Health Care Reform on Judicial Fast Track

The wheels of justice, as the cliché goes, grinds slowly. Given the complexity of the Patient Protection and Affordable Care Act this poses a bit of a problem. Federal District Court judges are reaching contrarian conclusions concerning the constitutionality of the PPACA. Everyone knows the validity of the health care reform law will be decided by the U.S. Supreme Court. In the meantime, however, should states continue to implement the law or hold off on complying? The sooner the Supreme Court weighs in the sooner federal and state regulators (let alone carriers, employers, brokers, and consumers) will know what’s what.

Remember the law suit filed by 26 states (and the National Federation of Independent Businesses) in Florida? That’s the one in which U.S. District Judge Roger Vinson decided that the PPACA’s requirement that individuals obtain health care coverage or pay a penalty/tax/fine/whatever was unconstitutional. In making his decision Judge Vinson stated the law’s violation of the Commerce Clause made the entire Act unconstitutional, but he declined to issue an injunction to stop implementation of the health care reform law. Some states used the the Judge’s ruling to stop work on implementing the law; others did not.

This is the suit likely to move things to the Supreme Court the fastest. Because in an attempt to bring some clarity to the situation, the Justice Department asked Judge Vinson to clarify whether he intended to halt the law – at least in the 26 states party to the suit. They got their answer from Judge Vinson in a response that, when you weed out the criticism of the Justice Department, comes down to yes, he did mean to halt implementation of the law, but he would stay his ruling (which means he’d delay making it effective) so long as the federal government appealed his decision on an expedited basis.

The Department complied and the 11th U.S. Circuit Court of Appeals has put a hearing of Judge Vinson’s decision on a fast track. For a case of this magnitude, the Court set a short timetable. Lawyers for the Obama Administration must file its first briefs by April 4th. The states will have until May 4th to make their case. Federal attorneys will have until May 18th to respond to the states’ filing.

Usually appeals of this nature are heard by a panel of three Circuit Court judges. The losing party may then appeal the case to the all the judges in the Circuit (referred to as an “en banc” hearing). Some of the states involved in the suit have are seeking to skip the panel and have all 10 judges in the Circuit consider the case. This approach would more quickly get the case to the Supreme Court. In any event, oral arguments before the 11th Circuit will likely occur this summer. Given the importance of their decision, a decision by the Court could take a few months.

This is not the only case moving through the system concerning the constitutionality of the PPACA. And even with this expedited timetable the odds are the Supreme Court will announce its decision in the midst of the 2012 elections. Which means there’s plenty of time for Congress to modify the law, for other suits to address non-Commerce Clause issues, and for health care reform to dominate the presidential campaign and the fight for Congress. Which means the Supreme Court’s decision will not be the end of America’s health care reform process, regardless of what they rule it will only be the start of the next round of America’s health care reform process.

Health Care Reform Developments

Some quick tidbits and news items concerning health care reform you hopefully find useful – or at least interesting:

Judge Upholds PPACA: This time the plaintiffs claimed the individual mandate provisions in the Patient Protection and Affordable Care Act violated their religious freedom. They also argued the financial penalties were too severe. U.S. District Judge Gladys Kessler dismissed their lawsuit, declaring that Congress was “within the bounds” of the Commerce Clause in mandating that all individuals obtain health care coverage. Judge Kessler based her decision on the cost shift that occurs when uninsured individuals obtain medical care and how their lack of coverage results in higher premiums for those with medical policies. The result is “substantially higher insurance premiums for those other individuals who do obtain coverage. Thus, the aggregate effect on interstate commerce of the decisions of individuals to forgo insurance is very substantial.”

This makes three District Court Judges who have upheld the PPACA and two who have opposed it. Most of the reports on this most recent decision note that the three Judges finding the PPACA constitutional were appointed by President Bill Clinton, a Democrat, while the two declaring the individual mandate unconstitutional were appointed to the bench by Republican presidents. This focus on the party affiliation of the appointing president comes up frequently when appellate courts, including the Supreme Court, make a decision. It’s important not to get too caught up in this.

Yes, presidents tend to support judges with similar perspective to the law – and to what constitutes justice –as they have. Which means Democratic appointees tend to be more “liberal” and Republican appointees more “conservative.” (I use the quotes because these terms don’t always mean the same thing in the context of legal decisions. The Supreme Court decision in Citizens United, for example, which overturned decades of precedent to unfetter corporations’ ability to contribute to campaigns, can be cited as an example of judicial activism, something conservatives often decry, yet in this case was a result Republicans applauded). But judges, like people in general, are full of surprises. Chief Justice Earl Warren, generally regarded as a liberal judge, was appointed by President Dwight Eisenhower. Justice Lewis Powell was appointed by President Richard Nixon. And so on. My point here is not that courts are immune from politics or what’s happening in society. I’m simply pointing out that assuming you can predict how other court decisions concerning the PPACA will be resolved by looking at the party of the president appointing the judge or justices is of limited value.

Seeking Clarification: When Federal District Court Judge Roger Vinson found the individual mandate provision of the PPACA exceeded Congress’ authority under the Commerce Clause he further declared that this made the entire law unconstitutional. However, he did not issue an injunction preventing implementation of the law. Which raises an interesting question: should states and the federal government continue to implement the PPACA or not?

The Justice Department has asked Judge Vinson to clarify his ruling. The concern expressed by the DOJ is that stopping state and federal officials from moving forward in implementing the law while various suits against it make their way to the Supreme Court “would pose a risk of substantial disruption and hardship for those who rely on the provisions hat have already been implemented. Others assert that Judge Vinson’s ruling is clear: the government lacks authority to enforce the law in the 26 states connected to the suit decided by Judge Vinson.

Judge Vinson wants to move quickly to clarify the situation. He has given states party to the suit until tomorrow to respond to the Administration’s argument that implementation of the law should proceed in spite of his finding the law unconstitutional.

CLASS CHANGES: Secretary of Health and Human Services Kathleen Sebelius, acknowledging the long-term care provisions of the Patient Protection and Affordable Care Act are “far from perfect” is looking to make some significant changes to this part of the law. The PPACA gives HHS a great deal of latitude in developing and overseeing the Community Living Assistance Service and Supports Act program. Under this program, employees will be automatically enrolled in this long-term care plan without regard to pre-existing conditions. After participating in the program for at least five years enrollees would be eligible for no less than a $50 per day benefit.

According to CQ HealthBeat, Secretary Sebelius has expressed concern about the long-term sustainability of the program unless it can be designed to attract healthy individuals and not just those with health problems. She cited a clear need for a strong educational program.

According to Modern Healthcare, the changes to the CLASS Act program being considered by HHS include indexing premiums to projected benefits; offering a range of payments instead of a $50 daily benefit (indexed to inflation); modifying qualifications; and eliminating loopholes that allow enrollees to receive benefits even if they only sporadically pay premiums.

Be Careful What You Wish For:  I’m frequently asked why the PPACA is written the way it is, why Democrats wanted to insert the federal government so deeply into the health insurance world. Why couldn’t they let the markets handle things? The reason is that they (and many Republicans) don’t think the market was working well. I’ll write more about this in a later post, but it’s important to put the health care reform debate in context. Premiums were skyrocketing. Rescissions, many of which seemed inexcusable, was front-page news. Job-lock due to pre-existing conditions was viewed as dampening the economy. Health insurance company executives were receiving huge sums of money while a rapidly increasing number of middle-class Americans were finding it impossible to afford insurance coverage. Again, more details on this to come, but the response was the PPACA: insurance market reforms coupled with increased subsidies to help more Americans obtain more regulated products. (And yes, a whole lot more, but for now, please allow me to oversimplify).

However, when government engages in managing a segment of the economy no single lawmaker, regulator or party gets to determine where that involvement ends. Democrats may have wanted to assert control over the behavior of what they consider to be irresponsible insurance companies. But they’re getting a whole lot more: conservatives using health care reform to advance their anti-abortion agenda. This in turn has opened the door for broadening the abortion debate beyond government health care programs. Representative Chris Smith has authored a bill that would disallow tax deductions by businesses if their health care plans coverage abortions while employees would have to treat premiums paid on their behalf for such plans as taxable income.

As I wrote over a year ago, it was inevitable that conservatives would use the tools crafted by liberals concerning health care reform to advance their own goals. It’s as if politicians believe the balance of power will never change. Democrats control Congress and the White House so the health care reform law will only be used to advance progressive causes. The reality, however, is that pendulums swing – and political pendulums swing quickly and far. One party may craft the power tools, but the other party will always get a turn at using them.

Federal Judge Declares PPACA Unconstitutional

Federal District Court Judge Roger Vinson declared the Patient Protection and Affordable Care Act unconstitutional. The ruling in a suit brought by governors and attorneys general from 26 states is the most sweeping legal decision against President Barack Obama’s health care reform package. 

Specifically, Judge Vinson decision focused on the legislation’s requirement that all Americans obtain health care coverage (the individual mandate). He found the individual mandate violated the Commerce Clause (while in the same decision dismissing plaintiff’s claim the PPACA was unconstitutional because of the changes it makes to the Medicaid program

All of this was expected. What was a bit of suprise is that Judge Vinson went further stating:  “Because the individual mandate is unconstitutional and not severable, the entire act must be declared void.”  Compare this to the December decision by U.S. District Judge Henry Hudson who ruled in a suit brought by the state of Virginia that the individual mandate was unconstitutional. Judge Hudson, however, determined that those provisions of the health care reform law that did not depend on the individual mandate “are legal and can proceed.”

Reuters describes Judge Vinson as struggling with the decision to invalidate the entire law as he recognized the decision “will have indeterminable implications” – which is legalese for “this shakes things up a bit, doesn’t it?” In the end, however, as reported by the New York Times, he determined that the individual mandate “exceeds the regulatory powers granted to Congress under the Commerce Clause of the Constitution. Judge Vinson wrote that the provision could not be rescued by an associated clause in Article I that gives Congress broad authority to make laws ‘necessary and proper’ to carrying out its designated responsibilities.”

Significantly, Judge Vinson decided not to stop implementation of the PPACA from moving forward pending appeals. Nonetheless, one of the the lawyers for the states, David Rivkin, Jr., was quoted as declaring that “With regard to all parties, the statue is dead. The statute is as if it never was.”

Well, not really. If Judge Vinson had suspended or enjoined the law Mr. Rivkin would have something more than enthusiasm to stand upon. But by allowing work on implementing reform to move forward, this decision becomes part of a mix of several cases. With District Judges ruling to strike down part (and now all) of the Patient Protection and Affordable Care Act and others upholding the health care reform law the next step is for Appellate Courts to hear appeals of these decisions.

Eventually the question of whether the PPACA is constitutional or not will be determined by the U.S. Supreme Court. Which will be fascinating to watch. While Justices prize their independence, the fact is that they all have a point of view based on a mix of their understanding of the law and constitution, their personal experience, and their political ideologies – not in equal measure. While there may be surprises, what this could mean is that the fate of President Obama’s signature legislative accomplishment is in the hands of Justice Anthony Kennedy. The reason is that four of the Justices are expected to be skeptical of expanding the Commerce Clause while four are likely to be more comfortable with the idea. Justice Kennedy is viewed as a moderate and the swing vote on the Court as currently comprised.

In the meantime implementation of the PPACA by regulators, carriers and others will continue apace – as will legislative attempts in Congress and state legislatures to modify (or repeal) the law. All of which means that Judge Vinson’s declaration that the PPACA is unconstitutional is an interesting chapter in the history of reforming health care and health care coverage in America, but it’s only a chapter in a very long book.

Here’s a link to the text of Judge Vinson’s ruling striking down the health care reform law as unconstitutional.

For those who prefer to listen to their legal analysis, NPR offers a clear presentation of Judge Vinson’s decision.