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On January 6, 2012, the U.S. Department of Justice (DOJ) filed a brief with the U.S. Supreme Court in support of the Patient Protection and Affordable Care Act (PPACA), one of the most talked about pieces of legislation passed in recent memory. In addition, over a half dozen amicus curiae briefs have been filed since then by interested parties wanting to weigh in on the case. Oral arguments on the merits of the new health care reform law are scheduled for late March.
Topping the list of contentious issues is the debate about whether Congress can require American consumers to obtain health care insurance, or else pay a fine. In the 130-page brief backing the Affordable Care Act, the DOJ argued that enactment of the “individual mandate” provision is constitutional. While lower courts are split on this issue, DOJ defends the mandate in the brief as a legitimate solution to the need to improve the U.S. health care system.
Pursuant to the Commerce Clause, the government asserts that “The minimum coverage provision is within Congress’s power to enact not only because it is a necessary component of a broader scheme of interstate economic regulation, but also because, within that scheme, the provision itself regulates economic conduct with a substantial effect on interstate commerce.”
This argument is based upon the notion that when individuals do not purchase health insurance, but then seek care through the health care system, they are shifting the costs of that care to other insured individuals who are forced to pay higher premiums. By requiring individuals to purchase insurance or pay a fine, PPACA shifts the risk back to the individual. As the DOJ asserts in the brief, “This is classic economic regulation of economic conduct.”
DOJ further defends the constitutionality of PPACA as a valid use of congressional taxing power. Specifically, the argument that the consequence of failing to obtain, and maintain insurance, is an increased tax liability.
Clearly, both proponents and opponents of this issue raise powerful arguments in defense of their positions. A system in which everyone has health insurance would be beneficial to all in the form of lower premiums, and perhaps higher quality care, but what price in far higher deficits and taxes are we as Americans willing to pay? The original defense that the “Affordable” Care Act would save money is no longer operative. But that being said, legal precedents exist to support either side of this argument.
Perhaps the strongest argument against PPACA is the “slippery slope” argument – if Congress is allowed to require persons to purchase health insurance or pay a fine, will Congress be assuming the authority to require Americans to do other things as mundane as purchase broccoli or as controversial as purchase a firearm. Rejecting this argument, the DOJ brief highlights the Supreme Court’s practice of finding a substantial effect on interstate commerce to justify Congressional regulation. Solicitor General Donald B. Verrilli, Jr. argues that PPACA is “a policy choice the Constitution entrusts the democratically accountable branches to make, and the court should respect it.”
This DOJ brief is one of several that will be made in the near future on the PPACA constitutional issues under Supreme Court review. Other future court filings will address the applicability of the Anti-Injunction Act which prohibits suits against taxation acts until the tax is effective, the issue of the ability of the U.S. Government to unilaterally require states to increase their Medicaid programs, and the issue of the missing “severability clause” which may or may not render the entire act unconstitutional if any provision of the act is declared unconstitutional.
If you would like to read more on the subject of legal challenges to the PPACA, please go here. We will continue to bring issues of great importance to our Broker community to your attention. Past BenefitMall blogs and Legislative Alerts referencing PPACA and the U.S. Supreme Court can be found here.
Please visit www.benefitmall.com to view past Legislative Alerts. Or, you may visit www.HealthcareExchange.com for blog posts, polls, surveys and numerous resources.
The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.
Vice President of Government and Carrier Relations
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