As expected, the U.S. Supreme Court has agreed to review (pdf) cases challenging the constitutionality of the Affordable Care Act. The Court accepted the appeals filed in three cases that question the validity of the healthcare reform law, and will hear more than five hours of arguments during the Court’s spring session. While the petitioners in the three cases presented a number of issues for adjudication, the Court will undertake review of the following issues only:

  • Whether the Affordable Care Act’s provisions requiring virtually all individuals to obtain health insurance or pay a penalty as of 2014 –commonly referred to as the law’s individual mandate – is constitutional. Specifically, in enacting the individual mandate, did Congress exceed its enumerated powers under the Constitution?
  • If the individual mandate is unconstitutional, do the remaining portions of the law still stand, or is the entire law rendered invalid because it is non-severable?
  • Is the law’s expansion of the Medicaid program constitutional?
  • Does the Anti-Injunction Act (AIA) bar state challenges to the individual mandate?

The petitions in the following cases were granted review: National Federation of Independent Business v. Sebelius, et. al. (pdf) (11-393); Department of Health and Human Services, et al., v. Florida, et al. (pdf) (11-398); and Florida, et al., v. Department of Health and Human Services, et al. (pdf) (11-400).

Notably, the Court did not agree to take up the two 4th Circuit decisions that rejected lawsuits challenging the Affordable Care Act’s constitutionally on technical grounds – including a finding that the action was barred by the AIA – and the decision by the 6th Circuit upholding the Affordable Care Act’s constitutionality.

In addition, the Court has not agreed to specifically address whether the Affordable Care Act’s employer mandate is legitimate. As of 2014, the law’s shared responsibility provisions – also known as the “pay or play” mandate – will require employers with 50 or more employees to provide affordable minimal essential health coverage to their full-time employees or pay a penalty. Instead, the Court will focus on the law’s individual responsibility provisions.

While more than 20 cases have been filed nationwide to challenge the law’s validity, most have boiled down to the same argument and analysis: whether Congress has the power under the Constitution’s Commerce Clause, or associated Necessary and Proper Clause, to compel an individual to purchase insurance or pay a penalty. Those finding that the law is constitutional have argued that the individual mandate does, indeed, regulate economic activity. This camp has reasoned that all individuals at one point or another avail themselves of medical treatment. Therefore, the failure to purchase health coverage would disrupt the insurance market, and have a substantial effect on interstate commerce. Thus, the argument follows, Congress had a rational basis to believe that the individual mandate is essential to its larger economic plan to reform the healthcare and health insurance markets.

Those opposed to the mandate have contended that the law’s individual mandate seeks to regulate economic inactivity – i.e., the failure to maintain insurance – which is the not the type of economic activity that can be Congressionally monitored and controlled pursuant to the Commerce Clause. Moreover, those opposed to the provision maintain that the mandate is extremely overreaching. As stated in the Florida, et al., v. HHS opinion, Congress cannot “mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”

As for the AIA issue, this law provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” The Court asked the parties in Department of Health and Human Services, et al., v. Florida to brief whether the AIA bars the suit brought by respondents challenging the minimum coverage provision. The crux of this argument will be whether the assessment of a penalty constitutes a tax triggering AIA coverage. If the Court finds that the AIA does, indeed, bar these lawsuits, then the Court could delay consideration of the law until 2014 when such taxes are assessed.

Finally, another argument against the Affordable Care Act is that it unconstitutionally expands and alters the Medicaid program to such an extent that the states cannot afford the newly-imposed costs and burdens.

Oral arguments on these issues will likely occur early in 2012. It is expected that the Court will issue its opinions in the cases by July 2012, during the heat of the upcoming Presidential and Congressional campaigns.