover everything from calorie counts on menus to drug rebates for the elderly.
Mr Obama's argument: Should the mandate be overturned, only two other provisions should fall with it. The reform requires insurers to cover those with pre-existing conditions and bars them from hiking fees for the ill. Mr Obama's lawyers concede that the mandate is necessary for these requirements to work—without the mandate, individuals would simply wait until they got sick to buy insurance. This would prove disastrous for insurers. However the rest of the law should stand. The states may not fight provisions of the health law that do not apply to them.
Challengers' argument: Health reform sought to achieve near universal health coverage without increasing the deficit. The mandate was the main way to do this, but the entire law served this goal. If the mandate falls, the entire law should fall, too.
Court-appointed lawyer's argument: The Supreme Court appointed an impartial lawyer, Bartow Farr, to argue that the rest of the law should remain if the mandate falls. Mr Farr contends that the provisions outside of the mandate are “perfectly lawful”. Congress would rather have the law without the mandate than no health law at all.
Analysis: The insurance industry supported the law because of the mandate. The requirement that individuals buy insurance balanced the myriad, onerous rules on insurers. The Eleventh Circuit's ruling was insurers' worst nightmare. The appellate court struck down the mandate but upheld every other part of the law.
WEDNESDAY: MEDICAID
Question: Is Congress's expansion of Medicaid unduly coercive to the states? The court will hear one hour of arguments on this topic.
Background: Medicaid provides health care to the poor. It is paid for by both the federal government and the states. However Washington foots most of the bill, providing 50% to 83% of funding for each state's Medicaid programme. Beginning in 2014, the health law will expand Medicaid to childless adults with incomes of up to 138% of the federal poverty line.
Mr Obama's argument: This is not the first time that the federal government has expanded eligibility for Medicaid. The government may attach requirements to the aid that it provides. Strike down this expansion as coercive and other federal requirements would be similarly vulnerable. Besides, the federal government will pay for most of the expansion—100% in 2014, tapering to 90% by 2020.
Challengers' argument: The law's expansion of Medicaid is unduly coercive. Technically, states could refuse the government's new terms for Medicaid. But the federal government's support for Medicaid is so large that refusing Washington's help is impractical. States have no choice but to acquiesce to the government's terms, even though they are strapped for cash.
Analysis: No lower court sided with the states, making this challenge the least likely to succeed. However the Supreme Court surprised observers by agreeing to hear this issue in the first place, so another surprise may come in June.
