5 key legal issues in health reform case

On Monday, the U.S. Supreme Court announced it will hear oral arguments on the constitutionality of the Patient Protection and Affordable Care Act (PPACA). In a decision expected by most legal experts, the Supreme Court Justices agreed to hear the case that has grabbed headlines for over a year. 

In particular, the Supreme Court will review the legal arguments stemming from an 11th Circuit Appellate Decision in August (which BenefitMall has reported on, click here for details). This case has drawn a fair amount attention because the legal complaint was spearheaded by 26 state attorneys general and the National Federation of Independent Business, which oppose PPACA’s individual mandate.    

In addition to hearing the case, another noteworthy announcement is the amount of time that the Court will set aside to hear oral arguments in this case. A full 5½ hours of time has been allotted so the Court can hear several key legal issues that need to be resolved. Although the length of time may not appear to be significant from a layperson’s perspective, it is in fact unprecedented during the past 100 years with maybe one exception.     

The announcement granting “Writ of Certiorari” will empower the Court to cover several key legal issues, most likely including:

1. Legal Standing. Do the 26 states suing the federal government have sufficient legal standing to bring the case to court? Several lower courts have held that states have insufficient standing to bring the case to trial. Other courts have upheld their states’ legal rights to do so. 

2. Timing. Can the courts consider a lawsuit on PPACA now? The 4th Circuit Court of Appeals in Richmond, Va., ruled that the mandate that individuals must purchase health insurance is a tax because it was written into the IRS tax code. The Anti-Injunction Act prohibits federal courts from hearing suits against federal taxes until the tax becomes effective. If the U.S. Supreme Court finds that the PPACA individual mandate is a tax, it can't be challenged in a court of law until after 2014, when the tax penalties become effective for individuals failing to obtain health insurance coverage.

3. The Individual Mandate Provisions. PPACA requires that effective 2014 all private persons must purchase health insurance, be covered by a government program, or face a tax penalty if they choose not to secure insurance coverage. This mandate was struck down by the 11th Circuit Court of Appeals in Atlanta, whose ruling was appealed to the U.S. Supreme Court by the Obama Administration. The Supreme Court Justices will likely rule on whether the individual mandate requirement exceeds the bounds of the Commerce Clause in the U.S. Constitution that delegates the authority to regulate interstate commerce to the federal government.     

4. The Medicaid Expansion Provisions. The 26 states claim that the new Medicaid expansion in PPACA is an unconstitutional coercion by the federal government since the states must significantly fund and expand their respective Medicaid programs with limited leeway at the state level.    

5. Severability. A severability clause in a new law like PPACA generally provides that if any particular provision in a statute or act is declared unconstitutional, the balance of the law remains in force.  It is considered to be standard boilerplate for federal legislation. In the last hours before the U.S. Senate voted on its version of PPACA, a severability clause was dropped from the final version. The U.S. House ultimately approved the Senate version that has no severability clause. Some critics of the PPACA hold that the lack of a severability clause is a fatal flaw, and if the individual mandate to purchase the clause or any other clause is declared unconstitutional, the entire act is void. PPACA proponents hold that the lack of a severability clause is not a critical issue and will have no bearing on PPACA.

A spokesperson for the U.S. Supreme Court says the PPACA legal issues are likely to be argued sometime next March. Decisions for cases argued in the Court's spring term are generally published by June. If that timing holds up, the decision will come in the middle of the 2012 election cycle and will have a definite impact on the outcome of the election. Stay tuned for further developments.

We have covered many of the related court decisions that involve PPACA and will continue to follow these issues for you. Please visit www.HealthcareExchange.com for those and other blog posts, polls, surveys and numerous resources and visit www.benefitmall.com to view past Legislative Alerts.

About the Author
Michael Gomes

Michael Gomes

Michael Gomes is the Executive Vice President of Market Operations for BenefitMall. Gomes is responsible for BenefitMall’s sales and marketing organization, the national management of its Carrier partnerships, customer support and service and all new business operations.  

A veteran of the insurance industry, Gomes brings to BenefitMall more than 25 years of experience in planning, developing and executing national sales initiatives, including expertise in the area of Carrier relations and organizational development. 

Prior to joining BenefitMall, Gomes was Vice President of Sales and Business Development with national responsibility for the Small Group Business segment of Prudential Healthcare. Previously, he served as the Group Vice President of Strategic Sales Planning and Business Development at New York Life Insurance Company. Prior to that, Gomes served as Senior Vice President of Sales and Business Development for Empire Blue Cross and Blue Shield, where he also served as Chief Executive of its small and mid-size markets.  His extensive industry experience also includes work with New Jersey Blue Cross and Blue Shield and the New Jersey Department of Insurance.

Gomes graduated from Rutgers University with a Bachelor of Arts degree in economics, and earned a Master’s degree in quantitative analysis and econometrics from Fairleigh Dickinson University in Madison, New Jersey. A native of New Jersey for over 40 years, he now resides in Dallas, Texas.


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