I don't know about you but I've been enjoying watching all of the reactions to yesterday's decision. In addition to the chuckle I got when a few major news outlets got it wrong, I've been smirking about opponents' claims that the law places a "massive tax" on all Americans.
Let's just put things in perspective here: Only a tiny fraction of people will be impacted by the individual responsibility provisions - those who can afford coverage but choose not to buy it.
What is that "tiny fraction" you ask? Researchers at the Urban Institute told us earlier this year that only TWO out of one hundred would be impacted (more here on this from the Center on Budget and Policy Priorities). And again: These are people who can afford coverage but choose not to buy it.
What IS massive? The millions of Americans who now have peace of mind that they will have access to secure health coverage even when they get sick, change jobs, ore face challenging health conditions. They can rest assured that getting the health treatment they need won't bankrupt their families.
Elisabeth Burak
Senior Program Director
Georgetown University Center for Children & Families
(originally posted here on the Say Ahhh! Children's Health Policy Blog)
Showing posts with label Individual Mandate. Show all posts
Showing posts with label Individual Mandate. Show all posts
Sunday, 1 July 2012
Thursday, 28 June 2012
Health Reform Upheld: A Summary of the Supreme Court's Decision
In a 5-4 decision, the Supreme Court handed down its long-awaited decision on the health reform bill, National Federation of Independent Business v. Sebelius, this morning. This historic decision has upheld the constitutionality of the Patient Protection and Affordable Care Act (ACA) as a whole (striking down only one penalty provision as unconstitutional), upholding measures improving access to and the quality of healthcare in the United States by expanding coverage, increasing benefits, and ensuring access to preventive services for many. This is a victory for communities and public health advocates throughout the country, and a relief for the many Americans already benefiting from some of the ACA’s programs.
Chief Justice Roberts delivered the opinion of the Court, and upheld the constitutionality of the individual mandate under Congress’s Taxing Power. [See here for a table of how all of the Justices' voted]. The individual mandate provision of the ACA states that individuals shall purchase health insurance, or pay a penalty. The Court considered the substance and application of the payment, and not its label. It was noted that the payment is collected by the IRS through the normal means of taxation. While undoubtedly intended to induce individuals to purchase health insurance, that a tax may have the purpose of influencing behavior rather than generating revenue is not problematic. This payment was likened to the taxes imposed on cigarettes for the purposes of smoking deterrence. Furthermore, the fact remained that the payment for failing to obtain insurance did not amount to a punishment for unlawful activity since it was not limited to willful violations of the mandate (as unlawful actions frequently are). Consequently, the Court concluded that mandate “leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.” Page 44.
The Court was unpersuaded by the argument that the individual mandate fell within Congress's Commerce Power. The Constitution grants Congress the power to regulate commercial activity, however, the Court found the mandate not a regulation of existing commercial activity, but instead compulsion to engage in commercial activity, an action beyond the limited power given to the government under the Constitution.
While the individual mandate was upheld, the Supreme Court, however, did strike down the penalty of the Medicaid expansion provisions of the ACA as unconstitutional. Under the Medicaid program, the federal government provides funds to participating states, and in return the states agree to follow certain standards. The ACA expanded eligibility for Medicaid, and required states to expand coverage of their state’s Medicaid programs in accordance with the ACA, or lose all federal Medicaid funding (typically 50 to 83 percent of the state’s Medicaid program spending).
Although the Spending Power grants Congress the authority to create cooperative state-federal spending programs such as Medicaid, states must voluntarily accept the terms of such spending programs. The Court held that, because the ACA penalizes states who choose not to participate in the Medicaid expansion by withholding existing federal funding under the Medicaid program, the provision was coercive. In choosing not to participate in the Medicaid expansion, states would lose over 10 percent of their overall budget (page 51), an effect the Court found to leave states with no real option but to accept the terms of the program, making participation non-voluntary and the program unconstitutional.
Furthermore, the expansion was found to be not a modification of an existing program, but instead the creation of a new one. Medicaid as initially enacted covered four distinct categories of people: “the disabled, the blind, the elderly, and needy families with dependent children.” However, the expansion changes the program into one that covers the entire nonelderly population with incomes less than 133 percent of the poverty level (or 138% FPL if you count the 5% modified adjusted gross income or MAGI). The Court found this not to be a mere modification of an existing program to provide healthcare to needy populations, but instead a transformation of the program into “an element of a national plan to provide universal health coverage.” Pages 53-54. The Court concluded by explaining that its opinion did not prevent the federal government from offering funds to expand Medicaid eligibility, only that states choosing not to participate in the new expansion could not be penalized through the loss of their existing federal Medicaid funding.
Today the United States has taken a great step towards reshaping the American healthcare system. The ACA and its reforms to the system will have a lasting affect on the way people receive and pay for personal medical care, improving access and quality while containing costs, and improving the health of our nation as a whole.
Amanda Swanson
Guest Blogger for Illinois Health Matters
*To read a summary of the Supreme Court hearings on the ACA, please see the post Supreme Court Wrap Up – A Law Student’s Perspective.
Chief Justice Roberts delivered the opinion of the Court, and upheld the constitutionality of the individual mandate under Congress’s Taxing Power. [See here for a table of how all of the Justices' voted]. The individual mandate provision of the ACA states that individuals shall purchase health insurance, or pay a penalty. The Court considered the substance and application of the payment, and not its label. It was noted that the payment is collected by the IRS through the normal means of taxation. While undoubtedly intended to induce individuals to purchase health insurance, that a tax may have the purpose of influencing behavior rather than generating revenue is not problematic. This payment was likened to the taxes imposed on cigarettes for the purposes of smoking deterrence. Furthermore, the fact remained that the payment for failing to obtain insurance did not amount to a punishment for unlawful activity since it was not limited to willful violations of the mandate (as unlawful actions frequently are). Consequently, the Court concluded that mandate “leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.” Page 44.
The Court was unpersuaded by the argument that the individual mandate fell within Congress's Commerce Power. The Constitution grants Congress the power to regulate commercial activity, however, the Court found the mandate not a regulation of existing commercial activity, but instead compulsion to engage in commercial activity, an action beyond the limited power given to the government under the Constitution.
While the individual mandate was upheld, the Supreme Court, however, did strike down the penalty of the Medicaid expansion provisions of the ACA as unconstitutional. Under the Medicaid program, the federal government provides funds to participating states, and in return the states agree to follow certain standards. The ACA expanded eligibility for Medicaid, and required states to expand coverage of their state’s Medicaid programs in accordance with the ACA, or lose all federal Medicaid funding (typically 50 to 83 percent of the state’s Medicaid program spending).
Although the Spending Power grants Congress the authority to create cooperative state-federal spending programs such as Medicaid, states must voluntarily accept the terms of such spending programs. The Court held that, because the ACA penalizes states who choose not to participate in the Medicaid expansion by withholding existing federal funding under the Medicaid program, the provision was coercive. In choosing not to participate in the Medicaid expansion, states would lose over 10 percent of their overall budget (page 51), an effect the Court found to leave states with no real option but to accept the terms of the program, making participation non-voluntary and the program unconstitutional.
Furthermore, the expansion was found to be not a modification of an existing program, but instead the creation of a new one. Medicaid as initially enacted covered four distinct categories of people: “the disabled, the blind, the elderly, and needy families with dependent children.” However, the expansion changes the program into one that covers the entire nonelderly population with incomes less than 133 percent of the poverty level (or 138% FPL if you count the 5% modified adjusted gross income or MAGI). The Court found this not to be a mere modification of an existing program to provide healthcare to needy populations, but instead a transformation of the program into “an element of a national plan to provide universal health coverage.” Pages 53-54. The Court concluded by explaining that its opinion did not prevent the federal government from offering funds to expand Medicaid eligibility, only that states choosing not to participate in the new expansion could not be penalized through the loss of their existing federal Medicaid funding.
Today the United States has taken a great step towards reshaping the American healthcare system. The ACA and its reforms to the system will have a lasting affect on the way people receive and pay for personal medical care, improving access and quality while containing costs, and improving the health of our nation as a whole.
Amanda Swanson
Guest Blogger for Illinois Health Matters
*To read a summary of the Supreme Court hearings on the ACA, please see the post Supreme Court Wrap Up – A Law Student’s Perspective.
Tuesday, 3 April 2012
Supreme Court Wrap Up - A Law Student's Perspective
Last week the Supreme Court heard oral arguments on the Affordable Care Act (ACA), commonly known as health care reform. Hearings were held for more than six hours over three days -- more time than has been given to a case in over 50 years. At least 170 briefs were filed -- more than any other case in history. Efforts to overturn provisions of the history-making law are proving to make history themselves.
On the first day, the Court heard arguments on the impact of the Anti-Injunction Act (AIA) on the constitutional challenge to the ACA’s minimum coverage provision. The AIA works to prevent federal courts from hearing cases in which taxpayers are seeking court orders to prevent the government from assessing or collecting a federal tax - the theory being that the proper time for a court’s involvement in such cases is after the tax in question has already been paid (which for the ACA could be not for a couple more years). As a consequence, before the Supreme Court can consider whether the ACA is constitutional, it must determine whether the AIA takes away the authority of federal courts to hear the case, or whether it does not apply to this controversy. Counsel for the states argued that even if the penalty is a tax, the controversy should still be heard by the Court because the respondents are not seeking to enjoin the assessment or collection of a tax, but instead the requirement that everyone purchase health insurance. The Justices considered the use of the word “penalty” in the ACA, the relationship between the insurance mandate and the penalty, and the effect of both provisions (individually and together) on the public and the states.
On Tuesday, the Supreme Court heard arguments on the minimum coverage provision of the ACA, which requires that all Americans (with limited exceptions) maintain a minimum level of “essential health care coverage.” The issues the Court must address are whether it is within Congress’s power under the Commerce Clause of the Constitution to mandate the purchase of health insurance coverage, and whether Congress has the authority to assess a penalty against those who refuse to do so. Americans have already been subjected to a number of mandates before the ACA, such as filing income tax returns and serving on a jury, but challengers to the ACA argue that purchasing health insurance is not a duty of citizenship, as other mandates have been.
Under the Commerce Clause, Congress has the power to regulate an activity that has a substantial affect on interstate commerce. The questioning on Tuesday centered mostly around which market was being regulated by the ACA: the insurance market, health services generally, or the portion of health services utilized by the uninsured. The Justices also posed many questions with regard to the argument that everyone is in the healthcare market, noting that almost everyone is going to require some kind of healthcare during their lifetime, that having health insurance is often a requirement for people to access the healthcare they need, and that the government is able to mandate vaccinations when a public health emergency arises.
On the third day of oral arguments, the Court heard arguments on the severability of the individual mandate provision and state sovereignty in the Medicaid expansion. The severability issue considers whether Congress would have intended the rest of the ACA to stand if the individual mandate provision was found to be unconstitutional. Challengers to the ACA argue that the individual mandate is the essence of the ACA, and that Congress would not have intended the additional “miscellaneous” provisions of the ACA to stand without it. The Court also heard arguments in support of leaving the rest of the ACA intact and letting Congress decide whether to enact further amendments if needed, and the government’s argument in favor of striking also only those additional provisions found closely linked to the individual mandate; the guaranteed-issue and community-rating provisions.
The hearings concluded with arguments on the Medicaid expansion. Under the Medicaid program, the federal government provides funds to participating states, and in return the states agree to follow certain standards. The ACA set new standards for the Medicaid program in expanding eligibility to individuals with incomes up to 133 percent of the poverty level, the increased costs of which will be paid for entirely by the federal government until 2016, and then decrease to 90 percent federal coverage by 2020. As a result, states would be required to expand coverage of their state’s Medicaid programs, or lose all federal Medicaid funding (typically 50 to 83 percent of the state’s Medicaid program spending). Arguments on this issue addressed the possible coercion created by the ACA, by offering states an offer that cannot be refused. Whether coercion depends on how much the federal government threatens to take away or what it is offering and the relationship between both was also discussed. At the end of the hearing, Justice Ginsburg sought clarification that the challengers to the ACA would be satisfied with providing states the opportunity to opt out of the Medicaid expansion, instead of striking the expansion from the bill entirely.
Finally, last Friday, the Supreme Court Justices cast their votes on the constitutionality of the ACA in a conference room with no one else present. In the weeks to come, the Justices will draft opinions and dissents on the case, and one Justice may be assigned to write the majority opinion, or multiple will be assigned to each write about different issues. While each Justice’s vote can certainly change over the course of the next several weeks as they draft their opinions, most often changes are from the minority to the majority after reading the opinion, although it is possible that a vote change will affect the outcome of the controversy. It will be late June or early July before the decision is finalized and the opinion is made available to the public. Until then, we can only speculate as to where the Justices will fall on the issue.
On the first day, the Court heard arguments on the impact of the Anti-Injunction Act (AIA) on the constitutional challenge to the ACA’s minimum coverage provision. The AIA works to prevent federal courts from hearing cases in which taxpayers are seeking court orders to prevent the government from assessing or collecting a federal tax - the theory being that the proper time for a court’s involvement in such cases is after the tax in question has already been paid (which for the ACA could be not for a couple more years). As a consequence, before the Supreme Court can consider whether the ACA is constitutional, it must determine whether the AIA takes away the authority of federal courts to hear the case, or whether it does not apply to this controversy. Counsel for the states argued that even if the penalty is a tax, the controversy should still be heard by the Court because the respondents are not seeking to enjoin the assessment or collection of a tax, but instead the requirement that everyone purchase health insurance. The Justices considered the use of the word “penalty” in the ACA, the relationship between the insurance mandate and the penalty, and the effect of both provisions (individually and together) on the public and the states.
On Tuesday, the Supreme Court heard arguments on the minimum coverage provision of the ACA, which requires that all Americans (with limited exceptions) maintain a minimum level of “essential health care coverage.” The issues the Court must address are whether it is within Congress’s power under the Commerce Clause of the Constitution to mandate the purchase of health insurance coverage, and whether Congress has the authority to assess a penalty against those who refuse to do so. Americans have already been subjected to a number of mandates before the ACA, such as filing income tax returns and serving on a jury, but challengers to the ACA argue that purchasing health insurance is not a duty of citizenship, as other mandates have been.
Under the Commerce Clause, Congress has the power to regulate an activity that has a substantial affect on interstate commerce. The questioning on Tuesday centered mostly around which market was being regulated by the ACA: the insurance market, health services generally, or the portion of health services utilized by the uninsured. The Justices also posed many questions with regard to the argument that everyone is in the healthcare market, noting that almost everyone is going to require some kind of healthcare during their lifetime, that having health insurance is often a requirement for people to access the healthcare they need, and that the government is able to mandate vaccinations when a public health emergency arises.
On the third day of oral arguments, the Court heard arguments on the severability of the individual mandate provision and state sovereignty in the Medicaid expansion. The severability issue considers whether Congress would have intended the rest of the ACA to stand if the individual mandate provision was found to be unconstitutional. Challengers to the ACA argue that the individual mandate is the essence of the ACA, and that Congress would not have intended the additional “miscellaneous” provisions of the ACA to stand without it. The Court also heard arguments in support of leaving the rest of the ACA intact and letting Congress decide whether to enact further amendments if needed, and the government’s argument in favor of striking also only those additional provisions found closely linked to the individual mandate; the guaranteed-issue and community-rating provisions.
The hearings concluded with arguments on the Medicaid expansion. Under the Medicaid program, the federal government provides funds to participating states, and in return the states agree to follow certain standards. The ACA set new standards for the Medicaid program in expanding eligibility to individuals with incomes up to 133 percent of the poverty level, the increased costs of which will be paid for entirely by the federal government until 2016, and then decrease to 90 percent federal coverage by 2020. As a result, states would be required to expand coverage of their state’s Medicaid programs, or lose all federal Medicaid funding (typically 50 to 83 percent of the state’s Medicaid program spending). Arguments on this issue addressed the possible coercion created by the ACA, by offering states an offer that cannot be refused. Whether coercion depends on how much the federal government threatens to take away or what it is offering and the relationship between both was also discussed. At the end of the hearing, Justice Ginsburg sought clarification that the challengers to the ACA would be satisfied with providing states the opportunity to opt out of the Medicaid expansion, instead of striking the expansion from the bill entirely.
Finally, last Friday, the Supreme Court Justices cast their votes on the constitutionality of the ACA in a conference room with no one else present. In the weeks to come, the Justices will draft opinions and dissents on the case, and one Justice may be assigned to write the majority opinion, or multiple will be assigned to each write about different issues. While each Justice’s vote can certainly change over the course of the next several weeks as they draft their opinions, most often changes are from the minority to the majority after reading the opinion, although it is possible that a vote change will affect the outcome of the controversy. It will be late June or early July before the decision is finalized and the opinion is made available to the public. Until then, we can only speculate as to where the Justices will fall on the issue.
Amanda Swanson
LL.M. in Health Law Candidate
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