Countdown To The Supreme Court's Ruling On Health Care

Jun 24, 2012
Originally published on June 28, 2012 6:46 am

Anticipation has reached a fever pitch, and the waiting is almost over.

This week, the Supreme Court is almost certain to issue its decision on the constitutionality of President Obama's health care law. The decision could have far-reaching implications for the legal landscape, the nation's health care system and even the Supreme Court's legacy.

The court will have to answer four distinct legal questions raised by the challenge to the Affordable Care Act. The threshold question is whether the court may decide the case now, or whether it must wait until 2015, when all of its provisions — including the individual mandate — have gone into effect.

At oral argument in March, the justices seemed uniformly inclined to decide the case now.

The second question for the court is the one most politicians and political pundits have focused on exclusively: Is the provision requiring virtually all Americans to have health insurance constitutional?

The court will have to determine whether Congress exceeded its powers to regulate commerce by creating a mandate that would force most Americans who aren't otherwise insured to buy coverage,

Third is the question of the law's expansion of Medicaid, which adds 17 million more people to the rolls. The states challenging the overhaul law have argued that even though the federal government will pay almost all of the cost, it is still impermissibly coercive.

Finally, the court will decide whether, if any part of the law is unconstitutional, it can be separated out, or whether the entire law has to be invalidated.

How the court will settle these various legal questions is only the first uncertainty. The entire health care system, including insurance companies, is anxiously awaiting a decision that is almost certain to have fundamental ramifications for their business.

Indeed, the only way the court's ruling would have no effect on the health care system would be if the law were upheld in its entirety.

Even striking down just a small piece could have numerous consequences --both intended and unintended.

Many provisions of the law are extremely popular, such as a ban on insurers denying coverage because of pre-existing conditions and the rule, already in place, that allows adult children to remain on their parents' insurance plans until age 26. If the law is struck down,therewill be enormous pressure to keep those provisions in place.

The problem is that without the mandate, insurance companies say they could not afford to accept all comers, especially those with previous medical conditions. As for including adult children on parents' policies, that too could be problematic, for different reasons.

True, some of the biggest insurance companies have vowed to keep this provision in place, but if the court invalidates the law, those additional benefits might be taxable. The law waived a key tax provision to ensure that health insurance benefits are not taxed as income. But without the law, parents may have to pay income taxes on those benefits and employers could face higher payroll taxes.

This scenario would cause "utter confusion" for employers, explained James Klein, president of the American Benefits Council, which represents large-employer health plans and companies that provide services to those plans.

"Because after all, there would be some 24-year-old kids who are legal dependents, for whom there would be no income tax owed. And then there would be others for whom they're not legal dependents and so there would be tax that would be owed," he said. "It would be extraordinarily confusing."

The decision could also have a big impact on the court's legacy. If it strikes down the mandate as exceeding Congress' powers under the Constitution, this would be the first time since the New Deal that the court has invalidated a major piece of regulatory legislation.

Already, the case has exposed a major shift in conservative legal thinking. For the last half-century, conservatives, and particularly congressional Republicans, have championed the idea of judicial restraint, arguing that the courts should usually defer to the elected branches. But now, conservatives are explicitly calling for judicial activism. Conservative columnist George Will, for example, wrote this week that "judicial deference to elected representatives can be dereliction of judicial duty."

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Transcript

DAVID GREENE, HOST:

This is WEEKEND EDITION from NPR News. I'm David Greene, in for Rachel Martin.

After months of anticipation, this week the Supreme Court is finally expected to issue its decision on the constitutionality of President Obama's health care law. This is what everyone has been waiting for since the case was argued back in March.

For those of you who might have forgotten what the actual issues are, we've invited our NPR brain trust on this, legal affairs correspondent Nina Totenberg and health policy correspondent Julie Rovner, to join us for a bit of a refresher. Thank you both for coming in.

NINA TOTENBERG, BYLINE: Good morning.

JULIE ROVNER, BYLINE: Our pleasure.

GREENE: Nina, let's start with you. as we get ready for this decision, remind us what the legal questions are that the Court is really grappling with.

TOTENBERG: OK, here's the four-point quick and dirty. First, there's the threshold question: Can you the Court can decide this now or does it have to wait until the whole thing goes into effect. And it was pretty clear at the oral arguments that they think they can cite it now.

Second, is the mandate requiring virtually all Americans to have health insurance. Is the mandate constitutional?

Third, is the expansion of Medicaid constitutional? The states have challenged the expansion, saying it's coercive even though the Feds pay for most of the bill. And finally, the Court will tell us if any of these parts is unconstitutional, can it be separated from the rest of the law, or does the whole thing have to be struck down?

GREENE: So, a lot of options for the Court. And, Julie Rovner, we've been talking about how this decision really could have a major impact on the nation's health care system?

ROVNER: Absolutely, it could. About the only thing that wouldn't have much of an impact is if the Court upholds the law in its entirety. Even striking down just a small piece could have lots of consequences; some intended, some perhaps unintended. There's this perception that most of the law hasn't taken effect yet and that's true. But even just striking down the mandate, which of course has not taken effect yet, and portions of the law that go with that mandate could prove disruptive to people's current coverage.

GREENE: But, Julie, let's clear something up. I mean, isn't it possible that some pieces of the law that have gone into effect already are going to stay if the Court strikes this down?

ROVNER: Well, yes. I mean, for example, some of the big insurance companies said that they liked to keep the coverage for young people under age 26 who are allowed to stay on their parents' health plans. But it turns out, even that's not so simple. The law waived a key tax policy, so those parents of those young adults could end up owing both income and payroll taxes on the value of that coverage. And their employers would face a huge mess trying to figure out who owes what.

You know, everyone hates the fact that this was a 2,700 page piece of legislation. But that's because health care is complicated, and it's hard to take pieces out of what really was envisioned as a whole.

TOTENBERG: You know, David, I really didn't know what was in this bill before it got to the Supreme Court. And I was struck by what a complete and interwoven overhaul of the health delivery system it is. You can like or dislike parts of it, but it truly is an attempt to make the system more rational.

GREENE: The Court might say you can separate it, but actually separating it could be an incredibly complicated thing to do.

(LAUGHTER)

TOTENBERG: Yeah.

GREENE: Nina, is this one of those big decisions that could really define a Court and its reputation?

TOTENBERG: Well, in short run and the longer run are two different questions, and I'm not quite sure how it shakes out. If the Court strikes down the mandate, for instance, it would be the first time in three-quarters of a century that the Court would have struck down a major piece of regulatory legislation.

And you know, for the last half century or so, the battle cry of conservative has been judicial restraint and criticism of judicial activism, meaning essentially that the Court should defer more to the elected branches. And now, suddenly, we're seeing conservatives calling for activism - and they're calling for it overtly. Conservative columnist George Will, for instance, has recently embraced the notion of judicial activism as the ideal.

So, where we are going to perceive this Court in the long run is very unclear to me.

GREENE: Julie, how will this be perceived on the campaign trail? I mean, President Obama, Mitt Romney already talking about health care a lot. I mean, could this change the conversation in a big way?

ROVNER: You know, there's been a ton of speculation on this. There's one camp that says that the president will be helped if the mandate, particularly, is struck down - that's the least popular part of this law. And, of course, the rest of it is relatively popular. On the other hand, this was the president's signature domestic achievement, and I think it never looks good to have a piece of your major accomplishment summarily canceled.

Just late last week, House speaker Boehner put out a memo telling his troops that, should the Court strike down all or part of the law, that there will be no spiking of the ball. Because basically that would be win for them. So I think we will see Republicans, if not gloating, at least celebrating if any part of this law is struck down.

But how it will ultimately play out at the polls, I think it's pretty soon to tell.

TOTENBERG: In fact, Senate candidate Richard Mourdock in Indiana, who beat Richard Lugar, he cut three different ads celebrating the Court striking down the decision. They were to be released depending on which variations on a theme happened, but somehow they got leaked. And now they're all over YouTube.

(LAUGHTER)

GREENE: Wow. Oh, so then, we now politicians are getting ready to talk about this one way or the other.

Well, Nina, when do we expect this decision. I mean it's not the only case that the Court still has left to decide on.

TOTENBERG: Oh no, there is more, much more. There's the constitutional test of the Arizona Show Me Your Papers law. There's a constitutional challenge to sentencing juveniles 14 and younger to prison for life without parole when they commit murder. And there's a constitutional challenge to the federal law making it a crime to lie about having received a military medal.

I really do, David, expect the Court to have all this decided by the end of the week. But I'm reminded of the time many years ago when I asked the late great Justice Lewis Powell if I was safe booking a plane flight to go home July 4th to visit my folks. And he said, oh, I would be fine. And at about this time, the phone on my desk rang and I picked it up. And this voice said, Nina, this is Lewis Powell, I'm afraid that I misled you.

GREENE: Wow.

(LAUGHTER)

GREENE: You might not be booking plane tickets this week either.

TOTENBERG: Well, the justices have plans to leave town at the end of the week. So we probably are safe saying it's this week.

GREENE: NPR's legal correspondent Nina Totenberg and health policy correspondent Julie Rovner, thank you both for coming in.

ROVNER: You're welcome.

TOTENBERG: Our pleasure. Transcript provided by NPR, Copyright NPR.