Health Law FAQ: Affordable Care and Patient Protection Act.
The United States Supreme Court is going to decide the case of the constitutionality of the Affordable Care and Patient Protection Act. It’s one the most important cases the Court has ever heard, not just because of the importance of the health care issue but because it raises general questions of the constitutional authority of the Federal Government. The Health Law, Bioethics & Human Rights department has prepared a list of frequently asked questions to explain the issues the Court will be deciding.
Frequently Asked Questions about the Constitutional Challenge to the Affordable Care and Patient Protection Act
1. What is the purpose of the Affordable Care and Patient Protection Act (ACA)?
The primary goal of the act is to ensure that all legal residents in the United States have health insurance coverage that provides payment for comprehensive health care, including preventive services.
2. Why is the law necessary?
Approximately 47 million people in the U.S. do not have health insurance coverage over the course of a typical year. These people are uninsured for a variety of reasons; they cannot afford it (the primary reason people are uninsured), they cannot find a company that will provide health insurance coverage because they have a preexisting condition, or they choose not to purchase health insurance (this is by far the smallest number of the uninsured).
3. But can’t uninsured people receive care?
Yes, if they can find a provider who will treat them. But this is often difficult or impossible without insurance because of the high cost of medical care in the U.S. [The U.S. has, by far, the most expensive care in the world]. Indeed, the major cause of bankruptcies in the U.S. is the inability to pay medical bills.
Those suffering true medical emergencies may not be refused necessary medical care because of the inability to pay due to both federal and state requirements. But this is a very limited form of care, and only extends to care that is required to treat the emergency condition itself. This emergency care requirement, by definition, does not cover routine medical care or preventive care. For example, the law requires treatment for someone having a heart attack, but does NOT require follow-up treatment after the heart attack or the provision of preventive care to reduce the risk of heart attacks.
Because of the requirement for the provision of emergency care, many uninsured people seek non-emergency care in emergency rooms, leading to both inappropriate and expensive care for this population.
4. Who pays for this care if the patients can’t afford it?
This apparently “free care” is not free at all. Rather this care is paid for by charging higher premiums for those who do buy insurance, whether the purchasers are individuals or employers who offer a health insurance benefit to workers. This is referred to as “cost shifting,” which leads to higher premiums for those who are insured, which may cause some of those currently covered to no longer be able to afford health insurance. It amounts to about $60 billion a year. There is simply no such thing as “free care” – the issue is how to pay for the totality of all the care delivered in the U.S.
5. How does the ACA resolve this problem?
It does so in the most controversial section of the law, which requires everyone to be covered by health insurance. Both public insurance (e.g., Medicare, Medicaid, and Veterans Health services) and private insurance (through employers or from a commercial insurer) count. Failure to be insured would result in a tax penalty being imposed on non-insured persons. Lower income people who do not qualify for Medicaid can receive federal subsidies or tax credits to make private insurance affordable. Most importantly, the ACA imposes federal requirements that makes private insurance available to everyone. For example, it requires health insurance companies to sell policies to everyone, regardless of their health or whether they have a pre-existing condition. It also prohibits raising premiums on the basis of a person’s health status and caps on the amount of claims for health care. These and other provisions will become fully operable in 2014.
6. So what is the legal problem that led to the Supreme Court deciding the constitutionality of the ACA?
While there are several challenges to the law, the most important one, and the one that will be discussed here, is the federal requirement that all people must have some form of health insurance. This is the most important issue for two reasons. First, it is likely that if the Court struck down this provision, the rest of the insurance provisions in the ACA would be difficult, if not impossible, to effectuate. In order for the ACA to work as planned, everyone needs to be insured before they need care so that there will be an adequate fund of money to pay for care when they become ill, and to pay for preventive care for all. In reality, the ACA is not so much about insurance, but rather the creation of a mechanism for paying for a health care system that will be used by virtually everyone over the course of their lives.
Second, in order to comply with the ACA’s insurance requirement, many people will be required to buy an insurance policy from a private company. This will be the first time in history that the Federal Government would penalize a person for not buying a product from a private party. Given this, the case is not just about the ACA but is also more generally about the authority of the Federal Government to impose such a requirement.
7. So where in the Constitution might the Federal Government get the authority to create such a requirement?
This question presents the very core issue that the Supreme Court will decide.
The Federal Government only has “enumerated powers.” This means that the Federal Government can exercise only the powers enumerated in the Constitution. If a power is not found in the Constitution, then the Federal Government does not have authority in that area. Unlike the individual states, the Federal Government does not have a general “police power” to enact laws for the benefit of society. By the way, it is because states have a broad police power that the states can enact such an insurance requirement, just as Massachusetts has done.
Those challenging the law claim that nothing in the Constitution gives the Federal Government the authority to require a private person to buy something from another private person (or a corporation). Indeed, nothing like this requirement has been imposed by the Federal Government in the last 200 years.
The supporters of the ACA and the government argue that the Federal Government has the power to create such a requirement as a result of its explicit Constitutional authority to regulate interstate commerce. To simplify the argument a bit, both the health insurance industry and the health care industry can be, and are, currently regulated by the Federal Government because they are obviously national industries that both affect and use interstate commerce to conduct their businesses. Therefore, a law that ensures the proper funding of these industries also falls under the Federal Government’s interstate commerce authority.
Opponents agree that these industries can be regulated by the Federal Government. But, they argue that this does not mean that individuals who do not buy health insurance are parts of these industries or can be forced to become parts of these industries. The opponents actually focus their arguments on the insurance industry since the requirement is to obtain insurance, not health care. They argue that it is one thing to regulate huge industries and entirely another thing to regulate those industries’ non-customers. For example, even though the car industry clearly can be regulated by the Federal Government, it does not mean private citizens can be forced to buy cars from it. Indeed, the argument continues, one can never be considered to be in interstate commerce by doing nothing or by choosing not to participate in an interstate activity.
The clincher to the opponents’ arguments is that if the Federal Government has the authority to penalize individuals for not buying something from a private party, there is no limit on what the Federal Government can require individuals to do. The Federal Government would no longer be a government of enumerated powers because the broad interpretation of the scope of the Commerce Clause would grant it virtually limitless authority. Or as one skeptical lower court judge asked, if the Federal Government can make people buy health insurance, can it also make people buy and eat broccoli since healthy eating could lower health care costs and thereby affect interstate commerce? This is not such an easy question to answer and we will come back to it below. [If you can’t wait, you can skip to question 12.]
8. But doesn’t the government make you buy things all the time? You cannot drive or register a car unless you buy car insurance from a private company.
This type of governmental requirement imposed by the ACA is quite different from the one in this question. The car insurance requirement is a conditional requirement, not an absolute one. You only have to buy insurance if you wish to drive a car. This is up to you. There are plenty of people in the U.S. without car insurance and they are not violating any law. The ACA would subject every legal resident in the U.S. to a penalty for not having health insurance – it is not a conditional requirement to enable you to do something, it is a universal mandate.
9. But people are forced to buy Medicare, right? Isn’t this the same thing since money is coming out of our pocket to buy insurance for our old age?
While the effect on your pocketbook is the same, the Constitutional issue is starkly different. One does not purchase Medicare from a private company. Rather Medicare payments are subtracted from your paycheck as a tax that the Federal Government then spends to buy health care for those over 65. The Federal Government clearly has the Constitutional authority to tax and to spend, and the Medicare program clearly comes under this Constitutional power.
10. So why didn’t Congress fund the ACA like it funds Medicare?
In a word, politics.
In the original bill there was a proposal for a “public option” [similar to Medicare] as a way for individuals to become insured in addition to a private insurance plan option. Private insurers accurately argued that they could not profitably compete with a public option and conservative politicians from both parties argued that a public option would be a “governmental takeover” of the health care industry. [It would not be close to a “governmental takeover” of health care but that is for another discussion.] If the public option remained in the bill, there would not have been sufficient votes to pass any of the provisions of the ACA so the public option was removed.
If the public option remained in the law there would not be this Constitutional issue because no one would be required to buy a product from a private party. It is notable that the same political forces that required that health insurance be purchased from private companies and removed the public option are the same forces that are challenging the constitutionality of the private requirement.
11. Are there other parts of the Constitution which might provide the Federal Government with the authority to require the purchase of health insurance?
Yes. The Constitution contains a provision that states “Congress shall have the power… To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by the Constitution in the government of the United States…” This is referred to, for obvious reasons, as the “necessary and proper clause.” While this clause looks like a broad and general grant of authority, it is not. Read closely, what it does is give the Federal Government the power to “make all laws” that are “necessary and proper” to enforce the powers that are already enumerated in the Constitution. It would be applicable in this case because the Federal Government clearly has the Constitutional authority to regulate both the health care and health insurance industries under its power to regulate interstate commerce. The Government and supporters of the ACA argue that mandating the purchase of health insurance is a “necessary and proper” means for it to regulate these national industries. Opponents of the ACA disagree. They claim that such a mandate is neither necessary nor proper; the mandate is not “necessary,” because there are other ways to achieve universal access to care.
12. So, who is likely to win?
Got us! This is a truly landmark case in constitutional law, and the Court clearly recognizes its decision’s historic importance regarding its delineation of Federal authority. Ordinarily the Court permits a total of one hour to hear a case, regardless of its importance. The ACA arguments will be held for 6 hours over three days.
This is where the answer to the broccoli question comes in [See question 7, above]. There is no possibility that the Court will decide the case in a way that would establish a legal principle that would extend Federal authority to such a degree that it could require people to eat broccoli or require any similar individual action. As a result of this, if the Court is to uphold the law, it will need to be convinced that there exists some limiting principle that would prevent an interpretation of its ruling as embracing broad expansion of Federal Governmental power. We suggest the limiting principle is that payment for health care presents a literally unique (as in “like no other”) issue. What makes it unique is that virtually everyone needs and uses health care at some point; someone must pay for that care. The number of people who will receive no care over the course of their lifetime is so small (less than 1%) as to be inconsequential for the purposes of this analysis. This means everyone is continually in the health care market, even if they are not currently purchasing it. For example, one may be sitting in a chair watching a movie, but when chest pains manifest themselves, 911 is called and everyone expects that they will be taken care of. And that expectation exists because they are always “in the health care market.” This also means that we are constantly in the health care payment market, too, because health care is not free. If this argument is correct (and we think it is) then the Federal law does not require people to enter a market – they are already in it, already in interstate commerce, and therefore subject to regulation. All the law does is regulate how and when people pay for the care they will ultimately receive. This position more or less summarizes one of the government’s arguments as well as the argument of a group of 104 health law professors and many other advocates for the ACA. This argument also takes care of the broccoli concern. Obviously, when watching a movie you are in no way in the broccoli market, or any other market. There is no equivalent to the heart attack example that will send emergency responders to your door to take you to the supermarket to get broccoli you cannot pay for.
But because this case involves a truly unprecedented method of exercising Federal power, it is not possible to make an accurate prediction of how the Court will address these issues. Just because its action is unprecedented does not mean that the Federal Government does not have the Constitutional authority to do this. But the fact it has never before been done is one thing that will raise the Justices’ eyebrows, especially those Justices that favor limited Federal authority. Courts across the country have been split in the several cases that have been decided and legal scholars have had serious debates over the constitutionality. Unless the Court wiggles out of definitively deciding the issues (and there are many ways it can do so), we will see history being made.
Other Readings:
To see the briefs regarding the constitutionality of the individual mandate go here: http://www.americanbar.org/publications/preview_home/11-398.html
For comprehensive information on the ACA, go to The Henry J. Kaiser Family Foundation: http://healthreform.kff.org/