Could The Health Law End Up Back In Court? Opponents Think So

July 18, 2012

If you thought last month’s Supreme Court ruling upholding the Affordable Care Act was the final word on the legality of the health law, think again. Some conservative scholars believe they may have discovered a flaw that could send the law back to court, or at least cause some big problems for its implementation.

To understand the potential problem, first you have to understand a little about how the law is supposed to work. Starting in the year 2014, every state is scheduled to have a health exchange — a sort of online marketplace where individuals and small businesses will be able to go to shop for health insurance. For low- and middle-income individuals, there will be help — in the form of tax credits — to pay for the insurance.

My advice to Republicans is get over it. The law is the law and we’re moving ahead with it. Quit trying to scare people.

– Sen. Tom Harkin, D-Iowa

States aren’t required, however, to set up these exchanges. Indeed, many governors have already said they won’t. The law takes that into account, and says if the states don’t create an exchange, the federal government will set one up and run it instead.

But there’s a problem.

“The statute doesn’t authorize tax credits in federal health insurance exchanges; it authorizes them solely through state health insurance exchanges,” says Michael Cannon, head of health policy at the libertarian Cato Institute and an opponent of the health law.

Cannon says when he first discovered the anomaly last year, he assumed it was a glitch. He says further research showed it might have been intentional. In a paper out this week, Cannon and Jonathan Adler, a law professor at Case Western Reserve University, claim Democrats decided that it was important for states to run the exchanges.

The faction that prevailed in writing the law, Cannon says, decided to offer the tax credits in exchanges established by the states and not offer them in exchanges established by the federal government because that would be a tremendous incentive for states to create exchanges.

Cannon says as a result of that decision, recent rules issued by the IRS allowing tax credits to be offered in exchanges run by either the states or the federal government are, in his words, “illegal.”

“The clear language of the statute and the legislative history show that the IRS does not have the authority to do that,” Cannon says.

But that opinion is far from universal.

“That’s, unfortunately for them, wrong,” says Timothy Jost, a professor at the Washington and Lee University School of Law and a strong backer of the health law.

Jost admits the law isn’t written as clearly as it could have been. But he says it is pretty clear that a federally run exchange will be able to do everything a state exchange can, including provide tax credits, despite Cannon’s claim that federal exchanges can’t.

“This is an interesting theory, but it’s completely contrary to the structure of the legislation and even the language of the legislation,” he says.

EnlargeAlex Wong/Getty ImagesDemocratuic Sen. Tom Harkin of Iowa, who was involved in writing the health law, rejects claims that federal health exchanges won’t be able to provide tax credits.

And what about Cannon’s assertion that Senate Democrats gave only the state exchanges the right to provide tax credits as a way to encourage the states to create them? A quick survey of Senate Democrats involved in writing the health law didn’t uncover any who recall it that way.

“No, I think they’re available in both,” says Tom Harkin, the Iowa Democrat who chairs the Senate Health, Education, Labor and Pensions Committee.

Sen. Ron Wyden, an Oregon Democrat and senior member of the Finance Committee, remembers it the same way.

“That’s correct, and I make that judgment based on everything that came up in the Senate Finance Committee and the fact that the exchanges were something that were popular on both sides of the aisle,” Wyden says.

In fact, Democratic senators like Ohio’s Sherrod Brown say that those who are still trying to challenge the law are just out to make trouble.

“They’re just going to keep trying to find things in the law that they think, for whatever reason, won’t work,” Brown says. “I just think they should be ashamed of themselves.”

Harkin was more blunt. “My advice to Republicans is get over it. The law is the law and we’re moving ahead with it. Quit trying to scare people,” he says.

But between now and Election Day, opponents of the health law are likely to continue to hammer at it any way they can.

http://www.npr.org/blogs/health/2012/07/18/156936766/could-the-health-law-end-up-back-in-court-opponents-think-so

Region’s hospitals, insurers keep close eye on impact of federal decision

9:21 PM, Mar. 26, 2012  |  

Written by

Laura Ungar for the Louisville Courier-Journal

It’s been cited as a driving force behind the proposed but thwarted merger involving University Hospital and a Catholic health care system.

It’s inspired new partnerships called “accountable care organizations,” including one being piloted by Norton Healthcare and Humana.

And it’s been hailed as providing extended coverage for more than 35,000 young adults in Kentucky.

The federal health reform law has already started making an impact locally — so area health advocates and officials are tuned in to this week’s Supreme Court proceedings.

“I think the entire health care sector and insurance sector are watching this closely because it has significant implications on both industries,” said Stephen Williams, chief executive officer of Norton. “This is very far-reaching.”

Jodi Mitchell, executive director of Kentucky Voices for Health, a coalition of health advocacy groups, said her organization takes no position on the arguments before the Supreme Court, instead concentrating on educating the public about health reform. But she added: “We expect the law will be upheld.”

One of the most well-known provisions of the Affordable Care Act, as the reform law is called, requires insurers that offer coverage to children on their parents’ plans to make that coverage available until the child is 26.

That portion of the law took effect in September 2010. According to the U.S. Department of Health & Human Services, 35,610 young Kentuckians already have gained coverage through that provision. In Indiana, 38,480 young adults gained coverage.

“This is helpful for college students going to school who can’t afford coverage,” Mitchell said. “And because they’re generally healthy, they’re advantageous on plans where you’re trying to spread out the risk.”

This week’s arguments before the Supreme Court won’t involve that provision, nor several others of the broad-ranging law, but instead will focus on a key and controversial provision — requiring nearly all Americans to have health insurance by 2014.

According to the U.S. Census Bureau, an average of 15.5 percent of Kentuckians — or 663,000 people — lacked health insurance from 2008-2010, as did 12.8 percent of Hoosiers, or 813,000 people. Nationally, 15.8 percent of Americans lacked health insurance during that period.

Health care experts say the reform law eventually would bring the rate of uninsured Americans down by about 60 percent.

Louisville-based Humana Inc., one of the nation’s largest health insurers, said it has long supported universal health coverage for all Americans.

And the company said that other parts of the reform law, such as requiring insurers to cover all applicants regardless of their health condition, cannot work without the “individual mandate” provision. Otherwise, healthy people could pass up insurance while sicker people would get it, raising premiums for all.

Officials at local hospital systems, which provide charity care for many uninsured patients and have unpaid bills from others, have said projections of how many people would gain coverage under the reform law are encouraging.

But they add a caveat — saying it’s unclear if projected gains in patients who would get insurance under health reform would be offset by funding reductions in a state and federal program for hospitals that treat large numbers of low-income people.

Officials at University Hospital, which cares for large numbers of uninsured patients, talked about this uncertainty during the debate involving the proposed merger with Jewish Hospital & St. Mary’s HealthCare and Lexington-based St. Joseph Health System, which is part of Catholic Health Initiatives of Denver. Gov. Steve Beshear ultimately rejected the proposed three-way merger, and Jewish and St. Joseph merged without University to create KentuckyOne Health.

Officials at those health care organizations — as well as others such as Norton and Baptist Hospital East — have said the reform law encourages them to partner with others to become more efficient, improve care and reduce costs.

Norton and UK leaders said the law is one of the main reasons behind their partnership, announced in June. That partnership includes a statewide stroke collaboration and a cancer program that would share resources.

Norton and Humana are also piloting an “accountable care organization” for commercially insured patients, a program that establishes financial incentives for health care providers to improve quality, eliminate waste and control costs. Louisville is one of four national sites in the ACO Pilot Project of The Engelberg Center for Health Care Reform at the Brookings Institution and The Dartmouth Institute for Health Policy and Clinical Practice. Officials said the program brings a emphasis on wellness and preventive care for patients.

Last October, the U.S. Centers for Medicare & Medicaid Services finalized new rules under the health reform law to help doctors and hospitals better coordinate care for Medicare patients through ACOs. The Medicare program is designed to reward ACOs that lower the growth of health care costs while still providing quality care.

Williams said Norton will still go forward with the ACO and partnerships no matter what happens with the health reform law.

“Even if major parts of it get repealed, I believe what we are doing and what other providers are doing we will continue to do,” he said. With health care expenditures making up 18 percent of the Gross Domestic Product in the United States, “we have to bend the cost curve or we are going to cripple the economy.”

SOURCE:

http://www.courier-journal.com/article/20120326/NEWS01/303260073/Region-s-hospitals-insurers-keep-close-eye-impact-federal-decision-

The Health Law And The Supreme Court: A Primer For The Upcoming Oral Arguments

Later this month, the high court will consider the fate of the health law. Here are key points to keep in mind while watching the action.

Topics: Supreme Court, Politics, Health Reform

By Stuart Taylor, Jr.

Mar 15, 2012

How big is the constitutional challenge to the Obama health care law, which the Supreme Court will hear on March 26-28?

For starters, it’s big enough for the justices to schedule six hours of arguments — more time than given to any case since 1966. After all, the Affordable Care Act is arguably the most consequential domestic legislation since the creation of Medicare in 1965.

It’s also big enough to attract more briefs than any other case in history. At least 170, including more than 120 “friend-of-the-court” or amicus briefs, have been filed, many of which are joined by 10, 20 or more groups of every imaginable description.

And, finally, it’s big enough to cause the justices to postpone until October half of the 12 cases that they would ordinarily hear in April in order to clear time to get started on the health care opinions that they are expected to issue by the late June, or possibly, early July.

 

What’s it all about?
The immediate issues, in the order the court will hear them, begin with the question of whether the so-called “individual mandate” — which requires that almost all Americans without coverage buy individual health insurance policies or pay fines — is ripe for adjudication now. Or must the case be deferred until 2015 because of the 1867 Anti-Injunction Act, which bars federal courts from ruling on the constitutionality of tax laws before payments are due?

After that come the arguments about what many consider the central issue: whether the mandate, which is unprecedented, should be voided because it represents an unconstitutional exercise of Congress’ powers to regulate commerce and to levy taxes.

Next is what becomes of the law’s hundreds of other provisions, covering 2,700 pages, if the mandate is unconstitutional? Are some or all of them “severable,” meaning that Congress would have wanted them to stand even if the mandate falls? For example, what about the provisions establishing tax credits to help small businesses and individuals buy health insurance and taxing large employers that do not provide full-time employees government-approved coverage?

Apart from those issues, does the law’s expansion of Medicaid violate the sovereignty of the states by effectively requiring them to spend more of their own money or forfeit all of the federal Medicaid money they now receive?

What’s the likely outcome?
Nobody knows. It’s clear that the court’s four more liberal members, like almost all other liberal legal experts, will find the law constitutional in all respects. It’s also clear that conservative Justice Clarence Thomas will vote to strike down much or all of the law. It’s less clear what swing-voting Justice Anthony Kennedy and conservative Chief Justice John Roberts as well as Justices Antonin Scalia and Samuel Alito will do.

Kennedy, Roberts, Alito, and (especially) Scalia — whom the government’s brief quotes five times — have all joined past decisions construing federal regulatory power very broadly. Two respected conservative federal appeals court judges, Laurence Silberman and Geoffrey Sutton, who is one of Scalia’s favorite law clerks, have upheld the law.

What are the major arguments for and against the individual mandate?
Defenders say that the broad constitutional power of Congress to regulate interstate commerce, and the even broader power to “lay and collect taxes,” both provide ample authority for requiring that people buy insurance as part of a comprehensive scheme to end “discriminatory insurance practices that have excluded millions of people from coverage based on medical history,” in the words of a brief by Solicitor General Donald Verrilli.

The same brief also asserts that uninsured people consume $43 billion a year worth of emergency-room and other health care for which they do not pay, costs that are shifted to insurers and that raise insured families’ average premiums by more than $1,000 a year. Critics of the law dispute these numbers.

The 26 states challenging the law (along with a business group and four individuals) say, in the words of a brief by Paul Clement, who was solicitor general under President George W. Bush: “The individual mandate rests on a claim of federal power that is both unprecedented and unbounded: the power to compel individuals to engage in commerce in order more effectively to regulate commerce. This asserted power does not exist. … It is a revolution in the relationship between the central government and the governed.”

Clement also stresses that President Barack Obama and his allies in Congress insisted during the debate before the measure became law that the financial penalty for failing to comply with the individual mandate is not a tax. They should not be allowed, he argues, to “enact legislation that would not have passed had it been labeled a tax and then turn around and defend it as a valid exercise of the tax power.”

The Anti-Injunction Act?
This reconstruction-era statute bars courts from considering the constitutionality of tax laws until payments are due. It will apply here if the court deems the individual mandate’s penalty provision a “tax.”

Because the mandate is not scheduled to take effect until 2014 and the first penalties would not be due until 2015, the federal courts would not yet have jurisdiction to consider the constitutionality of the penalties or the mandate. In other words, consideration of the case would be postponed until 2015, and, therefore, such a decision would convert the biggest case in decades into the biggest anticlimax in Supreme Court history.

Both sides say that the Anti-Injunction Act does not apply. But the court appointed a lawyer as “friend of the court” to argue that it does, as one federal appeals court held. This appointment signaled the court’s care to observe arguable limits on its jurisdiction even when the parties agree that it has jurisdiction.

What are the major arguments on severability?
The government says that if the court strikes down the mandate, it should defer until future cases any ruling on the severability of most other provisions. But, if it does rule on severability, the government maintains that only two other provisions should go down with the mandate. Those are the “guaranteed-issue” and “community-rating” provisions, which bar insurers from denying coverage or charging higher premiums because of medical history. Without the individual mandate, the government says, those provisions would send premiums soaring by creating incentives for healthy people to defer buying insurance until they need health care.

The 26 states argue that the mandate was deemed by Congress to be “necessary to make the other provisions work as intended,” and that the court should strike down the whole law.

The court appointed another friend-of-the-court lawyer to write a brief arguing that a decision striking down the mandate should leave the rest of the law — including guaranteed issue and community rating — intact.

What are the major arguments on Medicaid?
The government asserts that “it is well settled that Congress’s spending power includes the power to fix the terms on which it will disburse funds to the states,” that Congress has repeatedly expanded the state-federal Medicaid program, and that this new expansion will not “impose significantly onerous burdens on the states.”

The 26 states counter that the Medicaid expansion unconstitutionally coerces them because it “threatens States with the loss of every penny of federal funding under the single largest grant-in-aid program in existence — literally billions of dollars each year — if they do not capitulate to Congress’ steep new demands.”

Stuart Taylor, Jr. is an author and contributor to the National Journal and other publications.

SOURCE:

http://www.kaiserhealthnews.org/Stories/2012/March/15/supreme-court-curtain-raiser.aspx