Council News

March 15, 2012

Panel consensus: Supreme Court will uphold ACA (Healthcare Finance News)

Panel consensus: Supreme Court will uphold ACA (Healthcare Finance News)
by Larry McClain | Mar 15, 2012

NASHVILLE – In a panel discussion at the Nashville Health Care Council, one veteran Washington journalist – along with think-tank analysts and an insurance executive – predicted that the Supreme Court is likely to uphold all provisions of the Affordable Care Act this spring.

The court has a range of options, not just total affirmation or rejection of the complete act. The justices will hear arguments on the “severability” of the individual mandate from other provisions in the legislation – and will weigh the constitutionality of Medicaid expansion.

The court will also decide whether healthcare reform is protected by the Anti-Injunction Act, an 1867 law, which bars courts from striking down tax laws before they take effect. If so, the court could elect to delay any decision until 2015, when penalties can be imposed on individuals refusing to buy health insurance.

“It’s possible that the court might ‘kick the can’ until 2015, but I don’t think that’s likely,” said Lyle Denniston, dean emeritus of the U.S. Supreme Court press corps. “I think the issues being argued in late March are too important to be delayed. There are two powerful narratives at work: one which says that healthcare reform is just another form of regulated interstate commerce, the other which frames it as an issue of individual liberty.”

“Striking Medicaid expansion would be a far greater surprise to the financial markets than striking the individual mandate,” said Paul Heldman, senior analyst for health policy at Potomac Research Group. “If that were to occur, the players with the most to lose would be the managed care companies.”

When the court announces its decision – widely expected in June – both political parties are prepared to capitalize, regardless of the outcome.

“If the individual mandate is struck down, Republicans would be jubilant,” said Tevi Troy, senior fellow at the Hudson Institute. “But it would mobilize the Democratic base to reelect President Obama, in the hopes he could nominate judges who would shift the court’s balance. If the individual mandate is upheld, that could likewise galvanize the GOP base in an effort to elect a Republican president.”

The insurance industry is worried about the consequences of severing the individual mandate from the rest of the legislation. “If that were to happen, insurers would start fleeing the market, premium prices would go up, and there would be a lot of instability,” said Tony Hullender, senior vice president of BlueCross Blue Shield of Tennessee.

The Obama administration is reasonably confident that all provisions of the act will be upheld. “The Justice Department had the option to delay this case, and they chose not to do so,” said Troy.

“A lot will depend on Justice Kennedy’s vote,” said Denniston. “He’s the court’s most respected voice on federalism. There are four solid ‘yes’ votes already, so if Kennedy sides with them, the law will be upheld.”

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