The Supreme court rules on the Affordable Care Act

Article first published as The Supreme court rules on the Affordable Care Act on Technorati.

In a 5 to 4 ruling with Chief Justice Roberts being the deciding vote, most of the Affordable Care Act (ACA) was upheld. The court ruled that the act's individual mandate was constitutional under congressional tax powers. The ruling largely ignores the argument that the individual mandate is a violation of the commerce clause.

The primary argument for opponents of the ACA focused on the individual mandate to purchase health insurance. They held that congress had overstepped its authority by requiring instead of regulating commerce. Opponents also argued that the purchase of health insurance was a personal choice.

Proponents of the ACA pointed to the right of congress to levy taxes and enforce commerce. Examples of which varied from the individual income tax to the EPA.

However, It did curtail a provision to sanction states that did not expand their Medicaid programs to include the poor under the ACA. In effect creating a toothless mandate since the federal government is prohibited from taking punitive measures against states who refuse to comply.

With this ruling, individuals without medical coverage, (beginning in 2014) can be assessed a tax that begins at $95 and increases every year until 2016 where a formula indexed to inflation is used.

What isn't addressed in the court's ruling were core structural issues with the ACA. Specifically, the Medicaid expansion provisions of the act now effectively void and the vague language concerning required coverage features.

Core to the argument of opponents of the ACA is the government requirement of an individual to be compelled to engage in commerce with a private commercial entity. Today's ruling ignores that argument in favor of the stronger argument of congress' right to tax. The language of the ACA mandate does treat the penalty as a tax and not a transaction.

Even proponents of the ACA admit the program is flawed but like the Medicare part D prescription program from a decade ago they claim it's better than the alternative.

It's not inconceivable that the future may hold low cost minimum coverage health plans with few if any benefits under the current ACA language. Such plans would not be unlike the minimum coverage auto insurance policies commonly seen in states that require auto insurance to register a vehicle.

Little attention has been given to what constitutes the minimum coverage outside of actuarial values concerning deductible and out of pocket expenses based on income. While pre-existing conditions are largely curtailed specifics of what constitutes the features of an effective health plan are vague at best. Likely part of the compromise made to garner insurance industry support, such concerns appear to be left to the insurer.

Proponents of the ACA have called today's ruling a victory for the President while the opposition has vowed to defeat it using legislative measures.

Obamacare as the ACA is commonly referred to by detractors will continue to be hotly debated in the coming months and is likely to be the major political issue of the coming Presidential election.

Supreme Court Hears First Arguments on the Affordable Care Act

Article first published as Supreme Court Hears First Arguments on the Affordable Care Act on Technorati.

The United States Supreme Court began hearing arguments today concerning the constitutionality of the Affordable Care act.  This is the beginning of a 3 day process where the 9 justices will hear arguments related to whether the act violates constitutional protections. 

Today's 90 minute oral arguments  concerned whether or not the Supreme Court could even hear the case.

At the center of the arguments was the definition of a tax as it pertained to Supreme Court jurisdiction  and whether the penalty for non-compliance constitutes one .  If the court finds it is and agrees with the 4th circuit court's lower ruling that the penalty is a tax based on using the IRS as a collection mechanism then all further arguments could cease.

That end would come about because under the Tax Anti-Injunction Act of 1867 or AIA, a challenge to taxation can't be heard until the tax has actually been levied.  Since the Affordable Care Act's mandatory compliance provisions don't come into play till 2014, the challenge would have to wait till the 2015 tax filing season when the first penalties had been assessed.

Arguing that the AIA was applicable to the case were Gregory Katsas  Former Bush Administration justice department official and Robert A. Long former assistant to the United States Solicitor General .  Arguing the federal Government's position that the penalty is not a tax was U.S. Solicitor General Donald Verrilli.

The Tax Anti-Injunction Act came about to prevent plaintiffs in a federal tax case from receiving benefits derived from not paying the assessment while the case was ongoing.  Instead the tax is expected to be collected when assessed with plaintiffs then filing for refund.  Suit can then be filed if the IRS denies the refund which would provide the necessary foundation to bring a challenge to the tax law itself.

Tuesday's scheduled oral arguments will consider the constitutionality of the individual mandate itself.  Wednesday morning's oral arguments are centered around whether the rest of the Affordable Care Act is legally viable if the mandate is stuck down. 

The final arguments are scheduled to be heard on Wednesday afternoon and concern the challenge made by 26 states to the act's Medicaid provision.  This part of the Affordable Care Act would force expansion of the state run Medicaid programs to individuals not currently covered by the program.  The state's argument claims the provision would negatively impact budgets and amount to an debilitating federal mandate.