Hand­i­cap­ping high-court de­ci­sion

High court to fo­cus on four ques­tions in ACA case

Modern Healthcare - - FRONT PAGE - Joe Carl­son

When the Supreme Court hears oral ar­gu­ments next year on the le­gal­ity of the Pa­tient Pro­tec­tion and Af­ford­able Care Act, the jus­tices will weigh the con­sti­tu­tion­al­ity of the two cen­tral ve­hi­cles for ex­pand­ing in­sur­ance cov­er­age by an es­ti­mated 32 mil­lion peo­ple.

The Con­gres­sional Bud­get Of­fice es­ti­mated that about 16 mil­lion more Amer­i­cans would be re­quired by the law’s min­i­mum cov­er­age pro­vi­sion to pur­chase in­sur­ance out of their own pock­ets, while an­other 16 mil­lion would re­ceive it through a man­dated ex­pan­sion of state Med­i­caid pro­grams.

On Nov. 14, the Supreme Court agreed to hear ar­gu­ments on the le­gal­ity of both in­sur­ance-ex­pan­sion meth­ods. The ar­gu­ments will likely be held in March and a de­ci­sion is ex­pected be­fore July, dur­ing the run-up to the pres­i­den­tial gen­eral elec­tion next year.

The court granted a to­tal of 5½ hours for the de­bates, an un­prece­dented allotment in modern times. Cer­tio­rari was granted on four spe­cific ques­tions raised in sev­eral pe­ti­tions for re­view, all aris­ing from one of the many law­suits chal­leng­ing the law. That law­suit, filed by Florida and joined by 25 other states, was ap­pealed to At­lanta’s 11th U.S. Cir­cuit Court of Ap­peals, the only court to strike down any part of the law. (See chart, p. 11)

Much of the pub­lic de­bate has cen­tered on the fa­mil­iar ques­tion about the in­di­vid­ual in­sur­ance man­date and whether past Supreme Court de­ci­sions have given Congress con­sti­tu­tional au­thor­ity to re­quire pri­vate cit­i­zens to pur­chase health in­sur­ance by 2014 or face an in­come-tax penalty.

The Supreme Court also will hear ar­gu­ments on whether the man­date could be sev­ered from the re­form law, al­low­ing the rest of its pro­vi­sions to stand in the event the man­date is found un­con­sti­tu­tional.

They’ll also con­sider whether such ar­gu­ments are al­to­gether pre­ma­ture, since the man­date is a tax un­der some le­gal the­o­ries, which would place it out­side of ju­di­cial re­view un­til 2014 by a fed­eral law that pre­vents judges from in­ter­fer­ing in mat­ters of tax­a­tion.

Ex­perts in con­sti­tu­tional law, how­ever, agreed that the most sur­pris­ing as­pect of the court’s rul­ing was its de­ci­sion to grant a one- hour hear­ing to the ques­tion of whether the re­form law un­con­sti­tu­tion­ally co­erces states into ex­pand­ing their Med­i­caid pro­grams.

In con­trast to the free­dom states have to­day in set­ting el­i­gi­bil­ity cri­te­ria for their Med­i­caid pro­grams, the Af­ford­able Care Act says any state that re­ceives fed­eral fund­ing to sup­port its pro­gram af­ter 2014 must of­fer cov­er­age to any nonelderly res­i­dent with an in­come be­low 133% of the fed­eral poverty level—$29,726 for a fam­ily of four in 2011.

The fed­eral govern­ment will pay 100% of the new en­rollees’ costs in 2014, 2015 and 2016, and a de­clin­ing per­cent­age in the years af­ter, drop­ping to 90% of new en­rollees’ costs by 2020.

The law also re­quires state Med­i­caid pro­grams for the first time to pro­vide a set of min­i­mum es­sen­tial ser­vices that would be cov­ered un­der the pro­grams.

Any state that doesn’t agree to those terms will, un­der the re­form law, lose all of its fed­eral Med­i­caid fund­ing—which crit­ics say is tan­ta­mount to co­er­cion, given Med­i­caid’s wide use and the fact that it is the largest fed­eral grant-in-aid in ev­ery state.

The fed­eral govern­ment spent $251 bil­lion sup­port­ing state Med­i­caid pro­grams in 2009. Most states re­ceived more than $1 bil­lion each, cov­er­ing at least half of their to­tal Med­i­caid costs.

Florida and the 25 other states sued HHS to stop the Med­i­caid ex­pan­sion, and the Supreme Court granted the is­sue a hear­ing even though nei­ther the district court judge in Florida nor the ap­peals court sided with the states so far on that ar­gu­ment.

“I think it’s the most im­por­tant is­sue in the case, and it’s the sleeper is­sue. It gets no at­ten­tion in the me­dia,” said James Blum­stein, a pro­fes­sor at Van­der­bilt Law School and di­rec­tor of the Van­der­bilt Health Pol­icy Cen­ter in Nashville. “I think that it’s the most likely to be suc­cess­ful for the states.”

Although the is­sue is of­ten por­trayed as of­fer­ing states the choice of whether to con­tinue of­fer­ing Med­i­caid, Blum­stein ar­gues the re­verse—the fed­eral govern­ment has al­ready voted to can­cel “tra­di­tional Med­i­caid” start­ing in 2014, he said, and states now must de­cide whether to join the new Med­i­caid in which the fed­eral govern­ment dic­tates terms of el­i­gi­bil­ity.

He said Med­i­caid should be seen as a “re­la­tional con­tract” by the jus­tices, in which some changes are con­tem­plated be­tween the par­ties, but they have to be “rea­son­able and fair” with the terms of the ex­ist­ing agree­ment.

Blum­stein dis­missed the idea that the jus­tices may tend to side with the fed­eral govern­ment on that is­sue be­cause ev­ery other court has.

“This gives the court a chance to put a stake in the ground and say there is a limit to the power of the fed­eral govern­ment to change the terms of a pro­gram,” he said.

At­tor­ney James Woot­ton—who is the chair­man of the Part­ner­ship for Amer­ica, a not-for-profit that calls re­peal­ing the re­form law its high­est pri­or­ity—said the Med­i­caid ex­pan­sion de­bate may res­onate on the Supreme Court be­cause many of the judges are sen­si­tive to costly fed­eral man­dates.

“The Med­i­caid cov­er­age is an un­funded man­date on the states,” Woot­ton said. “I think the court de­ci­sion to take a look at that may re­flect this un­ease that a lot of peo­ple have that if it’s too tough po­lit­i­cally to raise the taxes and pay for some­thing at the national level, then it’s very trou­bling to see the Congress sort of avoid that tough de­ci­sion to pay for some­thing and then push that de­ci­sion down to the state level.”

Many sup­port­ers of the law, mean­while, re­ject that line of at­tack.

Ron Pol­lack, the ex­ec­u­tive di­rec­tor and vice pres­i­dent of re­form-law sup­porter Fam­i­lies USA, said he found it “flab­ber­gast­ing” that the court opted to re­view the states’ Med­i­caid­co­er­cion ar­gu­ment.

“How do you talk about an un­funded man­date when in the first three years 100% is be­ing paid for by the fed­eral govern­ment?” Pol­lack said. “This no­tion of this be­ing an un­funded man­date is ab­surd.”

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