The final word: The Supreme Court, the ACA and medicine’s continuing task

Sunday, July 01, 2012 01:42 PM
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Edward A. Dauer, LL.B., M.P.H.
Dean Emeritus, University of Denver Sturm College of Law

At the CMS Spring Conference in Vail last May, I participated in a forum about the then-upcoming Supreme Court decision on the Constitutional vitality of the Affordable Care Act, the federal health care law enacted in 2010 and scheduled to be fully implemented by 2014. When pressed to predict the outcome in the Court, I hedged. I thought the Medicaid expansion (the chief vehicle by which the poorest uninsured would be covered) would survive, and that the “individual mandate” (the lynchpin of premium limitations and guaranteed issue) would either be struck down 5-4, or upheld 6-3.

The theory was that the three more conservative justices (Alito, Scalia and Thomas) would vote to strike the mandate down. The four more liberal justices (Breyer, Ginsburg, Kagan and Sotomayor) would vote to uphold it. And if Justice Kennedy – often the swing vote on the Court – agreed with the conservatives, Chief Justice Roberts would join that group making it a 5-4 decision to invalidate the mandate, and thereby open the additional question of what other parts of the Act should go down with it (the so-called “severability” debate.)

If, on the other hand, Justice Kennedy voted with the liberal wing, the Chief Justice might join that majority, making it 6-3 to uphold, so that he could control the writing of the opinion of the Court. Under the Supreme Court’s internal rules the Chief Justice assigns the opinion unless he is in the minority, in which case it is assigned by the senior justice in the majority group.

Fortunately, I did not place a large bet on that prediction. As we know, Justice Kennedy voted to strike the mandate and the Chief Justice voted to uphold it – an outcome some pundits thought amazing if not inexplicable. And the legal reasoning by which the mandate was upheld was, so far as I know, predicted by no one. More on that in a moment.

I was nonetheless on target with one (admittedly very easy) prediction, and pretty close with another. I felt that the decision on the mandate, whichever way it went, would say nothing of any importance about health care or health care policy. It would, instead, deal entirely with an abstract Constitutional question: does Congress have the authority to require citizens to “engage in commerce” in ways some might not want to do? And while I thought the Medicaid expansion would survive, like many others I thought its weak spot was the Act’s penalty provision. As it was written, the federal government could strip a state that did not join in the expansion not only of its share of the expansion funds, but also of all of the Medicaid funds it is already receiving. Justice Roberts’ opinion – the operative decision of the Court despite the fact that there are four opinions with varying permutations of votes on the several key questions – reads pretty much that way. As expected, and not inappropriately, it contributes nothing of significance to the national discussion about health care.

As to the mandate, five justices concluded that under the Constitution’s Commerce Clause the federal government cannot force individuals to participate in unwanted commercial activity. More technically, the government cannot regulate commercial inactivity, such as not buying health insurance. The penalty for not buying insurance, however, was construed by a somewhat different configuration of justices to be a tax, thereby allowing the mandate to be upheld not under the Commerce Clause but under the government’s taxing power. The practical meaning of those two conclusions for Congress’ overall authority is not entirely clear. While citizens can’t be forced to buy something they don’t want, they can apparently be taxed if they don’t.

On the Medicaid expansion, the Chief Justice wrote that while the super-penalty for a state’s not joining in was too coercive to be Constitutionally valid, it was severable from the rest of the Act, leaving the expansion intact but without the penalty.

So what does it mean for health care? As I see it, the Affordable Care Act itself is supremely important. But in a very real way the Supreme Court’s decision is not. A metaphor that comes to mind is something like this: The most complex hurricane ever to form offshore, despite the varying forecasts about its path, does not hit the shoreline where an elaborate beachfront development is in process of being built. The developers incur some delay as they all hunker down before the storm, and a bit of flotsam litters the beach for a while, but the hurricane bypasses the shoreline with no lasting effects. Meteorologists will study it for years, just as lawyers and Constitutional scholars will study the several opinions of the Court in this case. But the beachfront developers – by the metaphor, those who are rebuilding American health care – just get to go back to work, to finish the job they were already on.

There are still risks to the federal statute, though they are mostly of the political kind, about which it would be unwise to speculate much before November 6. And there are legal challenges floating about, yet to be decided – for example whether, due to some infelicitous drafting in the Act, the federal government can legally offer premium subsidies in an exchange which it creates in a nonparticipating state, since the statutory text provides for subsidies only in state-created exchanges.

Of greater interest, however, may be actions by and within the individual states. With the super-penalty gone, a state could decline to participate in the Medicaid expansion without losing its existing funds. It would forgo only its share of the expansion funds. A state might do that for any of several reasons: one unsavory possibility is that the state could experience an out-migration of its poorer and most costly citizens to neighboring states which do offer care more inclusively.

Another might be a matter of political principle – “federalism,” it’s called. The governor of one state has already announced an intention to do just that. But it’s a nice question whether even a go-it-alone sort could get away with it. For one thing, the expansion moneys, if accepted, would in turn be paid as fees-for-services to in-state hospitals and physicians, creating political pressure from that quarter not to turn down the state’s take from the expanded federal funds. For another, there is at bottom no such thing as “federal funds,” apart from the fact of who assembles them. It all comes from the people who are simultaneously citizens of a state and of the federation. If, say, Texas declines to take its share of the expansion, Texas citizens’ federal tax money will leave the state for places where it would be more welcome, thereby benefitting the citizens of, say, Minnesota, at Texas’ expense. Like everything else, political principle has its limits.

Back to the metaphor. The Affordable Care Act, despite its thousands of pages of technical legal text, is still very much a work in progress. Apart from the new insurance rules, much of what it achieves will come from implementation decisions made by the professionals and leaders of health care itself – ACOs and other forms of integrating care are one example, experiments in payment reform another, and so on through the applications of comparative effectiveness research and many of the statute’s other strokes.

A significant enhancement of medicine’s opportunity to shape the health care of the future was created by the passage of the Act, not by the decision of the Supreme Court. The hurricane may have come close, it may have to suffer analysis by scholars of jurisprudence for a generation to come, but it did not wash away or make more difficult the developments already being built on the shoreline. Those who are capable, and responsible, for that construction may now simply continue their work.


Posted in: Colorado Medicine | Final Word | Health System Reform | Initiatives | Advocacy
 

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