Health Care Reform Status
Contained within the Amherst Chamber's 2012 Legislative Agenda was the organization's position on Health Insurance Exchanges - one component of the Patient Protection and Affordable Care Act. Recently there has been a lot of activity regarding the validity of the entire Patient Protection Act. Four arguments we brought before the Court: the Anti-Injunction Act; the Individual Mandate; Severability; and Medicaid Expansion. Below is a brief summary of each of the arguments.
The Anti-Injunction Act
The Anti-Injunction Act bars a court from hearing a challenge to a tax until the tax is assessed. The individual mandate provision of the PPACA is enforced with a penalty, so the question before the Court is whether the penalty should be considered a tax for the purposes of the Anti-Injunction Act.
Since both the government and the plaintiffs agree that the Anti-Injunction Act should not stop the Supreme Court from deciding the constitutional questions now, the Court assigned a 'friend of the court' to argue that the Anti-Injunction Act bars the lawsuit until the penalty associated with the individual mandate is collected with 2014 income taxes.
The Individual Mandate
The constitutionality of the PPACA requirements for most individuals to either maintain insurance coverage or pay a penalty is under question. Solicitor General Donal Verrilli presented arguments defending PPACA. Paul Clement, representing 26 states suing the US Government over the constitutionality of the Act, and Michael Carvin, representing the NFIB and individual plaintiffs, argued that the individual mandate upends the principle of limited and enumerated federal powers.
Mr. Verrilli argued that the individual mandate is authorized by Congress's Commerce Clause, the Necessary and Proper Clause and the Taxing power. He also argued that Congress has the undisputed power to require guaranteed issue and community rating, and to ban discrimination based on pre-existing conditions, thus making the individual mandate necessary to execute those market reforms.
Mr. Clement and Mr. Carvin argued that if the mandate is permissible under the Commerce Clause, Congress could regulate all human activity because it will have some effect on interstate commerce. Additionally, they argued against the idea that Congress was merely regulating the timing of the payment for health care. The point of the mandate is to compel the purchase of insurance by the healthy so that the risk pool is balanced and affordable.
The issue of severability deals with the question that if the minimum coverage provision is found unconstitutional, which other provisions, if any, should be invalidated?
Paul Clement argued that the entire Act should be invalidated if the minimum coverage provision was found to be unconstitutional, based on a theory that the minimum coverage provision was linked with the guarantee issue provision, community rating provision, Health Insurance Exchanges and other provisions like subsidies that Congress would have intended for the entire Act.
Edwin Kneedler argued on behalf of the government that the minimum coverage provision was textually liked to guarantee issue and community rating, but not to other provisions which could all operate independently. H. Bartow Farr, III was appointed by the Court to argue that the minimum coverage provision was one of many tools, including rich subsidies and annual open enrollment periods, used by Congress to encourage participation in the market.
Arguments concerning Medicaid expansion focused on the states' expansion of Medicaid up to 133% of the Federal Poverty Level and whether this expansion of Medicaid improperly coerces states through the use of the spending power due to the fact that the Medicaid statute forces states to make an all or nothing commitment to the program.
Clement once again argued for the states in that they have no choice but to
accept the Medicaid expansion because they can't afford to have their entire
participation in the Medicaid program put at risk. Donald Verrilli continued to
argue on behalf of the
A ruling by the Supreme Court on the above issues is expected in June. For more detailed information, the American Bar Association has issued a publication summarizing the issues and polling experts on their predictions to how the Court will rule.
On April 12, 2012 New York State Governor Andrew Cuomo issued an Executive Order to establish a statewide Health Insurance Exchange. The Exchange will be entirely financed by the federal government and will significantly reduce the cost of coverage for individuals, small businesses and local governments.
The Executive Order allows for regional advisory committees consisting of consumer advocates, small business consumer representatives, health care providers, agents, brokers, insurers, labor organizations and other appropriate stakeholders to make recommendations on how the Exchanges should be created and operated. Once established, the Exchange would allow residents to obtain health coverage and that small businesses and individuals receive tax credits and cost sharing reductions.
Given the uncertainty of the Patient Protection and Affordable Care Act at the Federal Level due to the recent Supreme Court Hearings, the establishment of a state Health Exchange could be a moot point. To make predictions or determinations on the outcome of federal healthcare legislation is certainly premature at this point. If any one of the arguments heard by the Court is proven to be unconstitutional, it could create a domino effect for the other components of the PPACA.
The Chamber continues to be committed to keeping our members informed of all the moving parts of the PPACA. We will update you throughout the year as more information is decided. Look for our next quarterly update in July where more information on the decision of the Supreme Court in June will be included.