John Garven

The Wall Street Journal (11/26, Bravin, Subscription Publication) reports that the Supreme Court on Monday ordered the Fourth Circuit Court of Appeals to consider several issues the high court left unresolved in its June ruling that upheld the Affordable Care Act. In a move backed by the Justice Department, the court sent a challenge brought by Liberty University back down to the lower court. The challenge is based on a claim that the act’s insurance mandate violates constitutional guarantees of religious freedom and equal protection, arguments rejected by a trial court in 2010. The appeals court ruled that the suit was premature and dismissed it without reviewing the trial court’s ruling.

The Washington Times (11/27, Wetzstein) reports, “The ruling ‘breathes new life’ into the challenge to the Affordable Care Act, said Mathew Staver, founder and chairman of Liberty Counsel, which represents the petitioners. The petitioners are the Christian college Liberty University, and two Christians, Michele Waddell and Joanne Merrill. They are arguing that they do not want to be forced to buy insurance as proscribed by the Affordable Care Act.”

Politico (11/27, Haberkorn, Smith) reports, “The move could open the door for President Barack Obama’s health law to be back in front of the Supreme Court late next year,” but “legal experts say there’s no guarantee that the justices would actually take the case – or that they’d strike down those pieces of the law if they did.” The Supreme Court “responded to a request from Liberty University, one of the groups that sued over the health care law’s individual mandate in 2010. When the court ruled in June that the mandate was constitutional, it dismissed Liberty’s entire lawsuit.”

The Hill (11/27, Baker) “Healthwatch” blog quotes the complaint originally filed by Liberty, which said that the mandates mean the school’s employees “cannot protect their sincerely held religious beliefs against facilitating, subsidizing, easing, funding or supporting abortions.”

In a separate report, Politico (11/27, Cheney) quotes several experts who make it clear that “the window is closing for those who want to bulldoze President Barack Obama’s health law in court.” For example, Randy Barnett, “the Georgetown University law professor who helped construct the Supreme Court argument against the law earlier this year,” has not yet “given up hope,” but acknowledges that “the more Obamacare benefits become available to people, the harder it will be to undo.” Similarly, Virginia Attorney General Ken Cuccinelli, an early detractor of the Affordable Care Act, says that although a “take-the-whole-law-down assault probably doesn’t exist at this point,” there is still “going to be waves of litigation over this because it’s so badly written.”

NBC News (11/26, Williams) notes that the case was handed back to the 4th Circuit Court “with the Obama administration posing no objection.”

The AP (11/27) notes that “Liberty is challenging both the requirement that most individuals obtain health insurance or pay a penalty, and a separate provision requiring many employers to offer health insurance to their workers.”

On this point, the Washington Post (11/27, Kliff) “Wonkblog” reports “it’s hard to know at this point what would happen if these two provisions of the health care law were overturned. Health policy experts don’t tend to consider the employer mandate as crucial to the health law’s success as the individual mandate. The vast majority of employers already provide insurance coverage, with no mandate at all.”

However, Reuters (11/27, Baynes, Stempel) elaborates on Liberty University’s argument, reporting that experts do not expect the case to succeed.

Similarly, the Los Angeles Times (11/27, Savage) writes that despite the opposition’s claim of “new life,” the “order does not suggest, however, that the justices are reconsidering the issue.” Indeed, “many legal experts doubt the new challenge will go far.”

Forbes (11/27, Fisher) writes further on the case’s chances, reporting “assuming the same three judges hear Liberty University’s appeal this time, it is unlikely they will rule in the school’s favor.” Last time, Judge Andre M. Davis “specifically rejected the employer mandate along conventional constitutional grounds, finding that even employers who operate within a single state can be subjected to federal regulations, much as civil-rights laws apply even to local diners and motels.”

Medicaid, our nation’s medical safety-net program for low income individuals turned 47 last week.  It is a state-federal partnership program, meaning that each group shares in its costs using very complicated state-specific formulas.  States are currently under a lot of pressure to expand their Medicaid programs to cover all people with incomes up to 133 percent of the federal poverty level as originally envisioned by PPACA now that the Supreme Court has ruled that the federal government can’t financially penalize states who choose not to expand their programs.

But just as expansion pressure is mounting, so is increasing evidence that shows significant weaknesses in Medicaid’s structure, particularly when it comes to providing poor people with access to health insurance coverage.

Medicaid’s design is a funny one.  The program is generally chock-full of mandatory covered services  and it must cover individuals up to certain state-set levels of income.  However, state program flexibility means that policymakers routinely trim the program when economic times get tough.  They do this in several ways—tightening enrollment requirements, reducing covered services and cutting reimbursement rates to participating medical care providers.  Kaiser Health News reported a couple weeks ago that 13 states are currently in the middle of cutting their programs and that many states cut their programs back last year.  Yet many of these same states are the ones considering the coverage expansion.

Meanwhile, Governors are trying to make decisions about what is the best thing for their states to do and are trying their hardest to get answers about program flexibility from the federal government.  Speaking recently at a meeting of the Bipartisan Policy Center in Washington, DC, CMS Medicaid Director Cindy Mann told the crowd “We know that states are very carefully considering options, and we understand and fully support states doing just that.”  However, this statement came just a week after CMS declined to directly address the 30 questions about the future of Medicaid and Health Insurance Exchanges raised by Republican governors on July 10th.  A couple weeks ago Republican Governors Association Chairman and Virginia Governor Bob McDonnell released another letter to President Obama complaining about the lack of clear information being given to state lawmakers.  The Republican Governors are also angry that instead of a clear timeline for answers that they have been told “more guidance will be issued in the year and a half before the Medicaid eligibility expansion and exchanges begin.”

We actually feel that all of the attention being paid to Medicaid right now might turn out to be a very good thing.  Hopefully policymakers at the state and federal levels will finally come together and look at the structure and financing of this program from a macro level and make some necessary changes, because the program clearly is NOT fiscally sustainable in its current form and structure.

Last Thursday morning the United States Supreme Court (“SCOTUS”) announced its decisions on the four interrelated issues that made up the constitutional challenge to the Patient Protection and Affordable Care Act.

The court decided the individual mandate is a tax and is thereby constitutional, and that the Medicaid expansion is also legal, although its provisions were limited. The entire measure stands as is except that the federal government’s power to terminate states’ Medicaid funds has been reduced.

For purposes of implementation, virtually all of the law and all resulting regulations and deadlines proceed as scheduled.  The only part of the law that will change has to do with the level of funds states may receive based on choices they make relative to their Medicaid programs.

With regard to the constitutionality of the individual mandate, the Justices voted 5 to 4 that Congress was within its authority to require that all Americans have health insurance coverage using its power of taxation.  Justices Roberts, Ginsberg, Breyer, Sotomayor and Kagan voted to uphold the mandate.  Justices Kennedy, Scalia, Alito and Thomas opposed the decision.  The court also ruled that PPACA may allow states to expand their Medicaid programs.  However, in the majority opinion, the Justices made it clear that if states do not want to participate in the PPACA expansion of Medicaid, they can continue to receive their existing level of funding for the rest of the program.

Since SCOTUS voted to uphold the individual mandate and Medicaid expansion provisions of the law, the question of whether or not these provisions of the law are severable is moot. The majority opinion also made it clear that the federal Anti-Injunction Act does not apply because the label “tax” is not controlling.

LifeHealthPro.com published an article last Thursday entitled “PPACA Decision: The PDF, with Interesting Parts Highlighted”, and Allison Bell, the article’s author, was kind enough to highlight, in yellow, some of the most interesting parts of the ruling as well as provide a list of what she thought were portions of special interest.  Visit http://bit.ly/LIb8qX to view this list.

Also, a detailed analysis of the SCOTUS decision, authored by Ernst & Young, the National Association of Health Underwriters’ retained counsel, may be viewed at http://bit.ly/OSpEml.

There is no doubt that the historic ruling will have a profound impact on the upcoming presidential and congressional elections.

This YouTube video is perhaps the most cogent / coherent explanation I have ever heard around the constitutionality of the Affordable Care Act – Is the Affordable Care Act Unconstitutional?

Odds are the Supreme Court will rule on the health reform law next week either on Monday, June 25th or Thursday, June 28th (at 10 am ET either day.  It could be as early as tomorrow (at 10 am ET), or the Court could even decide to extend its current term – which is scheduled to end on June 30th – into early July and issue a decision then.  That being said, conventional wisdom has always been that the SCOTUS decision will be handed down at the very end of this Court term, probably on either the 25th or the 28th. Of course, nobody outside of the Court really knows. As Justice Ruth Bader Ginsburg quipped at a recent conference hosted by the American Constitutional Society, “At the Supreme Court, those who know don’t talk. And those who talk don’t know.”

Here are some perspectives that Court watchers have shared:

• “The justices have already secretly voted…. They met privately as a group just days after the late March arguments, voting preliminarily. Individual justices were assigned to write the one or more opinions, as well as separate dissents…. The Court holds fast to an unofficial but self-imposed deadline to have all draft opinions finished by June 1. They are circulated to colleagues, and subsequent dissents and concurrences must be submitted by June 15. Nothing is final until the decision is released to the public. Votes can and do change at the last minute.” (Tom Goldstein, SCOTUSblog)
• “The opinion could very well run several hundred pages. It could be exceptionally nuanced. And it could be a fractured opinion. Remember, the justices were asked to rule on four different parts of this case…. So expect news to break that the Supreme Court has handed down the decision. But it may not be immediately evident what the justices decided.” (Chad Pergram, Foxnews.com)
• “The length and scope of the Affordable Care Act, the dozens of briefs by the parties with hundreds more from amici, and three days of oral arguments in late March have given members of the Court much to ponder and debate. Transcripts of those oral arguments reveal how thorny these issues are and how difficult it is to discern correct solutions.” (The Health Affairs Blog)
• “Rarely in the high Court’s history has a decision had so much riding on it, for the economy, for the vast health care industry and for the nation’s body politic – from the White House race to the 435 House campaigns…. Groups on both sides have fallen back into a state of nervous anticipation. No one is certain how the Court will rule, or how the politics will shake out in the aftermath.” (Jonathan Weisman and Michael Shear, New York Times)

The case is significant not just because it will affect the future of health care and the health reform law, but because it concerns issues affecting the powers of Congress and the power balance between the federal government and the states.

Below are the four issues the Court is considering. Big picture, the Court is considering three possible scenarios: strike the entire law, partially strike the law, or uphold it as it was passed by Congress and signed by the President.

Of course, after the Supreme Court rules, reactions will pour out from all over. Preparations already are being made. As New York Times writers Jonathan Weisman and Michael Shear said, “In the event that the law is crippled or eviscerated, the contest will be to ensure that the other party is held responsible, not only for the popular provisions that are lost but what comes next for the 46 million Americans still without health insurance.

• Decisions are handed down at 10 a.m. If this one comes Monday, June 25, neither the House nor Senate is expected to be in session, which could mute any immediate response.
• Unless the entire law is thrown out, Republican House leaders say they will quickly force a vote to repeal the law.
• House Democrats are carrying “pocket cards” (talking points) detailing how the reform law has already helped people (e.g.: 86 million have received free preventive care).
• If the entire law is thrown out, Democrats will try to force Republicans to say how they plan to handle the problem of the uninsured.
• House Speaker John Boehner says, “Republicans will not repeat the Democrats’ mistakes. We won’t rush to pass a massive bill the American people don’t support.”
• At the request of Families USA, groups that favor the law met in Washington last week to plan a coordinated response.
• The Romney campaign, the Republican National Committee and congressional campaign offices are assembling a war room.
• The Obama administration continues to say it remains “confident and optimistic” that the Supreme Court will uphold the reform law. “Having said that,” says Health and Human Services Secretary Kathleen Sebelius, “we’ll be ready for Court contingencies.”

Meanwhile, if only the mandate to have health insurance is struck, the trade group America’s Health Insurance Plans will continue its aggressive campaign focused on helping people understand the link between the coverage mandate and other insurance regulations such as guaranteed issue, and the Business Roundtable sent a letter to congressional leaders requesting a “cooling-off” before Congress pursues any legislative response to the ruling.

All I can say is that these are “very interesting times” that we live in.  I mean, who would have thought, for one thing, that to begin with such a game-changing law would have been passed along party lines with the only bipartisan aspect being the opposition to the law, and then to have a majority of the states enjoin in a lawsuit to contest the law’s constitutionality.  Amazing!

Finally, before I forget, the Intrade contract – “The US Supreme Court to rule individual mandate unconstitutional before midnight ET 31 Dec 2012” – has been “rallying” as of late.

The current ask price is $7.51 per share, meaning there is a 75.1% probability of the event occurring.  I have been following Intrade.com since the 2004 presidential election, and for what it is worth there are all kinds of reasons that my brother Jim, an economist, can explain as to why Intrade.com is incredibly accurate and statistically reliable.

If the Supreme Court strikes down all or part of the health reform law, neither side is well prepared with a Plan B.

For one thing, House Democratic officials leaked word last week that there has only been one high-level strategy meeting on what to do with House and Senate leaders and the White House.  A detailed piece in this month’s New Yorker Magazine confirms that while administration officials keep claiming that they are prepared for all eventualities, the administration’s position that the law is constitutional and should be fully upheld has hampered Plan B planning.

Meanwhile, House Republicans have announced that they will have a plan ready in July to reform healthcare regardless of what the Supreme Court does. However, their strategy will be to reform and replace slowly, rather than offering one large comprehensive bill like the Democrats did with PPACA. Pushing back against creating another 2700-page bill may be sound political strategy, but it’s also a political necessity for the GOP as there is no inter-party cohesion around any one healthcare reform proposal

The Christian Science Monitor (6/18, Feldmann) reports, “The political world is on pins and needles, waiting for the Supreme Court to hand down its ruling on President Obama’s sweeping reform of the health-insurance system.  A decision could come as early as Monday. … Publicly, Mr. Obama and his surrogates express confidence that the court will uphold the Affordable Care Act. Implementation is proceeding on schedule, they say. Still, at the White House correspondents’ dinner in April, the president joked: ‘In my first term, we passed healthcare reform. In my second term, I guess I’ll pass it again.’”

The Washington Post (6/18, Rau) reports that “changes that hospitals, doctors and insurers had been moving toward even before” the Affordable Care Act could be “halted” or “hobbled” if the Supreme Court rules parts of the law unconstitutional. The changes “include increasing the role of primary care, especially for low-income patients; forcing hospitals and doctors to work together closely; and reducing pay to hospitals if they don’t meet patients’ expectations or outcome benchmarks set by the government.”

USA Today (6/16, Mullaney) reported, “From Wall Street, the decision’s potential impact on health care – and the health care business – looks huge. Barclays Capital analyst Joshua Raskin says some health insurance stocks might drop 30% if the court throws out the entire law.” The piece notes that “Medical inflation, while moderating, continues to outpace general inflation, driving fiscal problems for states and for Washington. At the same time, health care remains a tough business: Bond-rating agency Moody’s says non-profit hospitals, which control most of the US market, have their lowest revenue growth in 50 years.”

The Washington Times (6/18, Cunningham) says “if the justices uphold the part of the Affordable Care Act requiring insurers to cover patients with pre-existing conditions, insurance companies would suffer a blow, but doctors, hospitals and drugmakers would find themselves with more insured, high-need patients.” But if the reforms are struck down, “healthcare providers could lose out on a lucrative pool of patients they had been counting on under the original deal.”

The House was out of session last week, the Obama administration decided to take a rest from issuing health reform-related regulations, bulletins and guidance, and the Senate was working rather amicably on the FDA user-fee bill.  So what was a bored health policy press to do?  Why start the rumor mill going about the timing of the Supreme Court decision, of course!

Lots of people had themselves convinced that last Thursday, May 24^th, was going to be the big day for the Supreme Court and health reform, but obviously that was not the case.  Here are the facts as we understand them:

• The Supreme Court is a vault, not a sieve like most Washington institutions.  The last credible leak that came out of that place was more than 30 years ago, so there is good reason to believe any rumors you hear about the pending decisions are just that—rumors.
• The Supreme Court issues decisions on Mondays and Thursdays, generally at 10 a.m., so if you hear that a decision is imminent on a different day of the week, be wary.
• The Supreme Court still has 20 cases that they need to rule on before the end of their term, and four of those are the intertwining cases that comprise the health reform lawsuit.
• The Court generally only releases a few decisions at a time.
• The Court has issued more opinions so far this year than they had at this point last year, but they also have a few cases on left their docket that will require more than their fair share of resources and time in the coming weeks.  In addition to the health reform case, court watchers are also waiting for a high-profile decision regarding the Arizona immigration law.
• It’s possible that the Court will issue the four health-reform decisions on a piecemeal basis, but most experienced court watchers believe they will be issued simultaneously.
• The Supreme Court’s term is scheduled to conclude on Monday, June 25^th, however, Court officials have hinted that they may actually wrap up for the year on June 28^th.
• For the truly dedicated, the website www.scotusblog.com usually live-blogs the release of all decisions; although, we are pretty sure that when the health reform decision comes down, it will be breaking news for all media outlets.

Conventional wisdom indicates that the justices will release a health reform decision at the bitter end of their term.  The opinion-writing phases of the court’s decisions are very lengthy, particularly with more complicated cases.  Justice Ruth Bader Ginsburg is reportedly the speediest opinion writer, and she averages four weeks.  The other Justices are apparently much slower, and no one wants to give the impression that this decision didn’t get its due consideration.  Plus, the media attention that will be given to this decision will be enormous, to put it mildly.  The justices have little incentive to release such a high-profile decision early and face the media heat when they could just as easily release it on their last day in session before they go on summer vacation.

But will they even go beyond June?  Originally some court experts predicted the justices could extend their term into July because of the complexity of the health reform case. However, the AP has a story out yesterday that gives us good reason to believe that the end of June is the most likely time frame. According to their reporting, four of the nine justices have lecture agreements in Europe planned for July, including Chief Justice John Roberts who is slated to be teaching a law class in Malta on July 1^st.

Last Tuesday I posted a blog entry entitled “Here is an important civics lesson about the U.S. Constitution’s separation of powers doctrine“.

You might recall that on Monday, April 2nd President Obama remarked that if Supreme Court ruled the Patient Protection and Affordable Care Act (PPACA) unconstitutional and struck it down, it would be an “unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a Democratically elected Congress.”  Turns out that a federal judge in Texas didn’t take too kindly to the remark and subsequent “clarifications,” and demanded to know just exactly what the President meant with his commentary.

Fifth Circuit Judge Jerry Edwin Smith is a member of a three-judge appellate court panel that is hearing a case challenging a different part of the law—its restriction on physician-owned hospitals. During oral arguments in that case last week, Judge Smith brought up the President’s comment and told Attorney General Eric Holder to produce a three-page, single-spaced letter due by noon on April 5th explaining the administration’s view on judicial authority.

The Justice Department turned in their homework assignment last Thursday morning. (You can read the full letter here.)  In their response, the Justice Department stated that President Obama’s remarks were “fully consistent” with well-established legal principles. The courts’ power to review federal laws is “beyond dispute,” Attorney General Eric Holder wrote, but “the Supreme Court has often acknowledged the appropriateness of reliance on the political branches’ policy choices and judgment.”

However, the administration did shoot back a little on the point of judicial review. “The department has not in this litigation, nor in any other litigation of which I am aware, ever asked this or any other court to reconsider or limit long-established precedent concerning judicial review of the constitutionality of federal legislation,” Attorney General Eric Holder wrote.

I am sure we have not heard the last on this subject, and no doubt there will be even more drama related to this, particularly should the Supremes strike the law or parts of it down.

Last Tuesday I posted a blog entry entitled “Here is an important civics lesson about the U.S. Constitution’s separation of powers doctrine“.

You might recall that on Monday, April 2nd President Obama remarked that if Supreme Court ruled the Patient Protection and Affordable Care Act (PPACA) unconstitutional and struck it down, it would be an “unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a Democratically elected Congress.”  Turns out that a federal judge in Texas didn’t take too kindly to the remark and subsequent “clarifications,” and demanded to know just exactly what the President meant with his commentary.

Fifth Circuit Judge Jerry Edwin Smith is a member of a three-judge appellate court panel that is hearing a case challenging a different part of the law—its restriction on physician-owned hospitals. During oral arguments in that case last week, Judge Smith brought up the President’s comment and told Attorney General Eric Holder to produce a three-page, single-spaced letter due by noon on April 5th explaining the administration’s view on judicial authority.

The Justice Department turned in their homework assignment last Thursday morning. (You can read the full letter here.)  In their response, the Justice Department stated that President Obama’s remarks were “fully consistent” with well-established legal principles. The courts’ power to review federal laws is “beyond dispute,” Attorney General Eric Holder wrote, but “the Supreme Court has often acknowledged the appropriateness of reliance on the political branches’ policy choices and judgment.”

However, the administration did shoot back a little on the point of judicial review. “The department has not in this litigation, nor in any other litigation of which I am aware, ever asked this or any other court to reconsider or limit long-established precedent concerning judicial review of the constitutionality of federal legislation,” Attorney General Eric Holder wrote.

I am sure we have not heard the last on this subject, and no doubt there will be even more drama related to this, particularly should the Supremes strike the law or parts of it down.

Chris McGreal, a reporter for The Guardian, a London newspaper, posted an article last night entitled “Obama warns ‘unelected’ supreme court not to strike down healthcare law”.  The byline under the article’s title is “President says supreme court justices should not make ‘activist’ issue out of reforms that were passed by an elected Congress”.

When I read the article I had to shake my head in disbelief.  Here is our president whom we are told is a “constitutional scholar” ripping up the U. S. Constitution!  The last time I looked there was this thing called the separation of powers doctrine, something that is SO clearly embodied in the Constitution.

For those of us who paid attention during our high school civics classes we should remember that the principal responsibility of the Supreme Court (SCOTUS) is to (hopefully) consistently interpret and apply law to cases that come to them through our nation’s Appellate Court system.  Also, from time to time the subject of a law’s constitutionality is a matter that’s brought to the SCOTUS to determine, which was so clearly the case with NFIB vs. Sebelius (that being the current PPACA constitutionality challenge).

Further, as to the president’s pejorative reference to the SCOTUS justices being “unelected”, I will remind the president that under our Constitution the justices are appointed by the elected POTUS and are then in turn run through a very grilling review by the Senate Judiciary Committee by elected Senators and they must also receive Senate confirmation before they are able to ascend to the bench.

Therefore, to be clear, the “unelected” SCOTUS justices have the power and authority under the U.S. Constitution to declare laws as being unconstitutional and to strike any such laws down.  Therefore, by definition, rendering judgment upon the constitutionality of the PPACA cannot possibly constitute judicial activism.

The whole point of the separation of powers doctrine is to ensure that the legislative, executive, and judicial branches of the United States government are kept distinct in order to prevent tyranny and the abuse of power.  Needless to say, the framers had a great deal of wisdom, having lived under the tyranny of the British monarchy before declaring our nation’s independence!

The Supreme Court of the United States (SCOTUS) spent an unprecedented six hours over three days last week hearing oral arguments in the constitutional challenge to the Patient Protection and Affordable Care Act (PPACA) that had been mounted by 26 states and the National Federation of Independent Business (NFIB). While conventional wisdom says that oral arguments rarely influence decisions at the Supreme Court level, that the justices would almost certainly uphold the health reform law, and that the oral arguments would be pro forma and nondramatic, what went on in the courtroom last week quite literally turned conventional wisdom on its head.

While there are certainly no guarantees as to what the justices will do, and we probably won’t know what their decision is before mid-June at the earliest, it would seem that at least part of the PPACA is in serious danger.

Here’s an overview as to what happened during the three days of oral arguments before the SCOTUS:

Day One
On Monday, March 26, the applicability of the federal Anti-Injunction Act (AIA) was considered. The AIA is an obscure federal law that essentially prevents parties from entering into litigation over a federal tax until it has actually been levied. In this case, the question is whether or not the penalties for people who opt to not comply with PPACA’s individual mandate is a tax or merely a “penalty.” If the justices consider it to be a tax, then they could dismiss the case citing the AIA, and the states and the NFIB would have to try again in 2014 once the individual mandate is in effect. On one hand, the penalty falls under the jurisdiction of the Internal Revenue Service, but it is specifically referred to in the law as a penalty, and not as a tax or fee. Also, as Justice Ruth Bader Ginsberg pointed out on several occasions, while the penalty will likely raise federal revenues, unlike a true tax its purpose is not to raise money since if the requirement were 100% successful everyone would have coverage and no one would pay the fine.

Both the Obama administration and the 26 states and the NFIB believe that the AIA should not apply, so the SCOTUS appointed independent counsel to argue in its favor. In general, the comments and questions from the justices on Monday indicated they weren’t buying it and it seems unlikely that they will use the AIA as justification for not deciding the case this year. Instead, the key takeaways from Monday’s arguments are the conservative justices are skeptical of the Obama administration’s position that the mandate penalty is not a tax, yet it is a justifiable use of congressional authority under its powers of taxation. Also, the justices were feistier than many expected. The courtroom banter didn’t quite rise to the drama of a good L.A. Law rerun, but it was less like a constitutional law class than one might have expected.

Day Two
The second day of arguments focused on what many view as the heart of this case—whether or not imposing an individual mandate to purchase health insurance coverage on the American people exceeds congressional authority. The states and the NFIB say yes, and the Obama administration says no. The administration believes the mandate is justifiable both under the commerce clause of the Constitution and through Congress’ powers of taxation.

During Monday’s arguments the justices shot a hole through the administration’s theory that while it is not a tax for AIA applicability purposes, Congress was still within its purview through taxation powers to create the individual mandate penalty. So on Tuesday, Solicitor General Donald Verrilli focused more on how the Congress was justified in its actions due to authority under the commerce clause to regulate interstate economics activity.

Before the arguments in the case started, most court experts were predicting that the court would agree with the administration’s position and the mandate would be upheld by all of the liberal justices. Many predicted that some of the GOP-appointed justices, particularly Anthony Kennedy, Antonin Scalia and Chief Justice John Roberts, would also support the individual mandate. Instead, General Verrilli gave a widely panned performance and the justices really seemed to struggle with the idea that the act of not purchasing health insurance was an economic activity that could be regulated by Congress. In particular, the court’s “swing vote” Anthony Kennedy really seemed to struggle with the administration’s case. At one point he stated, “And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the Federal Government to the individual in a very fundamental way.”

While most opponents of the health law felt that the case on Tuesday went about as well as it could have, it’s important not to declare victory too early. Towards the end of the day on Tuesday, Chief Justice Roberts asked Paul Clement, lawyer for the 26 states, some tough questions and Justice Kennedy seemed to indicate he hadn’t made up his mind completely, noting the “health insurance market is unique.”

Day Three
The court divided the third day into two separate 90-minute hearings: the first to examine which elements of the law to keep should the individual mandate be found unconstitutional, and the second to determine the constitutionality of the Medicaid expansion. As with the second day’s oral arguments, justices were more skeptical than most legal scholars originally expected. While it’s impossible for anyone to truly gauge the decision of the justices based on oral arguments alone, by the end of day three, many scholars were increasingly doubtful that any of the law would be upheld at all.

The issue of severability was the central issue of the first half of arguments. Without the individual mandate, widely agreed as the heart of the law, doubts were cast by many on the court as to what else of the law could be kept. Originally, it was thought that many unrelated parts of the law, such as the Indian Healthcare Improvement Act and changes to Black Lung benefits, could be kept if the mandate fell. But through arguments, many were more skeptical noting just how each part of the law was related to the next. Attorney Paul Clement, arguing against the law, noted that every aspect of the law, from guaranteed-issue and community rating, to exchanges and tax credits, and the employer mandate to Medicare DISH hospitals are all interrelated and therefore if one should fall everything else should fall too.

Some members of the court questioned what authority they had to decide which elements to keep or whether it was up to Congress to again go through the law. Parsing through each provision would be a daunting task for the court, with Justice Scalia likening it to cruel and unusual punishment, “Mr. Kneedler, what happened to the Eighth Amendment? You really want us to go through these 2,700 pages?” Arguments turned to which powers the court should reserve for changing the law and which Congress reserved. Paul Clemente argued, “If you strike down the mandate, there’s going to be something for Congress to do…Do you want to give Congress the task of fixing the statute after something has been taken out, especially a provision at the heart, or do you want to give Congress the task of fixing health care?”

Douglas Holtz-Eakin, president of the American Action Forum, seems to believe that it’s a coin toss for whether they strike the mandate, and that the court will likely keep the rest of the law if they should strike the mandate. Meanwhile, Senator John Kerry (D-MA) was cited last week for saying that discussions are underway for what alternatives are available should the court strike the individual mandate.

The Medicaid argument was likewise more contentious than anticipated. The court’s conservative justices argued for both sides, that the states accepted the conditions of Medicaid by joining the program, yet that it was like having a gun pointed at the state’s head. Justice Elena Kagan questioned whether it was really a coercion, with states receiving a generous gift to their Medicaid programs with no matching funds requirements or extraneous conditions attached. In the end, the Medicaid provisions seemed much less safe than they did going into arguments. The real question now is how relevant the bread crumbs that justices dropped during oral arguments are to their actual legal reasoning on the cases. At the end of the week the justices made their initial votes and assigned opinion drafts. But those too can change any time between now and when the final decision is announced this June as justices use their draft opinions to persuade each other to join their side.

Resources:

• Audio of each day’s arguments.
• Transcript of each day’s arguments.
• The Wall Street Journal’s Washington Wire provided great live-blogging coverage of the three days from inside the courtroom.

It appears that the vast majority of Americans are paying close attention to the Supreme Court’s activities this week (or at least claim to be).

A poll commissioned by C-SPAN and released last Friday indicates that a whopping 95 percent of Americans are interested in the Supreme Court activity concerning PPACA, and 91 percent of respondents will either pay “somewhat” or “very” close attention to news reports concerning the case. Furthermore, 74 percent of those surveyed fell into the wishful thinking crowd and had hoped that the proceedings would be televised.

Meanwhile, another poll of Supreme Court “experts”—400 former clerks to various justices and about 240 members of the Supreme Court bar who have argued cases before the high court—believe that that the justices will uphold PPACA. Sixty-five percent of those surveyed stated they felt the court would uphold the individual mandate and 81 percent think the court will uphold the law’s Medicaid expansion. The poll was conducted by Purple Strategies on behalf of the American Action Forum and the Blue Dog Research Forum.

But the majority of the American people still seem to be hoping otherwise. A New York Times/CBS News poll released this morning revealed that just 36 percent of Americans approve of PPACA, while 47 percent disapprove. And an analysis of 1,000 likely voters conducted by Pulse Opinion Research on March 22 for The Hill indicated that only 42 percent of voters surveyed feel the Supreme Court should uphold the law, and 50 percent feel it should be struck down.

The Hill‘s poll also confirmed the C-SPAN data stating the American public is extremely interested in the case, in perhaps an even more telling way. According to their survey, “Finally, 76 percent of those polled said they’d be paying more attention this week to the Supreme Court arguments than to the NCAA basketball tournament.”

This week we can’t get enough SCOTUS ACA analysis.

• The Wall Street Journal’s live blog of the court proceedings.
• NPR’s primer on the legal arguments that have been / are being made over the three days of oral arguments.
• A New York Times analysis that compares these three days to a marathon for the impacted attorneys.
• Politico’s analysis of the first and second days of arguments.
• The Kaiser Family Foundation’s site linking to all of its coverage relative to the historic case.

The big week is finally here! The U.S. Supreme Court heard oral arguments in the constitutional challenge to the Patient Protection and Affordable Care Act (PPACA), widely known as NFIB v. Sebelius and HHS v. Florida, starting today.

The court heard arguments on the applicability of the Anti-Injunction Act today, and it will hear arguments around 1) the constitutionality of the individual mandate tomorrow, and 2) the law’s Medicaid expansion and lack of a severability clause on Wednesday. At the end of each day (by 2:00 p.m. on Monday and Tuesday and 4:00 p.m. on Wednesday) the Supreme Court will post the audio from the day’s session. You can listen to each day’s arguments here or read the written transcripts of each day’s proceedings here.

While none of the actual court proceedings are being televised, the truly dedicated may be interested in C-SPAN’s live feed of the action going on outside of the Supreme Court building. That’s where you can catch glimpses of the various press conferences going on all week and listen to the protesters representing both sides singing “We Shall Overcome” and “This Little Light of Mine.”

Two hours of arguments were heard today on the applicability of the Anti-Injunction Act (AIA), an obscure federal law which essentially prohibits legal action against a tax until it is actually levied. The question at hand was whether or not PPACA’s individual mandate penalty, which takes effect on January 1, 2014, is a tax or just a penalty or fee. Both the Obama administration and the 26 states and the National Federation of Independent Businesses (NFIB) argued that the penalty is not a tax, and, accordingly, the AIA does not apply. That the mandate penalty is not a tax is a central point in the plaintiff’s case—it’s one of the main reasons why they contend that the law is an overreach of congressional power. The Obama administration’s position is a little more nuanced. They believe that while Congress’s authority to create the individual mandate is derived from its taxation authority and power under the commerce clause, the specific language creating the penalty in PPACA makes the AIA non-applicable, as it is a fee, not a tax.

Even though all parties in this particular PPACA challenge case believe the AIA is non-germane, a lower court ruled in a different PPACA-challenge case that the AIA was applicable. As such, the Supreme Court decided to hear arguments on this point and assigned independent counsel Robert A. Long to argue in favor of the applicability of the AIA. If the Supreme Court rules that the AIA applies to this case, it could avoid ruling on the case altogether and instead direct the challengers of the law to try again post-2014.

The questions the justices posed to counsel today didn’t really seem to indicate that they would use the AIA as an excuse to punt. Eight of the nine justices asked tough questions that revealed skepticism relative to the applicability of the AIA. Justices Ginsberg and Breyer pointed out that unlike a tax, the penalty isn’t supposed to raise revenue for the federal government, and if the individual mandate is 100% successful no monies would ever be collected. Chief Justice Roberts noted relative to the applicability, “it’s a case quite similar to this in which the constitutionality of the Social Security Act was at issue, and the government waived its right to insist upon the application of this Act.”

Justice Samuel Alito did draw a mild laugh from the crowd by poking a little bit of fun at the Obama administration regarding their position that the mandate penalty is not a tax but still legal due to congressional authority to tax. He asked Solicitor General Verrilli, “Today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax. Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?” Justice Scalia also asked General Verrilli a number of pointed questions about whether or not the penalty was a tax or a fee.

To win the case, the votes of five justices will need to be secured. Based on their prior judicial behavior and writings, most experts predict that all four Democratically-appointed justices—Sonia Sotomayor, Steven Breyer, Ruth Bader Ginsburg and Elena Kagan—will vote to uphold the health reform law. Republican Justice Clarence Thomas is widely expected to vote to overturn the measure, although it will be interesting to see if he asks any questions during the oral arguments. Apparently he hasn’t spoken during oral arguments in over six years and he didn’t ask any questions about the Anti-Injunction Act today.

The views of the other four Republican-appointed justices are a little more of a mystery. Chief Justice John Roberts has often spoken out against “activist” and politically-motivated court decisions, and Justice Samuel Alito doesn’t have a clear judicial record on the issue. Ultra-conservative Justice Antonin Scalia would seem to be a lock to vote to strike down the health reform law, except that he sided with the majority in a 2005 case regarding the regulation of medical marijuana growers that the administration has cited repeatedly as a justification that PPACA does not exceed congressional authority under the constitution’s commerce clause. In that 2005 case Scalia wrote, “Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general economic regulation of interstate commerce.”

Justice Anthony Kennedy is probably the biggest wild card for court watchers. Widely considered to be the court’s swing vote on all kinds of issues, in 1995 he authored an opinion in a case that asked if a law prohibiting individuals from knowingly carrying a gun in a school zone is unconstitutional because it exceeds congressional power under the commerce clause. While the court found that the gun law in question was indeed an overreach of congressional authority, in his opinion overturning the law on noneconomic grounds, Kennedy wrote that Congress indeed can pass laws that attempt to address national economic problems. Perceived economic benefit is a central reason why advocates called for PPACA’s passage. However, Justice Kennedy is also a huge states rights advocate, and might be swayed by the arguments concerning the law’s overreach and undue burden on the states.

Even though the arguments will wrap up on Wednesday, the justices will likely take several months to finalize their ruling. The earliest most court watchers expect to see a ruling issued in the case is mid-June, and we could easily have to wait until July.