Helping you understand the Supreme Court

For the past two years I’ve devoted several blogs to the Patient Protection and Affordable Care Act better known as Health Care Reform or “Obamacare”.  The fate of the law was decided on June 28, 2012 by the Supreme Court. 

Let me help you understand what their ruling meant and I will do a few other blogs in the coming days on what it means for health care providers.

The challenge to the Affordable Care Act (ACA) came down to what is known as the individual mandate or the requirement that almost all Americans buy health insurance by 2014 or pay a penalty.  The government argued that Congress could require everyone to buy health insurance using its power under the Commerce Clause of the Constitution because the failure to buy insurance shifts the costs of health care for the uninsured to health care providers, insurance companies, and everyone who does have health insurance. 

The Supreme Court did not agree with this argument and ruled that the Commerce Clause doesn’t apply in this case because Congress can only regulate commerce, it can’t create commerce and the individual mandate would create activity instead of regulate activity.  The court ruled that interpretation of the Commerce Clause as argued by the government would expand the authority of Congress and allow it to regulate all kinds of things and could be used to “force people to buy vegetables”.

As you well know the individual mandate was determined to be constitutional even though the Commerce Clause argument was thrown out…here’s how:  In a 5-4 decision the Supreme Court ruled that the individual mandate is constitutional as a tax.  The mandate imposes a tax on people who do not buy health insurance, and taxes are something Congress can impose under its constitutional taxing authority.  If someone does not buy health insurance and instead pays the tax, there’s nothing the government can do about it.  Just like any other tax, you are only penalized if you don’t pay. 

If the individual mandate were not upheld the court would have then had to decide if any portion of the law applied since the mandate did not apply.  The court ruled that the mandate is constitutional as a tax so they did not need to rule on the rest of the law. 

The court did throw out the Medicaid exclusion.  The ACA expands Medicaid and the law, in its original form, would have eliminated all federal funding for Medicaid services if a state chose not to expand Medicaid services.  The court determined that the federal government could only withhold Medicaid money that would go to expanding services, not existing Medicaid services.  States have the ability to decide if they want to participate in the expanded Medicaid program.

That’s how it went down.  You’re going to hear a lot more about it in the coming months as the November election gets closer.  You will hear one side argue that the ACA is saving millions of Americans and you will hear the other side argue that no one wants, or can afford to pay, more taxes.  You will also hear that Congress can overturn the individual mandate because it’s a tax and many in Congress will claim that’s what they want to do.  The House is planning a vote on July 11 to repeal the tax and it may have enough votes to do so but it will die in the Senate.

No matter which side of the aisle they’re on I believe most elected leaders understand that the ACA has some provisions that will benefit our country in the long-term.  I’m not picking sides but the ACA is good for health care providers because cost is shared instead of shifted.  Health Care in America is entering a new era and if I’m still doing this blog ten years from now it will be interesting to look back and see how far we’ve come.

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Executive Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. At GVMH we care for our families, friends and neighbors. We're committed to providing the safest, friendliest and most compassionate care to all we serve.
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