On March 26, 2012, the U.S. Supreme Court began three days of hearings on the constitutionality of President Barack Obama's health care overhaul, the Patient Protection and Affordable Care Act. The landmark legislation was signed into law more than two years ago.
An expert in health law, Professor Patricia Gray, Director of Research in the Health Law & Policy Institute at the University of Houston Law Center, served in the Texas House of Representatives from 1992 to 2003. As a member of the legislature, Gray received many awards for her work on health care and environmental issues. She is credited with passage of the Children's Health Insurance Plan that provides health insurance for Texas children. She also managed legislation that simplifies access to health care for poor families and protects health insurance for women.
Bringing her unique perspective to the table, Gray took a few minutes to answer questions about the Affordable Care Act, the hearings, and what is at stake.
What will both sides argue?
The Court has divided the arguments for and against the Affordable Care Act into four parts.
The first part of the arguments will consider whether the case is ready for consideration. The basis of this dispute is found in a 19th century statute which bars federal courts from striking down tax law provisions until that have actually taken effect. The “tax law provision” in dispute in the Affordable Care Act (ACA) is the penalty that would be enforced against individuals who do not purchase health insurance by the end of 2014. The penalty is to be collected through the IRS when the individual files his or her income tax. Although both sides in this case say the Anti-Injunction Statute does not apply, at least one lower appellate decision raised the issue, so the Supreme Court appointed its own friend of the Court to brief this issue. If the Court finds that the Anti-Injunction Act does apply in this case, it will likely defer consideration of whether the individual mandate to purchase insurance is constitutional until that part of the Act is ready to implement. If the Court finds the Anti-Injunction Act does not apply, then the Court will proceed to rule on both the individual mandate to purchase requirement and the Medicaid expansion requirement in the legislation, an issue opposed by many states as being potentially too costly for the states to maintain. Finally, if the Court determines that either the mandate to purchase or the Medicaid expansion are unconstitutional, then the Court must decide whether other parts of the ACA will remain in law.
What is at stake in this case?
The Affordable Care Act is a complicated piece of legislation that attempts to expand health care access, improve the quality of care patients receive through better coordination among health care providers, and to reduce—or at least slow -- the increasing costs of health care. Insurers are concerned that without the individual mandate to purchase, people have no incentive to acquire health insurance until they are already sick. This behavior would make insurance more expensive for everyone and might lead some insurers to stop selling policies. If the Court rules that the individual mandate is unconstitutional, then the provisions related to guaranteed issue, no lifetime caps on coverage, and tax credits to help businesses acquire health insurance for their employees will be very hard to sustain.
Also at stake is the ability of Texas, with nearly one-fourth its residents uninsured, to increase the number of insured persons through expansion of the Medicaid program – albeit at a price. Right now, Texas’ Medicaid coverage focuses on children, pregnant women, limited coverage for families receiving Temporary Assistance for Needy Families (TANF), elderly persons whose income falls below certain poverty levels, and certain blind and disabled persons. Texas Medicaid does not provide any coverage for childless adults who do not fit into one of the above categories, no matter how poor. The Medicaid expansion under the ACA will expand Medicaid coverage to all adults or families with incomes under 133% of the Federal Poverty Level, a gross yearly income of about $14,854 for an individual or $30,657 for a family of four based on 2012 FPL determinations. Although most of this expansion will be paid for with federal tax dollars (some of which come from Texas), a small percentage but large dollar amount will have to come from Texas taxpayers.
What are the most controversial elements of the Affordable Care Act?
The two most controversial aspects of the Affordable Care Act are the individual mandate to purchase and the Medicaid expansion requirements for the states.
Those opposed to the individual mandate to purchase insurance argue that the Commerce Clause of the U. S. Constitution does not require that an individual be compelled to engage in a commercial activity so that he then becomes subject to regulation under the Commerce Clause. Those defending the individual mandate say that the cost shifts of caring for those without health insurance coverage to those with health insurance coverage, combined with the discriminatory practices by insurers to exclude people from coverage, are among the strongest examples of the commercial impacts of health insurance coverage—or the lack thereof—to justify the constitutionality of a mandate under the Commerce Clause. They also say that since Congress clearly has the power to regulate health insurance as commerce and to require insurers to sell policies even to the unhealthy, to make sure that system doesn’t collapse, it is “necessary and proper” for Congress to require healthy persons to have health insurance.
If upheld, what impact will it have?
Most states, the health insurance industry, most hospitals and individual medical providers, have already started working to implement the provisions of the law that impact them. Those who have been taking a wait and see attitude will be scrambling to catch up. Texas, for example, has declined to begin work on the state health insurance exchange requirements to help consumers find affordable care. By declining to set up a state run program, Texas is allowing the federal government to set up and run the program for them. Critics argue that this cedes authority that Texas could have maintained to tailor a program that best suits Texas’ needs. Others argue that sufficient information is available through Texas’ Office of Public Insurance Counsel to help individuals who lack coverage under a group plan to find affordable insurance.
The financial impact of the individual mandate and the rest of the Affordable Care Act is likely to be considerable. The most recent estimates of the Congressional Budget Office say the Act will increase the budget deficit by over $1 trillion over the next 10 years. Much of this estimate is speculative, however, and depends on difficult to predict behavior by insurers, employers and consumers in reacting to the major changes in the health insurance market. The number of nonelderly people without health insurance is expected to decline by about 30 million persons, though about 26 million nonelderly residents are expected to remain uninsured. Again, however, these estimates depend on a number of interrelated factors and are unavoidably somewhat speculative.
What will happen if this law is overturned?
Many provisions related to improving coordination of care could continue in some form even without legislation. Congress could, if the extreme partisanship of today’s political climate can be overcome, revisit certain aspects of the Act. For example, some commentators suggest that individuals could face an incentive to purchase health insurance before they become ill, similar to the requirement for Medicare recipients who pay higher premiums if they delay enrollment in Part B coverage if they wait too long to enroll. There could also be even more extensive waiting periods before coverage for pre-existing conditions begins if purchase is delayed.
Losing support for the Medicaid expansion coverage will mean that Texas counties and local hospitals will continue to face the difficulties of dealing with large segments of the population that do not have any insurance coverage, shifting more costs to local taxpayers and those with existing health insurance plans. It will, however, also mean that Texas will not have to find tax money to pay for the costs of Medicaid expansion.
To schedule an interview with Patricia Gray, please contact: Carrie Criado, Executive Director of Communications and Marketing, cacriado@Central.UH.EDU, 713.743.2184; or John Kling, Communications Manager, jtkling@central.uh.edu , 713.743.8298.
