The Lookout

The Supreme Court’s health care reform case–What to expect

Liz Goodwin
The Lookout

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The U.S. Supreme Court building, where oral arguments begin Monday. (J. Scott Applewhite, AP)

On Monday, the Supreme Court begins hearing oral arguments in one of the most politically charged cases in years. Attorneys representing 26 states, most led by Republican governors, and the National Federation of Independent Businesses (NFIB) will spar with Justice Department lawyers over what President Obama called his proudest achievement--health care reform.

Challengers will argue that requiring all Americans to buy health insurance is an illegal and unprecedented act of government overreach, while the Justice Department will counter that it's a routine exercise of Congress' power to regulate interstate commerce. The Supreme Court will most likely hand down its decision in late June, right in the middle of the heated 2012 presidential election.

Here's our handy guide to the six hours of arguments which will take place over three days.

Day One: Is it too early for the Supreme Court to decide on the law?

If you're looking for fireworks between the opposing camps, you may want to come back on Tuesday.

That's because on Monday, government lawyers and their opponents will start off on the same side. Both will fend off the argument from an outside attorney that the 1867 Anti-Injunction Act--which prohibits individuals from challenging a tax in court before it is enforced--prevents the Supreme Court from deciding on health care reform's legality before 2015.

The challengers--the NFIB and 26 states--will retort that the health care mandate penalty is not a tax and thus doesn't fall under the Anti-Injunction Act. They also argue that they are not suing over the monetary penalty, but over the mandate itself. The Justice Department uses a more complex legal argument to oppose the Act's application, since it doesn't want to rule out the possibility that the penalty, which will be collected by the IRS, is a kind of tax.

Though some legal experts have said they'd be surprised if the Court decided to delay ruling on the law, it's not an impossibility. Long-time court watcher Lyle Denniston wrote on SCOTUSblog that the Anti-Injunction Act gives the Court "an entirely respectable way to put off the searing constitutional controversy over the individual mandate." Justices could claim a minimalist approach, and dodge making a ruling in a highly-politicized election year.

Day Two: Is it legal for the government to require people to buy health insurance?

On Tuesday, government lawyers will defend the heart of the health care law--the individual mandate. The government says Congress is well within its rights under the Commerce Clause of the Constitution to compel Americans to buy health insurance. The courts have repeatedly ruled that Congress can regulate interstate economic activity, and the government argues health care transactions are a huge chunk of the U.S. economy. As a back-up, the government also says that the mandate is allowable under Congress' power to tax. (This is interesting, since the Obama administration was careful never to refer to the no-insurance penalty as a tax, given the political unpopularity of taxes.)

The challengers' attorney, Paul Clement, will argue that mandating insurance is not regulating existing economic activity, but rather forcing citizens to engage in economic activity in the first place. Georgetown Law Professor Randy Barnett, who is representing the NFIB, said in an interview with Yahoo News that if Congress can compel citizens to buy insurance, it can compel citizens to buy any good--a car or a pair of shoes. And the penalty for not doing so could potentially be more than a fine. "They could actually send you to jail for a product they want you to buy," he said.

The government counters that everyone will seek health care at some point, so the law isn't compelling you to enter the market, but rather regulating a market you're already in. Every year, hospitals spend tens of billions of dollars on medical care not covered by insurance. The law seeks to penalize people who are seeking a "free ride" by not buying insurance, they argue. (The law exempts some from buying insurance for religious reasons or financial hardship. And the law also excludes an estimated 7 million uninsured illegal immigrants.)

Legal experts--including conservative-leaning ones, like former Reagan Solicitor General Charles Fried--think that the Justices will most likely uphold the mandate as a proper use of power under the Commerce Clause. Eighty-five percent of legal experts surveyed by the American Bar Association also said they believe the law will be upheld. More skeptical Court-watchers, however, point out that in the 2010 campaign finance decision Citizens United, the Court also went against precedent for a 5-4 decision that allowed unlimited corporate donations in elections. So it's anyone's game.

Day Three: If we strike down the mandate, will anything else survive?

On Wednesday morning, the court will consider which, if any, other parts of the health care law should be struck down if the individual mandate is ruled unconstitutional.

The Justice Department will argue that if the individual mandate is struck down, the rules requiring insurance companies to accept all sick customers and to limit their premium hikes must also go. The only way to make insurance companies take sick customers is by requiring everyone to have health insurance, since that spreads the risk and cost, they argue. The rest of the sweeping law's provisions, including the expansion of Medicaid to all low-income people and the new state health insurance exchanges, would stay in effect.

The states take an all-or-nothing approach, arguing that the entire health care law must go if the individual mandate is struck down because the law cannot function without all of its parts. The Court has appointed an outside lawyer to argue that the rest of the law can survive if the mandate is struck down.

A major issue the Justices will consider is the intent of Congress when it passed the bill. Congress didn't explicitly spell out which parts of the law could exist on their own, so the Court must be careful not to overstep its authority in striking down lawful parts of the bill.

A second issue, to be heard in the afternoon, is whether the expansion of Medicaid to all low-income people in 2014 is an unconstitutional federal government coercion of the states. The law is expected to add about 16 million new people to Medicaid rolls in 2014, when everyone living near the poverty line (defined as $14,000 or less in yearly income for an individual) will qualify. Currently, states decide who receives Medicaid, but usually only low-income people with children qualify. The federal government can attach strings to grants it hands out because states can refuse the money if they don't want to cooperate.

But the 26 states argue that the Medicaid provision amounts to coercion--that they're essentially being forced to take the money and agree to the terms. None of the lower courts that have heard this challenge have ruled in favor of the states on this issue, and the Supreme Court has never struck down a federal spending bill on coercion grounds, according to Denniston.

Court Precedents--Guns, Wheat, Marijuana and Violence Against Women

Supreme Court Justices are not always bound by how it has ruled on laws in the past, but previous decisions are very important. As Stanford Law Professor Pam Karlan told Politico, the court precedents we're likely to see cited next week are about "wheat, dope, sex fiends and gun-toting teenagers." They also offer a window into how the Court has interpreted Congress' power to regulate interstate economic activity under the Commerce Clause in the past.

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A helpful precedent for the government is the 1942 case Wickard v. Filburn, when the Court said wheat farmer Roscoe Filburn could not harvest wheat above the federal quota, which was set to keep prices high. Filburn argued that he was only using the excess wheat on his own farm, not selling it, but the Court countered that his extra wheat still affected the national market, since Filburn didn't have to buy wheat or set aside part of his quota for his own use.

Also potentially  helpful to the government is Gonzalez v. Raich, when the Court ruled in 2005 that two women were not allowed to grow marijuana for their own use even though pot is legal in their state of California. Conservative Justice Antonin Scalia wrote that Congress can regulate even "noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce." He argued that marijuana is always an "instant" away from the national market, and thus under Congress' control.

In 1995 and 2000, the Court scaled back interpretations of the Commerce Clause's power, a trend the challengers hope to continue with this upcoming ruling. The Court ruled that a federal law about violence against women and one mandating a gun-free zone around schools intruded into states' rights to police themselves without offering up a legitimate economic reason to do so.

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