Court's Verdict on Health-Care Reform Holds Surprises, Legal Experts Say

THURSDAY June 28, 2012 -- After the U.S. Supreme Court's announcement Thursday that it would uphold most of the 2010 Affordable Care Act, many legal experts were quick to register their surprise at the decision -- and their sense that perhaps the battle over health-care reform was not yet finished.

The complicated 5-to-4 decision allows the law to proceed with its goal of covering more than 30 million uninsured Americans. That includes the controversial "individual mandate" provision, which requires most consumers to buy health care insurance or face a penalty. The court held that the mandate fell under the category of a tax, and as such was constitutional and could stand.

That came as a surprise to Stephen Presser, a professor of legal history at Northwestern University School of Law in Chicago. He had predicted that the Supreme Court would find the health-reform law unconstitutional and the whole package would go down.

"I had thought that the issue of whether [the individual mandate] was a tax was over and done with," Presser said. "This strikes me as a disappointing decision, which fails fully to preserve the limitations on the Constitution of the federal government," he added.

"It's disappointing that all the proponents of the Act had steadfastly said that this was not a tax. That this was not a bill to raise revenues, that this was not a bill to increase health care costs. Had it acknowledged that it was in fact a tax, it's much more doubtful that it would have passed, given the thin margin that it did pass by, it may have made a difference. So what the court has done is salvaged the Act in a Constitutional sleight of hand," Presser said.

But Renee Landers, a professor of law at Suffolk University Law School, had betted on the other side -- that the mandate could still survive -- and today's decision justified her confidence.

"It was hard to stay with that opinion the last few weeks though because everybody was so busy hedging their bets," she said. She was somewhat surprised at one of the four dissenters: "I thought [Justice Anthony] Kennedy would go over for it, but he didn't."

However, she wasn't surprised that Chief Justice John Roberts backed the majority decision.

"I think at the end that Roberts was motivated by that overturning an act of Congress is a really significant action by the court even though not [entirely] unprecedented, and if at all possible the court should work to uphold the Constitution," Landers said.

The decision did limit the expansion of Medicaid as proposed under the law.

"What they said was that the part of the expansion that would penalize states -- that would withdraw all Medicaid funding from the states if they didn't go along with the expansion -- is invalid," Landers explained. "The expansion still exists, but a state can either sign onto it or not and won't lose all its current Medicaid funding if it doesn't go along with the expansion."

While some states are already expanding their Medicaid roles and others are happy to cooperate because of the federal funding they'll receive, she said, "there are always those states who are very parsimonious -- not generous -- in granting Medicaid benefits to adults. So basically, this decision will have the effect of limiting the impact of the law in getting more adults insurance coverage."

Another expert, Robert Field, a professor of law in the department of health management and policy at Drexel University's School of Public Health, weighed in and found that each side may have gained from the decision.

"I do think this is potentially a win for both sides, although the losers in the case may not immediately see it this way," Field added. "I think [President Barack] Obama wins politically. He gets around the charge that [Republican Mitt] Romney had been making that he wasted all his political capital on something that was unconstitutional."

And for conservatives, "there is no new precedent that expands Congress' power" when it comes to the Medicaid provision, Field added.

"[The Justices are] saying that Congress can expand Medicaid and can offer states a carrot to expand it, but they cannot follow the carrot with a stick that would take away their entire Medicaid programs if they don't agree to the expansion," Field explained. "The carrot is the 90 percent to 100 percent of the expansion that Congress will pay. However, the law had said that if the states don't go along with that they could lose funding for their entire Medicaid program. Now that wouldn't happen. The worse that would happen to them is their programs will stay as they are."

Gregory Magarian, a professor at Washington University School of Law in St. Louis, believed that the entire law would pass by a narrow margin, but on a different basis.

"The result is what I was expecting on the mandate, but the way they got to it is not at all what I was expecting," Magarian said. "It sounds to me that the court was trying to be as cautious as it could in wading into the constitutional issues. What it found was the narrowest way to uphold the mandate and therefore uphold the rest of the Act. I think the result is the right result under my best understanding of the law so I'm very happy with what the court did. But it really is a curveball in terms of how they got there."

So, is this the end of the battle over health care reform? Probably not: the fight may simply switch venues, the experts said.

Today's decision by the Supreme Court settled the constitutionality of the Affordable Care Act, and now "Congress is free to change the provisions of the statute that the Court has said is constitutional," according to Landers.

"Congress could repeal the statute, revise the statute, or reduce, or decline to appropriate funds for the various programs the Act contemplates," Landers explained. "So now, a great deal rides on the November election -- control of the House and Senate and/or the outcome of the presidential election."

Presser added that, for now, however, "whatever else you want to say about the opinion, it creates a situation where the court steps aside. Roberts is the chief justice and he thinks about institutional issues and it's not surprising that he may have wanted to avoid a political firestorm. What is surprising is how he did it."

Landers said that whatever happens next politically, "in the meantime, I think that states have to move forward in implementation because they have some deadlines in January 2013, like taking steps to create their own [health insurance] exchanges that they have to meet, and you can't do that kind of thing overnight."

More information

Visit the U.S. Supreme Court site for the official Affordable Care Act ruling.

Posted: June 2012


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