Affordable Health Care Ruling: Reason for Joy/Reason for Sadness

A shout of joy. A sigh of relief. A bit of puzzlement. A sense of disappointment. These are all feelings that those who hoped that the Supreme Court would uphold the Affordable Care Act most likely experienced upon hearing of the Supreme Court decision issued on Thursday, June 28, which upheld in part and rejected in part President Obama’s historic health care legislation.

In its 5-4 majority opinion, the Court upheld most of the Affordable Care Act. Most noteworthy, the Court upheld the provision of the Act known popularly as the individual mandate, which requires most Americans to obtain health insurance or pay a penalty for failing to do so. For this, we should all be grateful for it is a first although incomplete step towards ensuring universal health care for all Americans.

Unfortunately, the Court also limited the law’s expansion of Medicaid, the joint state- federal program that provides health care to poor and disabled families and individuals. In rejecting the Act’s expansion of Medicaid, the Court left the biggest obstacle to obtaining health care on those who are the poorest and neediest in our society.

Although the Court in theory upheld the Act’s expansion of Medicaid, it limited the power of the federal government to secure compliance by individual states. The Court found that the federal government could not compel states to comply by threatening to cut off all money they received for existing Medicaid programs. Even though the federal government will pay the full cost of those newly eligible for Medicaid coverage for the years from 2014 to 2016 and then gradually decline its share of the cost to 90 percent in 2020, the Chief Justice in his opinion stated that attempting to compel states to agree to this largely federally-funded expansion was the equivalent of putting “a gun to the head” of states by requiring them to expand Medicaid or risk losing all federal Medicaid funding.

In reality, what the Court did was say that health care reform was an acceptable government action, except for the provision that addressed those most in need. Medicaid rules are already infamously difficult and complicated. The new law will simplify eligibility and its complete expansion would have meant that in most cases people under the age of 65 would be able to obtain Medicaid if their income was less than or equal to 133 percent of the federal poverty level, which is presently set at up to $25,390 for a family of three.

The Court’s decision limiting the federal government’s power to influence states to join in the Medicaid expansion will leave states that choose not to expand Medicaid in an unprecedented position. People living in those states with incomes of 133 percent to 400 percent may obtain, under the new law, federal subsidies to purchase private insurance through insurance exchanges, while many people with incomes below that level will not be able to obtain insurance. Once again, it is the poorest who will suffer the most. Undoubtedly, states with serious budget difficulties will choose to opt out of the Medicaid expansion, in one of the many ways that budgets will be attempted to be balanced on the backs of the neediest among us.

Congressional Budget Office (CBO) statistics indicate that without the health care law, 32 million Americans under the age of 65 would be covered by insurance provided by Medicaid and the Children’s Health Insurance Program (CHIP) in 2022. CBO calculated that the expected effect of the Medicaid Expansion Provision of the Act would increase the number of Americans covered by Medicaid and CHIP to 49 million by 2022. This predicted 17 million increase will almost certainly fail to be realized because of the Court’s ill-advised decision.

Before dealing with another major problem related to the Court’s decision, let us note some of the very positive aspects of the Court’s upholding the majority of the Affordable Care Act. According to CBO statistics, there are presently 53 million Americans under the age of 65 without health insurance. The anticipated effect of the Act, according to CBO statistics, will reduce that number to 27 million by 2022. The Act has already put in place some very positive health care reforms. It has made prescription drugs more affordable for seniors, lifted lifetime caps on benefits, prevented the denial of coverage to children because of preexisting conditions, allowed young adults to remain on their parents’ plans until the age of 26, and provided for free preventive care. In 2014, the Act will make it illegal to discriminate against anyone with a preexisting condition; it will remove annual limits on the dollar value of coverage; and it will increase Medicaid coverage for childless adults, children, pregnant women and parents with incomes up to 133 percent of the poverty level and provide enhanced federal matching funds. It will also require most U.S. citizens and legal residents to obtain health insurance or face a penalty.

Let us be grateful for these positive, hopefully first, steps towards real and complete health care reform.

There is potentially an even bigger problem with the Court’s decision than the limit on the federal government’s ability to induce states to expand Medicaid coverage. The Supreme Court decision upheld the Affordable Care Act based on the federal government’s constitutional power of taxation. It rejected the Administration’s position that the Act was justified by Congress’s power to regulate interstate commerce through the Commerce Clause of the Constitution.

This presents a very dangerous precedent. Noting the Court’s finding that the Act could not be sustained under the Commerce Clause, Akhil Reed Amar, a Yale law professor, is quoted in The New York Times as stating that is was “important to look at the dark cloud behind the silver lining.” Referring to the new limits the Court seemed to be placing on regulating commerce, Professor Amar remarked, “Federal power has more restrictions on it. Going forward, there may even be laws on the books that have to be re-examined.” In an op-ed piece in the same issue of The New York Times, Neal K. Katyal, a law professor at Georgetown, stated that “the health case decision also contains the seeds for potential restructuring of federal-state relations.” Professor Katyal stated, “The government told the court that longstanding laws, like the Elementary and Secondary Education Act of 1965 and the Family Education Rights and Privacy Act of 1974, contain clauses that condition money on state performance of certain activities.” Professor Katyal also noted that “The decision leaves open the question of whether those acts, and many others (like the Clean Air Act), are now unconstitutional as well.”

There can be little doubt that the liberal wing of the Court is well aware of the potentially dangerous precedent that Chief Justice Roberts’ opinion presents, but may well have gone along with the reasoning to save the Affordable Care Act. In fact, Justice Ginsberg, in a concurring opinion, while agreeing “that the minimum coverage provision is a proper exercise of Congress’ taxing power,” specifically states that “I would hold, alternatively, that the Commerce Clause authorizes Congress to enact the minimum coverage provision. I would also hold that the Spending Clause permits the Medicaid expansion exactly as Congress enacted it.”

Chief Justice Roberts’ majority opinion for the Court may be an example of winning the battle, but losing the war.

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