Affordable Care Ruling Awaits

Timothy Jost, who holds the Robert L. Willett Family Professorship of Law at the Washington and Lee University School of Law and has written extensively on health law, has been following closely the proceedings leading up to the U.S. Supreme Court hearing this month on the Affordable Care Act. We asked him to help analyze the issues at play in this case.

Interviewed by Bob Kehoe

Why did the Supreme Court agree to hear this case?

Jost: About 30 cases have been filed at the district court level challenging the Affordable Care Act. A number of those cases have made it to the Federal Court of Appeals and at least three have been decided on the merits. In one case, the minimum coverage requirement was found to be unconstitutional and in the other cases it was upheld. We can't have a situation where the statute is constitutional in one part of the country and unconstitutional in another part. This is a very important question in federal law and public policy, so it was almost inevitable that the Supreme Court would have to sort this out.

What are the key issues to be decided?

Jost: The Supreme Court has taken four questions. The first one is the constitutionality of the minimum coverage requirement. In a sense, that's really two separate questions because one argument is that it's constitutional under Congress' power to regulate interstate commerce and the other is that it is a constitutional exercise of Congress' power to tax and spend for the general welfare. The plaintiffs — 26 states and the National Federation of Independent Businesses and a couple of individuals — claim the statute is unconstitutional and not justified under either of those powers.

The second question is: If the minimum coverage requirement is unconstitutional, are there other provisions in the statute that are so closely linked to it that they should be stricken, should the entire statute be stricken or can the remainder of the statute be upheld?

The third is a jurisdictional question. The Anti-Injunction Act prohibits the federal courts from enjoining the assessment or collection of federal taxes. The Affordable Care Act is enforced through a penalty in the Internal Revenue Service code, so the question is: Does the Anti-Injunction Act prohibit the federal courts from even deciding the question of constitutionality until April 15, 2015, when a penalty is finally assessed under the tax code?

The final question is whether the Medicaid expansion under the statute is constitutional.

Do you see one of these issues as the most significant?

Jost: The most important question — and clearly the most important question to hospitals — is the Medicaid expansion question. The specific question is whether the provision of the Affordable Care Act that expands Medicaid coverage to all Americans with incomes below 138 percent of the poverty level is constitutional. The states are arguing that the statute requires states to cover that expansion population or lose all of their Medicaid funding. The states say that is coercive and effectively forces them to carry out responsibilities for the federal government, which, under our Constitution, the federal government could not directly require.

The problem with this argument is that there is no limiting principle to it. It would mean that any time a federal program imposes conditions on the states, the states could decide whether to accept those conditions and it would make the entire Medicaid program unviable. And even though Medicaid doesn't pay hospitals everything that hospitals wish it would, it still is a big part of the revenue of many hospitals, and I think this is an existential threat to Medicaid in this country.

How serious is that threat?

Jost: I have read the states' brief and there is very little law in it. It's basically an argument about the nature of our constitutional system and the relationship between the federal and state governments. The Supreme Court has never relied upon the coercion principle in deciding a case; but the Court has said a couple of times in its decisions in passing that if a condition imposed by the federal government under the spending clause is coercive, there could be a question of whether that provision is constitutional.

A number of lower-court decisions have considered challenges, several under the Medicaid program, based on this principle. Some of the lower courts have said that the coercion principle isn't actually law, it's sort of musings of the Supreme Court. Other courts have said it may be the law, but it doesn't apply. No court has ever struck down a federal statute based on the coercion theory. Both the district court and the court of appeals rejected the theory in this case, so it's a bit puzzling that the Supreme Court decided to hear this case. But the fact that it decided to hear it means that at least four justices think it's worth arguing about.

How will the process work when the case is heard?

Jost: The case is being briefed now [mid-January] and the first and second rounds of briefs have already been submitted. Briefs will continue to be submitted until the beginning of March. The American Hospital Association [with others] already has submitted two briefs, one on the question of severability and one on the question of the minimum coverage requirement. [The AHA and five other groups also filed an amicus brief urging the court to uphold the ACA's expansion of the Medicaid program. For more, visit www.aha.org/advocacy-issues/legal/legal-amicus-briefs.shtml.] Then, over three days at the end of March, the Supreme Court is going to hear about 5 1/2 hours of oral argument; it is unprecedented in modern times for them to spend that much time and that many days on a case. Then, the justices will take the case under advisement. Usually, major cases aren't decided until the end of June.

Is the ruling likely to clarify the ACA's future?

Jost: Yes, if, as I suspect, the Supreme Court holds everything to be constitutional. That should put to rest the argument that the statute is unconstitutional. On the other hand, if they hold that one provision of the statute is constitutional, but that the rest of the statute is not, that will leave things very unclear as to exactly how the statute is supposed to be implemented.

If the justices strike down the minimum coverage requirement, but leave the rest of the statute in place, then there is a real question as to how that is going to work.

Frankly, though, I think the election in November is going to be a much greater challenge to the Affordable Care Act than the Supreme Court case.