On to the ap­peals

Four ACA chal­lenges make their way to next level

Modern Healthcare - - The Week In Healthcare - Joe Carl­son

hen three fed­eral judges for the 4th U.S. Cir­cuit Court of Ap­peals hear ar­gu­ments this week on the Pa­tient Pro­tec­tion and Affordable Care Act, they’re likely to hear from both sides in the case that the trial court got the case wrong.

De­fend­ers of the re­form law say U.S. District Judge Henry Hud­son should not have struck out the ACA’s re­quire­ment that nearly all Amer­i­cans buy health in­surance by 2014 be­cause Congress does have con­sti­tu­tional au­thor­ity to im­pose the “in­di­vid­ual man­date” through its power to reg­u­late in­ter­state com­merce. Op­po­nents of the law, mean­while, say Hud­son didn’t go far enough. Rather than sev­er­ing the in­di­vid­ual man­date and let­ting the re­main­der stand, the judge should have struck down the law in its en­tirety be­cause Congress didn’t in­tend the law to func­tion with­out the man­date.

“Be­cause it is clear that Congress would not have passed PPACA at all with­out the man­date and the penalty, the district court’s rul­ing was er­ro­neous,” the at­tor­neys for the state of Vir­ginia wrote in their brief to the 4th Cir­cuit.

Two Vir­ginia cases, reach­ing op­po­site con­clu­sions about the law’s le­gal­ity, are sched­uled for sep­a­rate oral ar­gu­ments be­fore three-judge pan­els May 10 at the fed­eral court­house in Rich­mond, Va. The cases are Vir­ginia v. Se­be­lius, in which Hud­son struck down the in­di­vid­ual man­date, and Lib­erty Univer­sity v. Gei­th­ner, in which U.S. District Judge Nor­man Moon up­held the law in its en­tirety.

In all, four cases in which judges di­rectly ruled on the law’s con­sti­tu­tion­al­ity are sched­uled for oral ar­gu­ments in cir­cuit courts within a month’s time. In ad­di­tion to the Vir­ginia cases, the 6th U.S. Cir­cuit Court of Ap­peals in Cincin­nati is sched­uled on June 1 to hear ar­gu­ments in Thomas More Law Cen­ter v. Obama, which up­held the law, and the 11th Cir­cuit in Atlanta is sched­uled on June 7 to do the same with Florida v. HHS, which struck down the ACA in its en­tirety.

All four cases were filed in district courts March 23, 2010—the same day Pres­i­dent Barack Obama signed the Affordable Care Act into law—and all four have been placed on ex­pe­dited sched­ules in the ap­peals courts.

The U.S. Jus­tice Depart­ment has been track­ing a much wider group of law­suits. By its

Wac­count­ing, a to­tal of 31 fed­eral law­suits at­tack­ing the ACA have been filed. Of them, nine are pend­ing on ap­peal, nine are pend­ing in lo­cal district courts, and 13 were dis­missed and not ap­pealed. That di­ver­sity makes it dif­fi­cult to pin down ex­actly when the U.S. Supreme Court— which ex­perts on all sides of the is­sue agree will be the ultimate ar­biter of the law’s le­gal­ity—will take up the case.

Peter Lei­bold, a lawyer who has stud­ied the cases and writ­ten about them as ex­ec­u­tive vice pres­i­dent and CEO of the Amer­i­can Health Lawyers As­so­ci­a­tion, said his best guess is the case is likely to go in front of the Supreme Court for oral ar­gu­ments dur­ing the court session that be­gins in Oc­to­ber 2012.

Crit­ics of the law have been ea­ger to see a quicker res­o­lu­tion to the is­sue in the courts, while the Obama ad­min­is­tra­tion has been ac­cused of drag­ging its feet in court while rapidly work­ing to im­ple­ment the law in the states.

The Supreme Court last month de­clined a re­quest from Vir­ginia of­fi­cials to cir­cum­vent the ap­peals process and take up the ap­peal of Hud­son’s opin­ion im­me­di­ately—a de­ci­sion that was ap­plauded by the Obama ad­min­is­tra­tion.

Much of the lit­i­ga­tion over the law has cen­tered on the ques­tion of whether a per­son’s de­ci­sion not to buy pri­vate in­surance is con­sid­ered an eco­nomic ac­tiv­ity that Congress can reg­u­late.

Pro­po­nents of the law say that al­most ev­ery Amer­i­can will be hos­pi­tal­ized some­day, but if they don’t have in­surance, those bil­lions in col­lec­tive costs for the unin­sured will be shifted to pay­ing cus­tomers. Op­po­nents ar­gue the fed­eral gov­ern­ment has no con­sti­tu­tional au­thor­ity to force any­one to pur­chase a prod­uct they don’t want, re­gard­less of how well-in­ten­tioned the idea.

The Obama ad­min­is­tra­tion has said that the in­di­vid­ual man­date was nec­es­sary be­cause of the ACA’s re­quire­ment that in­surance com­pa­nies of­fer cov­er­age at stan­dard­ized prices to any­one who ap­plies for it.

Amer­ica’s Health In­surance Plans, a trade group for the in­dus­try, filed a friend-of-the­court brief in the ap­peal of the Vir­ginia de­ci­sion that stripped the man­date from the law. With­out it, AHIP ar­gues, con­sumers would wait un­til they got sick be­fore get­ting cov­er­age, which would force in­sur­ers to sig­nif­i­cantly raise rates for ev­ery­one.

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