Obamacare, The Problem Child

In a series of high-stakes court battles, the Patient Protection and Affordable Care Act (PPACA) has viciously torn its way through the legal labyrinth. From a high-level procedural posture standpoint, many lower courts have heard cases involving PPACA.

U.S. District Judge Roger Vinson ruled that the individual health insurance mandate falls outside the federal authority in the Constitution, and that the provision could not be disconnected from PPACA; therefore concluding the entire Act must be struck down. In the converse, members of a three-judge panel at the District of Columbia U.S. Circuit Court of Appeals ruled 2-1 that the individual health coverage mandate is constitutional. The dissenting judge on the panel argued that the federal Anti-Injunction Act prohibits the federal courts from considering suits seeking to block implementation of new federal taxes, at least until they incur some sort of penalty. The 4th Circuit Court of Appeals agreed with that judge, dismissing two PPACA cases concerning the individual mandate, finding that the suits were barred under the Anti-Injunction Act.

The Eleventh Circuit Court of Appeals dividedly affirmed Judge Vinson’s decision in part; the panel agreed that the mandate was unconstitutional, but held that it actually could be severed from the rest of the Act, allowing the rest of PPACA to remain. The federal government declined to seek review by the Eleventh Circuit and instead petitioned for the U.S. Supreme Court to review the panel’s ruling. On November 14, 2011, the Supreme Court agreed to hear the case, and here we are today; the commencement of that hearing.

Does the problem child have a future?

Every child has a future. In this case, even if PPACA is struck down, all parties seem to agree that future healthcare reform will draw at least in part on Obamacare. However, in this case, of the four issues the Supreme Court has agreed to hear, the key issue is the constitutionality of the individual mandate.

According to a CMIO post, if the Court upholds the individual mandate it will go into effect in 2014. If they strike it down, the Court will then consider whether the mandate is severable from the remainder of the law, which will determine whether PPACA’s other provisions survive. If the Court decides that the individual mandate is “inextricably linked” to PPACA as a whole, they will likely strike down the entire Act.

One of the most frequently asked questions in regard to the individual mandate is, “What does the provision mean for those who don’t purchase healthcare?” Individuals who can but choose not to obtain qualifying health care coverage under this law will be required to pay a penalty as part of their income tax returns. In 2014, the penalty is $95 or 1% of the individual’s income, whichever is greater.

However, according to NPR, PPACA provides a vast system of subsidies to help people afford health insurance. Subsidies are available to people on a sliding scale, up to 400% of the poverty level. This year that would be a family of three with an income up to $76,360 and a family of four up to $92,050. Even then, if there’s no affordable policy available, people can be declared exempt. And most of those with insurance provided by their employer will meet the requirement automatically, so they won’t have to do anything.

The two year check up.

The PPACA is alive and kicking with a seemingly healthy heartbeat. I say healthy because of my prediction on how open-and-shut this case is in light of other recent cases on which this Court has ruled, in addition to the myriad tools they have at their disposal. As a matter of fact, given the language of the Commerce Clause, the Court’s clear disdain for how politically-charged this argument has become, and its rulings in Gonzales v. Raich and the cases cited within that case, I truly cannot see how this Court could possibly strike PPACA down, without doing so in the face of all the aforementioned.

In an attempt to avoid any more personal opinions, I’ll just give you a few facts as outlined by Bloomberg. Thanks to PPACA, as of today:

  • More than one of every four Americans last year received a free mammogram, colonoscopy or flu shot.
  • Roughly 3.6 million Medicare recipients saved an average of $604 as the law began closing a gap in their prescription- drug coverage.
  • 2.5 million young adults were allowed to remain on their parents’ health-insurance plans until their 26th birthday.

Insurers, hospitals and doctors are forming alliances and adopting new procedures, preparing for a redesigned market that will debut if and when the law is fully rolled out.

As the Supreme Court considers the constitutionality of PPACA, these changes highlight an unappreciated reality: there may be no going back to the world before March 23, 2010, when President Barack Obama signed the Patient Protection and Affordable Care Act before a cheering crowd in the East Room of the White House.

Drew Altman, chief executive officer of the Kaiser Family Foundation, said it better than I’ve seen or heard anyone else put it: “There’s an old adage in politics: benefits once conferred are almost impossible to take away.” The Supreme Court’s decision is expected before July of this year.

For more about Obamacare and its origins check out my earlier post, Happy 2nd Birthday, Baby Obamacare!

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