28th
a brief guide to the healthcare law
Tomorrow, on the final day of its term, the Supreme Court will issue a decision that will determine the constitutionality of the Affordable Care Act (I’ll call it the healthcare law). Instead of offering any predictions, which aren’t very helpful anyways, I thought I would try to add something which I have seen relatively little of in the press coverage recently, especially by the major newspapers — that is, a basic explanation of exactly how the healthcare law works, and the constitutional arguments in favor or against the law. I’ll try to do this in a few short paragraphs, but as a disclaimer, I should say that the actual arguments are much more comprehensive and complex than what I am about to say.
The U.S. government, unlike state governments, is a government of enumerated powers, meaning that when Congress wants to enact legislation, such as the healthcare law, it must act within the powers that are prescribed to it within the Constitution. Among these powers are the power to tax and spend for the general welfare, to coin money, to regulate interstate commerce, and so on. In addition, Congress has the power to enact all laws “necessary and proper” to carry into execution any validly enacted law under the powers that are set forth in the Constitution.
When Congress enacted the healthcare law, it did so under its commerce powers. Opponents of the law have challenged it as exceeding the limits of Congress’s constitutional authority under the Commerce Clause. The issue that has received the most attention is the so-called Individual Mandate, which is a part of the law that requires most people to obtain health insurance coverage for themselves and their tax dependents beginning in 2014.
Some context is useful to understansding how the Individual Mandate works: A large number of Americans are unable to obtain health insurance because providers refuse them coverage on the basis of a pre-existing condition. To address this problem, the healthcare law includes a provision that prohibits health insurance companies from denying coverage to people for any reason. This is called the guaranteed-issue provision. But, by requiring insurance companies to insure people who previously could have been refused health insurance because a pre-existing condition made them too high a risk, premiums would rise to compensate for that risk, which would then contribute to the higher cost of obtaining insurance, and coverage would actually decrease.
To stabilize the market, the healthcare law includes something called the community-rating provision, which limits the way health plans can vary premiums. The community-rating provision requires premiums to be based on certain factors — such as age, geographic area, and tobacco use — and the effect is to prohibit plans from charging higher premiums based on health status or gender.
Similarly, the Individual Mandate is designed to combat unnecessarily high premiums by requiring the participation of all people in the health insurance market. So, as the government frames it, the guaranteed-issue provision is a valid exercise of Congress’s power under the Commerce Clause. And the community-rating provision and the Individual Mandate are “necessary and proper” to carry the law into effect.
The Individual Mandate is the issue that has received the most attention in the media. Basically, opponents of the law argue that the commerce power extends only to regulating commerce or markets, but that it does not authorize Congress to force people to become a part a commercial market in order to regulate their activity. The government, in turn, argues that, by virtue of being alive, every person becomes a participant in the market for healthcare whether or not they are a consumer of health services at that particular moment. It is enough, according to the government’s position, that everyone will one day need health services and to pay for that, will need health insurance. So, instead of regulating insurance at the point of sale, which the law’s opponents concede would be constitutional, the government’s argument is that Congress is simply regulating persons who are sure to be in the market for health insurance, though prior to any sale.
This is the basic framework, though there are many other issues that have been raised. Is the penalty that you must pay the government if you do not buy healthcare under the Individual Mandate a tax or a penalty? A tax is not always a tax and a penalty is not always a penalty. If it is a tax different constitutional questions arise, as does the question of whether under the Anti-Injunction Act, which prohibits the Court from hearing cases challenging certain taxes before they go into effect (and here the healthcare law doesn’t go into effect until 2014), applies. If the Individual Mandate is found unconstitutional, there is also the question of whether the remaining constitutional parts of the law may be severed from the unconstitutional parts, thus keeping part of the healthcare act alive. That question depends on how integral the Individual Mandate is to the law as a whole. And, of course, there is the all time favorite question: may Congress force people to eat brocolli?
