On Thursday, the Supreme Court upheld the individual health insurance mandate, a key pillar of President Barack Obama’s health care reform law.
In a 5-4 decision, the Supreme Court ruled that beginning in 2014, Congress has the power under its taxing authority to require all Americans to have health insurance coverage or pay a tax penalty. Siding with the majority was Chief Justice John Roberts Jr.
Many called the case, which examined the constitutionality of the Patient Protection and Affordable Care Act, one of the biggest cases to reach the bench in decades. In March, the justices heard three days of oral arguments – the longest amount of time given to any case since 1966. For three months, the court’s nine justices and select members of their staff have kept their lips sealed regarding the fate of health care reform and President Obama’s signature domestic policy achievement.
The Supreme Court also ruled that the Medicaid expansion, which extends eligibility to all poor Americans younger than 65 and under 133 percent of the federal poverty level, is constitutional. If states, however, choose not to extend eligibility, the federal government cannot restrict the federal dollars the state already receives for its Medicaid program.
Around 30 million Americans are expected to gain insurance from the law. Individuals and families without access to employer coverage will be able to purchase health insurance through state exchanges, with subsidies available for low and moderate income families with incomes below 400 percent of the federal poverty level (slightly more than $75,000 for a family of three in 2012).
The law, which was signed in March 2010, also makes several reforms to the private insurance market to improve the scope and quality of coverage while reducing the cost of care. Insurance companies will no longer be able to charge higher premiums based on health status, deny coverage to those with pre-existing conditions or impose annual or lifetime limits.
Some provisions of the law have already gone into effect, while others will be implemented in 2014.
Located just three miles from the U.S. Supreme Court, George Washington University is home to a number of experts in health policy. The School of Public Health and Health Services will host a symposium examining the court’s decision on the ACA and the implications for health care and public health from 3:30 p.m. to 5 p.m. on July 11 in the Jack Morton Auditorium. Tom Daschle, a former U.S. senator from South Dakota and former U.S. Senate majority leader, will deliver a keynote address, and GW’s Sara Rosenbaum, the Harold and Jane Hirsh Professor of Health Law and Policy, will moderate a roundtable discussion with leading experts in health policy. The event is open to the public. RSVP here. The event will also be webcasted live here.
Joel Teitelbaum, an associate professor and vice chair for academic affairs in the School of Public Health and Health Services’ Department of Health Policy, helped George Washington Today analyze the court’s decision.
Q: How historic is this decision?
A: Very, for reasons related to future constitutional jurisprudence, President Obama’s legacy, and of course the health of individuals and the broader public. Passage of the Affordable Care Act was itself historic – the law is a monumental piece of social policy legislation, the importance of which will be felt by nearly everyone for years to come. In a nutshell, the Supreme court’s ruling upholding the ACA affirms what those who fought for and passed the act believed to be true all along: that Congress has formidable powers at its disposal to address pervasive public policy problems including, for example, an insurance system that effectively shuts some 50 million Americans out of the market for affordable and meaningful health insurance.
Q: The Supreme Court upheld the minimum coverage requirement, ruling that it is permissible under Congress's taxing authority. Can you explain what exactly this means?
A: The court first determined that Congress overstepped its authority in passing the minimum coverage requirement under its Commerce Clause powers, which permits federal legislators to regulate interstate commerce. However, as Chief Justice Roberts wrote in his opinion for the majority, a statute that has been found unconstitutional under one type of congressional power may be permissible under a different one. In the case of the ACA, the alternative congressional power that ultimately proved compelling for Chief Justice Roberts and the other justices in the majority was the taxing power – the basic power of Congress to require individuals to pay money into the Federal Treasury. In the end, the distinction the court majority drew was this: the minimum coverage requirement is valid not as a command to Americans to buy insurance but as a tax under the Internal Revenue Code should people choose not to purchase health insurance.
Q: Was it a surprise that Chief Justice John Roberts sided with the majority?
A: Not entirely. It was clear from his questioning during oral arguments in the case back in March that he was not necessarily wedded to a particular path or outcome, and he has shown over the past several years that his ideological streak is not always as deep as others on the court. Also, as the chief justice, he has a particular responsibility to maintain the legitimacy of the court as a public institution, and his opinion, if read between the lines, evidences a real effort to forge an outcome that rises above politics or party affiliations.
Q: Why is the minimum coverage requirement so vital to health care reform?
A: Because it is the essential piece of the political, policy and practical agreement at the heart of the Affordable Care Act. It’s the provision that allowed the revolutionary insurance reforms in the law to be both politically palatable for some members of Congress and functional on the ground given the existing insurance market. Because the ACA builds on the existing health insurance system rather than replacing it with something new, the insurance industry as currently structured could not easily absorb the ACA reforms without the minimum coverage requirement and the premiums and the more stable and healthy pool of insured individuals that result from it.
Q: Do you think this decision could be a game-changer for the election in November?
A: Hard to say. My own sense is that most people are focused on their own financial and overall well-being and that of their families, so I would expect the economy to continue being the primary gust in the political winds as the election draws closer.
Q: What was the court's decision on the Medicaid expansion?
A: The court upheld the constitutionality of the Medicaid coverage expansion, and nothing prevents states from moving forward with the expansion and receiving federal funding for it. However, the court did strike down Congress’s decision in the ACA to penalize a state that chooses not to implement the expansion with the termination of all of the state’s Medicaid funding as unconstitutional. As a result, the ruling separates the penalties that can be applied under the existing Medicaid program from that which can be applied for failure to implement the new expanded coverage group under the ACA. The Court’s ruling should be viewed as unique to the ACA Medicaid eligibility expansion and does not in any way undermine the legality of the Medicaid program.
Q: Do you think some states won't expand eligibility to 133 percent of the Federal Poverty Limit if they no longer face losing their existing Medicaid funding? And thus, how effective will the expansion be?
A: It is possible that a few states will decide on principle not to take advantage of the ACA’s Medicaid expansion as a result of the Supreme Court’s decision. But given the federal funds available to support the expansion (100 percent federal coverage in the early years, down to 90 percent in the future) and the benefits that will result for states from having more of their populations covered by health insurance, I believe that the expansion will be very successful.
Q: Now that the law is upheld, will states that have been holding off setting up health insurance exchange markets until finding out the fate of the ACA have enough time to implement them before 2014 when the law goes into effect?
A: Also hard to say – depends on how quickly they are willing to turn their attention to implementation. In the event that states elect not to set up their own exchanges or fail to do so in time, the federal government will step in and run an exchange for them, per the ACA.
Q: Republicans have said they will try to repeal the law if the Supreme Court upheld it. Do you think they have a shot of appealing it after the November elections?
A: Depends entirely on the results of the election. If President Obama wins reelection he obviously will not be signing any repeal legislation, and no data at this stage would lead a reasonable person to think that enough Republicans will be swept into Congress in November to give them majorities large enough to override a veto of any such legislation. Even if the administration changes hands, there may not be sufficient popular support to overturn the ACA given the many benefits already flowing from it to people across the country.