Numerous legal challenges to the Patient Protection and Affordable Care Act (PPACA) have been filed since the health care reform law was enacted in March, 2010 arguing that Congress exceeded its Constitutional authority in adopting the law. This Constitutional challenge has finally worked its way up to the United States Supreme Court. On January 6, 2012, The National Restaurant Association, in an amicus brief prepared by Seyfarth Shaw, has urged the Supreme Court that if it finds PPACA's individual mandate to be unconstitutional, the entire statute should be struck down.
The PPACA includes a minimum coverage provision, referred to as the individual mandate, which requires most individuals to maintain a minimum level of health insurance coverage beginning in 2014. Those individuals who fail to maintain this coverage would be required to pay a penalty under the law. The lawsuits brought challenging PPACA argue that Congress exceeded its authority under the Constitution's Commerce Clause in enacting this individual mandate.
Under the Commerce Clause, Congress can regulate any economic activity that is in the stream of or substantially affects interstate commerce. The PPACA challengers argue that a decision to not purchase health insurance constitutes inactivity, not activity and that Congress has no Constitutional authority to regulate inactivity. In defending PPACA, the federal government has argued that because everyone will need health care at some point in their lives, and hospitals may not turn away people in need of emergency care, the cost of health care for uninsured people is shifted to individuals who currently have health care through increased costs and premiums. As a result, the federal government argues, individuals' decisions to not purchase health insurance places a substantial burden on interstate commerce. Therefore, the federal government reasons, enacting PPACA was within Congress's Constitutional authority under the Commerce Clause.
In the consolidated cases currently on appeal before the Supreme Court, the district court held that Congress did, in fact, exceed its Constitutional authority in adopting the individual mandate in PPACA. The district court also found that as the individual mandate was central to the enactment of PPACA, it could not be severed from the rest of the act, and all of PPACA must be struck down. On appeal, the Eleventh Circuit Court of Appeals agreed that Congress exceeded its Constitutional authority in enacting the individual mandate under PPACA, but disagreed with the district court's decision regarding severability. The Eleventh Circuit Court of Appeals instead ruled that the individual mandate could be severed from the rest of PPACA such that only the individual mandate would be struck down.
If the Supreme Court agreed with the Eleventh Circuit, the individual mandate would be struck down, but the rest of PPACA, including the provisions applicable to employers such as the employer "pay or play" mandate, and the elimination of pre-existing condition exclusions and lifetime limits in employer health plans would remain in effect.
The National Restaurant Association's amicus brief does not take a position as to whether or not the individual mandate was Constitutional. The brief argues, however, that if the individual mandate is found to be unconstitutional, then it cannot be severed from the rest of the Act and all of PPACA must be struck down.
Generally speaking, when courts find a provision of a law unconstitutional, they try to limit the solution to striking down as little of the law as possible. The National Restaurant Association brief argues that this rule is not absolute, and that determining whether an unconstitutional provision can be severed from the remainder of the statute hinges on whether the provisions that would remain can function "in a manner consistent with the intent of Congress" in passing the act. The brief argues that PPACA was designed and intended by Congress as an integrated remedy to the shortcomings of the national health care coverage system. As such, congressional intent would not be served by severing the individual mandate and leaving in place the remainder of Act such as the employer mandate.
In fact, the brief argues, if the other provisions of PPACA remain in effect without the individual mandate, the Act would actually exacerbate many of the very problems Congress sought to ameliorate, and the cost of health care coverage would significantly increase. The brief highlights particular features of PPACA, such as the ban on preexisting condition exclusions, the ban on lifetime and annual limits, and the requirement for coverage of adult children that would, in the absence of the individual mandate, result in increased health insurance costs for employers and individuals seeking insurance coverage. As a result, the brief reasons, many restaurant industry employers would no longer be able to afford to provide any health care coverage to their employees, forcing those employees to seek coverage from government-subsidized sources, which will increase the burden on federal and state taxpayers, and undermine the private employer-based health insurance system.
Rather than the Supreme Court attempting to determine congressional intent with regard to whether each particular provision of PPACA could stand without the individual mandate in place, the National Restaurant Association brief argues the entire interrelated Act should be invalidated, so that Congress may exercise its proper role and determine whether any of the remaining provisions should be enacted absent the individual mandate. Click here to read the brief.
The Supreme Court will hear six hours of oral arguments on these cases on March 26th through March 28th.