Checklist: Supreme Court

March 1, 2012

The Supreme Court agreed to determine the constitutionality of the individual mandate and Medicaid expansion of under the Patient Protection and Affordable Care Act.

What are the main arguments about the constitutionality of the individual mandate?

The main arguments over the individual mandate focus on three parts of the constitution: the Commerce Clause, the Necessary and Proper Clause, and Congress's taxing power.

Commerce Clause: According to the constitution and subsequent Supreme Court cases, Congress has the power to regulate interstate commerce. Those who are challenging the mandate argue that the choice to not purchase insurance constitutes economic inactivity, which is not interstate commerce. The government argues that everyone will use healthcare at some point in their lives. Because the uninsured typically do not pay the full cost of their care, the financial burden of that care is passed onto the insured, placing a burden on interstate commerce.

Taxing Power: Because the penalty for not having healthcare coverage will be part of the tax code and generate revenue, the federal government argues that it is a tax. The plantiffs argue that the sanction is a civil regulatory penalty and not a tax.

What are the implications of a Supreme Court decision on the constitutionality of the individual mandate?

If the court strikes down the individual mandate, the court must also determine if the mandate can be severed from the rest of PPACA or if by striking down the mandate, all of PPACA must be declared unconstitutional. Depending on the outcome, other parts of PPACA could be affected, particularly provisions for expanding access to affordable care. The court's decision could also have broader effects on congressional power as dictated by the constitution.

What are the main arguments about the constitutionality of the Medicaid expansion?

Medicaid is a voluntary program for states. The federal government says that it can stipulate conditions for states to receive federal Medicaid funds and that no court has deemed any condition as coercive. The federal government has also increased mandatory coverage categories over the years without any complaint.

The plantiffs argue that the new expansions are coercive because Medicaid funds will only be given to states that update their coverage to PPACA requirements. They argue that states are so reliant on federal Medicaid funds that states have no choice but to expand coverage. According to the plantiffs, this oversteps Congress's ability to regulate states through the Spending Clause. Several states that are not part of the plantiff pool have filed amicus briefs in support of PPACA's Medicaid expansion.

What are the implications of a Supreme Court decision on the constitutionality of the Medicaid expansion?

If the court declares the Medicaid expansion unconstitutional, the decision will not only affect PPACA, but also a wide array of legislation that hinges on the Spending Clause rights afforded to Congress. The court will likely rule on the ability to sever the Medicaid expansion during the hearing.

If both the individual mandate and Medicaid expansion are struck down, PPACA will lack two main provisions that expanded affordable health insurance.

If individual mandate is upheld and the Medicaid expansion is struck down, cost-sharing subsidies through the insurance exchanges will only be available to those at or above 100% of Federal Poverty Level. Medicaid coverage would continue to be at the state's optional level with federally matched funds, not the expanded rates allowed through PPACA.

-Miranda Hester