Supreme Court to Review Health Reform Law: 5 Things to Watch

BY Marcia Coyle  November 14, 2011 at 10:43 AM EST

Updated, Nov. 14
The Supreme Court announced Monday that it will review the constitutionality of the health reform law on four key points.

Original Post, Nov. 10
The Supreme Court now has six petitions asking the justices to review and answer important constitutional questions about the Obama administration’s signature social policy success — the Patient Protection and Affordable Care Act.

The justices take a look at those health care petitions for the first time during a conference Thursday in which they consider a host of other petitions as well filed by individuals and businesses during the last few months. If the Court, as expected, agrees to answer some of the questions raised about the health care law, that decision will be the blockbuster ruling of the term — and a signature decision of the Roberts Court itself.

Here are the key questions raised by the challengers to the law and the likelihood of the justices agreeing to answer them:

The Individual Mandate

el.jpgAt the core of the controversy over the health care act is the law’s requirement that individuals purchase minimum health insurance coverage if they can afford it. The minimum essential coverage provision has become known as the individual mandate, and the law imposes a penalty, paid on the individual’s tax return, for failure to buy insurance. The justices have been asked whether that mandate was a valid exercise of Congress’ power to regulate interstate commerce under the Constitution’s commerce clause, or in conjunction with the necessary and proper clause, or through Congress’ taxing power.

Examining a ‘Tax’ Before it Takes Effect

vl.jpgThere is a law, known as the Anti-Injunction Act, which prevents federal courts from hearing pre-enforcement challenges to the imposition of federal taxes. The theory behind that law is that the government would never be able to collect tax revenues if it were constantly going to court to defend against taxpayer challenges. Instead, taxpayers may challenge a tax after it has taken effect and seek refunds. Because the health care law imposes a penalty, payable through our tax returns, on those who don’t buy minimum insurance, the justices have been asked whether the Anti-Injunction Act prevents them from examining the health care law’s constitutionality before the tax penalty is effective in 2015.

Severing the Individual Mandate

vl.jpgIf the Court decides that the individual mandate is unconstitutional, the justices have been asked whether that provision can be severed from the law and the rest of the law remain effective. This question is very important because many supporters of the health law believe the individual mandate is essential to the overall effectiveness of the law and to health insurers’ willingness and ability to cover pre-existing health conditions and to keep rates affordable.

Medicaid Expansion

ul.jpgThe health care law expands Medicaid — a state-federal health program for low-income individuals and families. The justices have been asked whether this expansion unconstitutionally “coerces” or “commandeers” the states into participation because state receipt of a huge amount of federal funds is conditioned on their participation.

Employer Penalty

ul.jpgWhile the health law does not require employers to offer health coverage to employees, the law, effective in 2014, assesses a fee on employers with more than 50 full-time employees (generally employees working at least 30 hours/week) if they don’t offer “minimum essential coverage” and at least one full-time employee qualifies for a federal premium credit or cost-sharing reduction. The annual penalty amount is generally $750 per full-time employee. The justices are asked whether the employer provision is unconstitutional as applied to state governments and as applied to private employers.

Both supporters and opponents of the health law believe they have a good shot at winning in the Supreme Court. But this is a new Court in the sense that four new justices have joined since 2005, and these justices have not yet had much experience with reviewing the key question in all of the health petitions: the extent of Congress’ lawmaking power under the Constitution’s commerce clause. Four federal appellate courts have now weighed in on the constitutionality of the individual mandate; only one of the four has ruled that the mandate was unconstitutional.

A decision on the health care law — which probably would come sometime in June if review is granted — would not only answer the controversy swirling around the new law, but would be especially revealing of the Supreme Court headed by Chief Justice John Roberts Jr.

Marcia Coyle of the National Law Journal is a regular NewsHour Supreme Court analyst.