Lake County News - Supreme Court Ruling On Health Care Law Clears Way For Rollout To Take Place In 2014
June 29, 2012
By Elizabeth Larson
A much-anticipated Thursday ruling by the U.S. Supreme Court upheld the federal Affordable Care Act, a law that's anticipated to have far-reaching impacts for the nation.
The decision means that the rollout of the landmark health care legislation will go forward in 2014, as originally planned.
The court affirmed the right of Congress to impose the “individual mandate” - the requirement for individuals to purchase insurance or else face penalties.
However, the court found unconstitutional the requirement for states to expand their Medicaid coverage under threat of losing federal funds. As a result, there must be the opportunity for states to opt out of participating.
On Thursday afternoon President Barack Obama said that in upholding the law, the Supreme Court “reaffirmed a fundamental principle that here in America - in the wealthiest nation on Earth - no illness or accident should lead to any family's financial ruin.”
Obama's opponent in this year's presidential election, Republican Mitt Romney, has promised to issue an executive order on his first day in office to begin the process of granting Affordable Care Act waivers to all 50 states, and said he will work with Congress to repeal the legislation as quickly as possible.
California Attorney General Kamala Harris - who in January led 10 states in submitting briefs asking the Supreme Court to uphold the Affordable Care Act - called the decision a “historic victory” for Californians, the country and Obama.
“The Affordable Care Act repairs a healthcare system badly in need of reform and ensures that every American has access to affordable health care,” Harris said in a statement issued by her office. “We never doubted the constitutionality of this law, and it is already making a difference in the lives of millions of Californians.”
Congressman Mike Thompson (D-St. Helena), who represents Lake County in the House of Representatives, said the legislation will save money and lives.
“By 2014, virtually all of the law will go into effect, making even more improvements to our health care system,” he said in a written statement.
More than 32 million people who are currently uninsured will gain access to affordable coverage, said Thompson, adding that the law will put an end to the hidden taxes that all insured individuals currently pay for emergency room visits by people without insurance.
He said women will no longer be charged substantially higher premiums than men for the same coverage, and being a woman can no longer be treated as a “pre-existing condition” by insurance companies.
“Reforming our health care system is an ongoing process that began with the passage of this bill,” Thompson said. “It is an important first step towards making quality, affordable health care a reality for all Americans. In the months and years ahead, we need to put politics aside, focus on the facts and work together to further improve our nation's health care system. By building on the reforms made in the Affordable Care Act, we can make sure every American can afford to go to the doctor.”
Obama said for those 250 million Americans who already have health insurance, the law “will only make it more secure and more affordable.”
Insurance companies will not be able to impose lifetime limits on the amount of care people receive, drop sick people from coverage or hike premiums for no reason, the president said. Free preventive care also will be required.
The Affordable Care Act allows young adults under the age of 26 to stay on their parent's health care plans and gives seniors prescription drug discount. There also are rebates for people whose insurance companies spent too much on administrative costs and CEO bonuses.
Resolving the legal challenges
Beginning in 2014, those who don't purchase health insurance in compliance with the law's mandate must make a “shared responsibility payment,” or a penalty which will be paid to the IRS along with income taxes.
That was a key point of contention in the case that went before the U.S. Supreme Court, as was the law's requirement that states expand their Medicaid coverage.
The National Federation of Independent Business, joined by 26 states and several individuals, brought the suit. The full decision may be seen below.
According to the Supreme Court's decision, “the Court of Appeals for the Eleventh Circuit upheld the Medicaid expansion as a valid exercise of Congress's spending power, but concluded that Congress lacked authority to enact the individual mandate. Finding the mandate severable from the Act's other provisions, the Eleventh Circuit left the rest of the Act intact.”
Chief Justice John Roberts delivered the court's opinion, upholding the individual mandate based on the conclusion that the penalty for not purchasing insurance was a tax that was within Congress' power to impose under the U.S. Constitution's Taxing Clause.
“Put simply, Congress may tax and spend. This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate. The Federal Government may enact a tax on an activity that it cannot authorize, forbid,or otherwise control,” the decision explained.
The court also considered the Affordable Care Act's requirement that states increase the number of individuals they cover under Medicaid - to include all individuals under the age of 65 with incomes below 133 percent of the federal poverty line - or face loss of federal funds.
Congress' financial inducement to comply is “a gun to the head,” the court wrote.
“The Court today limits the financial pressure the Secretary may apply to induce States to accept the terms of the Medicaid expansion,” Roberts explained. “As a practical matter, that means States may now choose to reject the expansion; that is the whole point. But that does not mean all or even any will. Some States may indeed decline to participate, either because they are unsure they will be able to afford their share of the new funding obligations,or because they are unwilling to commit the administrative resources necessary to support the expansion. Other States, however, may voluntarily sign up, finding the idea of expanding Medicaid coverage attractive, particularly given the level of federal funding the Act offers at the outset.”
In a dissenting opinion, Justices Antonin Scalia, Samuel Alito, Clarence Thomas and Anthony Kennedy held that both key points of the legislation made it unconstitutional.
In particular, they suggested that while they don't doubt “that the buying and selling of health insurance contracts is commerce generally subject to federal regulation,” by requiring all citizens to buy an insurance contract Congress is directing “the creation of commerce.”
The dissenting justices also claimed that the individual mandate threatens the constitutional order “because it gives such an expansive meaning to the Commerce Clause that all private conduct (including failure to act) becomes subject to federal control, effectively destroying the Constitution's division of governmental powers.”
As for the Medicaid requirement, quoting previous case law, the dissenting justices opined, “Coercing States to accept conditions risks the destruction of the ‘unique role of the States in our system,'” adding, that the Constitution “‘has never been understood to confer upon Congress the ability to require the States to govern according to Congress' instructions.'”
Next steps for citizens, employers
One of the big questions for most people with respect to the law is, what's next?
“The next big thing really is going to be 2014, when a lot of this kicks in,” said Professor Stephen Shortell, dean of the University of California, Berkeley's School of Public Health.
In a Thursday afternoon interview with Lake County News, Shortell said state health insurance exchanges, which will assist people in purchasing the required insurance, will start in 2014.
One of the key issues is the ability to develop the exchanges. “The good news for California is we're leading the pack,” Shortell said.
Shortell said one of the big challenges for California's health care exchange is getting reliable information out to citizens.
In doing so, the exchange must overcome language barriers for Latino and other ethnic populations, and cultural barriers for groups including African Americans, he explained.
The California health exchange also is working on making signing up easy for people, whether they live in urban areas or rural areas like Lake County, Shortell said.
Shortell said he thinks there are many misconceptions about the legislation.
“It's complex, it's sweeping,” he said.
“I think people aren't aware as much as they might be of the benefits, particularly people with chronic illness,” he said.
Shortell added, “The other big barrier is just the political partisanship that you saw played out.”
That political aspect, said Shortell, is the biggest disappointment from his personal vantage point.
The county's largest employer, the county of Lake, already is working to implement the new rules.
In March the Board of Supervisors appointed a task force to report back to the board with policy recommendations on how to fulfill the health care law's requirements, as Lake County News has reported.
Interim County Administrative Officer Matt Perry told Lake County News that the task force is continuing to work out the requirements, which will include providing health insurance to part-time, extra-help employees.
He said the county already provides such coverage to employees who work at least half-time.
Perry said the task force has met a few times so far, and is considering how to reduce the county's exposure to penalties while bringing it into full compliance.
The decision means that the rollout of the landmark health care legislation will go forward in 2014, as originally planned.
The court affirmed the right of Congress to impose the “individual mandate” - the requirement for individuals to purchase insurance or else face penalties.
However, the court found unconstitutional the requirement for states to expand their Medicaid coverage under threat of losing federal funds. As a result, there must be the opportunity for states to opt out of participating.
On Thursday afternoon President Barack Obama said that in upholding the law, the Supreme Court “reaffirmed a fundamental principle that here in America - in the wealthiest nation on Earth - no illness or accident should lead to any family's financial ruin.”
Obama's opponent in this year's presidential election, Republican Mitt Romney, has promised to issue an executive order on his first day in office to begin the process of granting Affordable Care Act waivers to all 50 states, and said he will work with Congress to repeal the legislation as quickly as possible.
California Attorney General Kamala Harris - who in January led 10 states in submitting briefs asking the Supreme Court to uphold the Affordable Care Act - called the decision a “historic victory” for Californians, the country and Obama.
“The Affordable Care Act repairs a healthcare system badly in need of reform and ensures that every American has access to affordable health care,” Harris said in a statement issued by her office. “We never doubted the constitutionality of this law, and it is already making a difference in the lives of millions of Californians.”
Congressman Mike Thompson (D-St. Helena), who represents Lake County in the House of Representatives, said the legislation will save money and lives.
“By 2014, virtually all of the law will go into effect, making even more improvements to our health care system,” he said in a written statement.
More than 32 million people who are currently uninsured will gain access to affordable coverage, said Thompson, adding that the law will put an end to the hidden taxes that all insured individuals currently pay for emergency room visits by people without insurance.
He said women will no longer be charged substantially higher premiums than men for the same coverage, and being a woman can no longer be treated as a “pre-existing condition” by insurance companies.
“Reforming our health care system is an ongoing process that began with the passage of this bill,” Thompson said. “It is an important first step towards making quality, affordable health care a reality for all Americans. In the months and years ahead, we need to put politics aside, focus on the facts and work together to further improve our nation's health care system. By building on the reforms made in the Affordable Care Act, we can make sure every American can afford to go to the doctor.”
Obama said for those 250 million Americans who already have health insurance, the law “will only make it more secure and more affordable.”
Insurance companies will not be able to impose lifetime limits on the amount of care people receive, drop sick people from coverage or hike premiums for no reason, the president said. Free preventive care also will be required.
The Affordable Care Act allows young adults under the age of 26 to stay on their parent's health care plans and gives seniors prescription drug discount. There also are rebates for people whose insurance companies spent too much on administrative costs and CEO bonuses.
Resolving the legal challenges
Beginning in 2014, those who don't purchase health insurance in compliance with the law's mandate must make a “shared responsibility payment,” or a penalty which will be paid to the IRS along with income taxes.
That was a key point of contention in the case that went before the U.S. Supreme Court, as was the law's requirement that states expand their Medicaid coverage.
The National Federation of Independent Business, joined by 26 states and several individuals, brought the suit. The full decision may be seen below.
According to the Supreme Court's decision, “the Court of Appeals for the Eleventh Circuit upheld the Medicaid expansion as a valid exercise of Congress's spending power, but concluded that Congress lacked authority to enact the individual mandate. Finding the mandate severable from the Act's other provisions, the Eleventh Circuit left the rest of the Act intact.”
Chief Justice John Roberts delivered the court's opinion, upholding the individual mandate based on the conclusion that the penalty for not purchasing insurance was a tax that was within Congress' power to impose under the U.S. Constitution's Taxing Clause.
“Put simply, Congress may tax and spend. This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate. The Federal Government may enact a tax on an activity that it cannot authorize, forbid,or otherwise control,” the decision explained.
The court also considered the Affordable Care Act's requirement that states increase the number of individuals they cover under Medicaid - to include all individuals under the age of 65 with incomes below 133 percent of the federal poverty line - or face loss of federal funds.
Congress' financial inducement to comply is “a gun to the head,” the court wrote.
“The Court today limits the financial pressure the Secretary may apply to induce States to accept the terms of the Medicaid expansion,” Roberts explained. “As a practical matter, that means States may now choose to reject the expansion; that is the whole point. But that does not mean all or even any will. Some States may indeed decline to participate, either because they are unsure they will be able to afford their share of the new funding obligations,or because they are unwilling to commit the administrative resources necessary to support the expansion. Other States, however, may voluntarily sign up, finding the idea of expanding Medicaid coverage attractive, particularly given the level of federal funding the Act offers at the outset.”
In a dissenting opinion, Justices Antonin Scalia, Samuel Alito, Clarence Thomas and Anthony Kennedy held that both key points of the legislation made it unconstitutional.
In particular, they suggested that while they don't doubt “that the buying and selling of health insurance contracts is commerce generally subject to federal regulation,” by requiring all citizens to buy an insurance contract Congress is directing “the creation of commerce.”
The dissenting justices also claimed that the individual mandate threatens the constitutional order “because it gives such an expansive meaning to the Commerce Clause that all private conduct (including failure to act) becomes subject to federal control, effectively destroying the Constitution's division of governmental powers.”
As for the Medicaid requirement, quoting previous case law, the dissenting justices opined, “Coercing States to accept conditions risks the destruction of the ‘unique role of the States in our system,'” adding, that the Constitution “‘has never been understood to confer upon Congress the ability to require the States to govern according to Congress' instructions.'”
Next steps for citizens, employers
One of the big questions for most people with respect to the law is, what's next?
“The next big thing really is going to be 2014, when a lot of this kicks in,” said Professor Stephen Shortell, dean of the University of California, Berkeley's School of Public Health.
In a Thursday afternoon interview with Lake County News, Shortell said state health insurance exchanges, which will assist people in purchasing the required insurance, will start in 2014.
One of the key issues is the ability to develop the exchanges. “The good news for California is we're leading the pack,” Shortell said.
Shortell said one of the big challenges for California's health care exchange is getting reliable information out to citizens.
In doing so, the exchange must overcome language barriers for Latino and other ethnic populations, and cultural barriers for groups including African Americans, he explained.
The California health exchange also is working on making signing up easy for people, whether they live in urban areas or rural areas like Lake County, Shortell said.
Shortell said he thinks there are many misconceptions about the legislation.
“It's complex, it's sweeping,” he said.
“I think people aren't aware as much as they might be of the benefits, particularly people with chronic illness,” he said.
Shortell added, “The other big barrier is just the political partisanship that you saw played out.”
That political aspect, said Shortell, is the biggest disappointment from his personal vantage point.
The county's largest employer, the county of Lake, already is working to implement the new rules.
In March the Board of Supervisors appointed a task force to report back to the board with policy recommendations on how to fulfill the health care law's requirements, as Lake County News has reported.
Interim County Administrative Officer Matt Perry told Lake County News that the task force is continuing to work out the requirements, which will include providing health insurance to part-time, extra-help employees.
He said the county already provides such coverage to employees who work at least half-time.
Perry said the task force has met a few times so far, and is considering how to reduce the county's exposure to penalties while bringing it into full compliance.