Pesky Laws

Lawsuit.jpgAs Mark Twain was quoted as saying, “Rumors of my death have been greatly exaggerated.” So too have rumors of the death of the Affordable Care Act, or the ACA. For those unaware (and don’t feel bad.. there are lots of people who have no idea) what the ACA is and does, it is the healthcare reform law that was passed earlier this year.

If you listen to conservatives in the 26 states that are suing to have the law overturned on Constitutional grounds, the law is an unconstitutional encroachment on the civil liberties of Americans.

If you listen to the 32 million previously un-insured citizens that this law will help cover by the time it it fully implemented in 2014, it is one of the most important pieces of legislation passed in the past 100 years.  It is also the same law that prevents insurers from not covering your pre-existing condition right now.

Yea, that law.

The rub, to conservatives, is that beginning in 2014, the ACA requires that nearly all U.S. citizens either purchase health insurance or pay a penalty.  Opponents of the law argue that the decision not to purchase health insurance violates the Constitution. In its deliberations, Congress expressly found that the ACA’s requirement that insurers may not deny coverage or charge more to individuals with pre-existing medical conditions could not function effectively without the minimum coverage requirement.

So far, five District Court decisions have been appealed to various U.S. Courts of Appeals.

The states and NFIB won their challenge in the 11th Circuit last month, leaving the Obama Administration with two options: file for a full review, or en banc, of the case (this means that most or all of the 11th Circuit judges review the ruling) or appeal directly to the Supreme Court. In the end, DOJ decided to bypass the en banc process. Alternatively, the full review request would have stalled the momentum toward the Supreme Court and potentially moved any court hearing into a post-election environment.

The high court would have a menu of options for resolving a case. A majority could uphold the law, strike down only the mandate or void other parts of the measure as well. The justices could also adopt the approach taken by one of the appeals courts and conclude that judges shouldn’t review the law until 2015, when the first penalties are assessed.

Both the administration and challengers have said in court papers that a decision striking down the mandate would require the invalidation of provisions that make more people eligible for insurance, including the pre-existing condition rule. However, the Supreme Court wouldn’t necessarily have to follow that course. In declaring the mandate unconstitutional, the 11th U.S. Circuit Court of Appeals left the rest of the law intact, including the pre-existing condition rule.

Such an outcome would be a blow to the insurance industry, which is counting on the mandate to ensure the participation of young, healthy subscribers who can offset the costs imposed by other parts of the law.

“The grave constitutional questions surrounding the ACA and its novel exercises of federal power will not subside until this Court resolves them,” the state attorneys general said in their petition. “Time is of the essence. States need to know whether they must adapt their policies to deal with the brave new world ushered in by the ACA.”

Whatever the outcome, we have some time before we have any certainty on the future of the ACA. “Facts are stubborn, but statistics are more pliable,” said Mark Twain. We’ll wait to see what SCOTUS has to say before we call the ACA dead and gone.