The Supreme Court and the Affordable Care Act – Day 1

16 Apr

What has been billed as the court case of of the century is almost so ridiculous that I am tempted to begin this entry with “The Supreme Court, the Affordable Care Act, and the Obama Administration walk into a bar association….” but the sad fact of the matter is, that no matter how many brilliant legal minds have weighed in on this issue, it ultimately comes down to the five who make up the majority opinion. So, I’m going to give you my take on the oral arguments in a series of posts. I’ve waited, because I wanted to have time to reflect on what I read in the transcripts from the Court. A decision is still months away, so I figured I had some time to gather my thoughts.

The first day of oral arguments was concerned with whether or not the state of Florida had legal standing to bring this case before the Court. That hinged on whether the penalty associated with the individual mandate was a “penalty” or a “tax.” You see, if it is a tax, then the law says that no one can go to court over it yet, because no one has yet had to pay the tax. This stems from laws designed to ensure that the federal government is able to collect tax revenues without having to prove that payment is owed in court. Instead, people are required to pay their taxes, and may seek subsequent legal action to have their taxes returned to them. You have to admit, it makes sense. So, if the penalty in the ACA for those who don’t obtain insurance under the individual mandate is a “tax” then the whole case gets tossed out. If it’s a “penalty” it goes forward.

The funny thing is, neither the Obama Administration nor the state of Florida viewed the penalty as a tax, so the Court had to assign someone–Robert A. Long–to argue that the penalty was actually a tax. Another funny thing is that no one is arguing that the penalty is unconstitutional. Opponents are only upset over the individual mandate to buy insurance. They don’t think that the federal government can compel people to do that, but if the Court says they can, then the penalty is seen as coming along for the ride.

For me, this was the most telling exchange between several Justices and the counsel for the state of Florida, Gregory Katsas:

KATSAS: I’m happy to focus on currently eligible people who haven’t enrolled in Medicaid. That particular class is the one that gives rise to, simply in Florida alone, a pocketbook injury on the order of $500 to $600 million per year.

JUSTICE KAGAN: But that does seem odd, to suggest that the State is being injured because people who could show up tomorrow with or without this law will–will show up in greater numbers. I mean, presumably the State wants to cover people whom it has declared eligible for this benefit.

KATSAS: They–they could, but they don’t.

Translation: The state of Florida (and others like it) are concerned that people who are eligible for Medicaid, but currently unenrolled, might actually show up and ask for their benefits because of the mandate. They have estimated this to cost hundreds of millions of dollars–a “pocketbook injury”–that they wish to avoid in favor of the “no-cost” alternative of leaving these folks uninsured.

Now, this makes perfectly good sense from the State’s point of view, because they have to balance their budget, and adding substantially to the Medicaid rolls is a daunting prospect. In fact, it might push them to do things like raise taxes or cut other programs. It would be far better to let this play out “off the books” and pass the costs on to the insured in hidden ways that they can’t perceive nearly as readily as they could a tax increase. And that is precisely what they’ve done for decades.

Here’s hoping things get better on day 2…..


Leave a comment

Posted by on April 16, 2012 in Supreme Court


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: