American Society of Hematology

Supreme Court to Hear Challenge to Health Reform Law

Published on: November 17, 2011

The Supreme Court has decided it will review legislation passed in 2010 to overhaul the nation's health care system, promising a high-profile hearing on the question dominating American politics: the constitutional limits of the federal government's power.

Next March, around the second anniversary of the act's passage, the court will hear arguments in the case, taking on the role of constitutional referee between those who see the law as a trespass on individual and states' rights and those who consider it an extension of a safety net to Americans regardless of where they live or work.

A ruling on whether the Constitution gives Congress the power to require nearly every American to obtain health insurance or pay a penalty will likely be the court's highest-profile decision since Bush v. Gore ended the presidential contest of 2000.

As a mark of the case's importance, the justices will hear a record five-and-a-half hours of oral arguments on the constitutional question and related issues.

The court will consider:

  • Whether Congress was acting within its constitutional powers by requiring all Americans to have at least a basic form of health insurance by 2014. Those who do not will be required to pay a penalty on their 2015 income tax returns.
  • Whether other parts of the law can go forward if the "individual mandate" is found unconstitutional. Lower courts have differed on the question. The administration says the law's more popular features cannot work financially without the mandate that all Americans join the system.
  • Whether Congress is improperly coercing states to expand Medicaid, the subsidized health-care program for the poor and disabled.
  • Whether the issue is even ripe for deciding. Some lower-court judges have said that the penalty paid for not having insurance is the same as a tax and, under the federal Anti-Injunction Act, cannot be challenged until someone has to pay it in 2015.

How the court rules on the case is difficult to predict, but the immediate impact of a Supreme Court decision in 2012 as the presidential election intensifies will be political.

Upholding the law will be seen as vindication for President Obama's approach to governing and support for the president's judgment. If the Supreme Court strikes down the entire law, however, it will be validation for Republicans who have opposed the law from the beginning.

A mixed verdict would create its own problems. The court could strike down only the insurance mandate, leaving the rest of the law in place. That includes a Medicaid expansion expected to help about 16 million uninsured people, and a prohibition on insurers turning away people with pre-existing health problems or charging them more.

The demise of the mandate to carry coverage would create a real crisis for the insurance industry. Insurers may be forced to accept patients who apply after getting sick, but at the same time deprived of a larger pool of insured people over which to spread their costs.

Meanwhile, Speaker of the House John Boehner (R-OH) has said he remains committed to repealing the overhaul and replacing it with a Republican plan regardless of the Supreme Court ruling.

The administration similarly remains defiant. Publicly, officials say they're confident the law's plan for covering the uninsured will be upheld. Privately, there's a Plan B: If the court strikes down the law's unpopular linchpin — the so-called individual mandate requiring most Americans to carry health insurance — the administration would take whatever's left and try to put that in place. That includes a major expansion of Medicaid for low income people, a host of new rules for insurance companies, and cuts for hospitals, drug companies and other providers serving Medicare recipients.

Oral arguments will likely be held over one or two days, with a ruling expected before the court recesses in late June 2012. However, considering the politics at stake, the issue could wind up back in Congress to legislate.

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