supreme_court_side_view.pngIn two weeks or less the U.S. Supreme Court will announce a decision on the constitutionality of President Obama’s healthcare reform law. To say this decision will be important is an understatement: it promises to be one of the High Court’s most historic statements on the power of the federal government.

While the justices will be weighing several questions related to the 2010 healthcare reform law, the centerpiece of their deliberations is the so-called “Individual Mandate,” which requires nearly all Americans to purchase health insurance coverage or face a stiff government penalty.

Justices will decide a core question—whether the Congress, in including an individual mandate in the Patient Protection & Affordable Care Act, exceeded its authority to regulate interstate commerce under the U.S. Constitution.

The so-called “Commerce Clause” of the Constitution authorizes Congress “to regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes.” Read more.

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Supreme Court Decision on Healthcare Reform: Any Day Now

Tue Jun 12, 2012

supreme_court_side_view.pngIn two weeks or less the U.S. Supreme Court will announce a decision on the constitutionality of President Obama’s healthcare reform law. To say this decision will be important is an understatement: it promises to be one of the High Court’s most historic statements on the power of the federal government.

While the justices will be weighing several questions related to the 2010 healthcare reform law, the centerpiece of their deliberations is the so-called “Individual Mandate,” which requires nearly all Americans to purchase health insurance coverage or face a stiff government penalty.

Justices will decide a core question—whether the Congress, in including an individual mandate in the Patient Protection & Affordable Care Act, exceeded its authority to regulate interstate commerce under the U.S. Constitution.

The so-called “Commerce Clause” of the Constitution authorizes Congress “to regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes.”

While this provision has been the subject of encyclopedic analysis and interpretation since its late 18th Century drafting, its application to the healthcare reform law is remarkably straightforward: can the legal concept of interstate commerce be stretched to include a federal government mandate on citizens to purchase a particular product or service? In other words, to engage in a specific type of commerce, i.e., health insurance, that, absent the mandate, they would not engage in?

It’s likely that the Supreme Court will divide along predictable liberal and conservative lines in reaching its decision. The four liberal justices will probably see no difficulty in upholding the power of the federal government to mandate purchase of health coverage. The four conservative justices will no doubt see it the other way: the Constitution contemplates a limited federal government; if Congress has the power to mandate that citizens buy health insurance then there would be no limiting principle to prevent a future Congress from mandating that citizens buy anything.

That leaves Justice Anthony Kennedy, thought the “swing vote” in many 5-4 decisions, as likely to break a 4-4 tie between liberals and conservatives and produce a 5-4 decision one way or the other.

If the Court upholds the individual mandate the healthcare reform law will have cleared the last remaining legal obstacle to its full implementation. Then, unless a future Congress repeals or amends the law, federal agencies like IRS, HHS and the Labor Department will proceed with vigorous enforcement of the law’s key provisions, including employer compliance requirements like the “Play or Pay” mandate that takes effect in 2014.

On the other hand, if the Supreme Court declares the individual mandate unconstitutional, the entire healthcare reform law, including present and future employer compliance requirements, would be thrown into doubt. Will the Court also invalidate insurance reforms in the law such as “guaranteed issue” and “community rating”? And would employers still be required to offer coverage to employees’ dependents up to age 26? What about “first dollar” coverage of preventive health services? Or the prohibition on annual and lifetime coverage limits on essential health benefits?

To be sure, some employers and insurance plans may continue certain reforms on a voluntary basis. United Healthcare, for example, announced Monday that its plans would continue voluntarily to permit employees to keep dependents on health plans up to age 26 and to cover preventive health services without copays.

But how will the Supreme Court decision affect W-2 reporting of the value of employee health coverage? Or the $2,500 limit on FSA elections that takes effect next year? And would the states continue to put health insurance exchanges in place absent an individual mandate to buy coverage?

These and a host of other questions will be answered before the end of this month. The Supreme Court of the U.S. is, in this sense, the final arbiter of difficult constitutional questions. And questions about the power and reach of the federal government, particularly with regard to the decisions of individual citizens, are in many ways the most profound questions that come before the nine Justices of America’s highest court.

It’s impossible to predict what the Court will decide. We can predict that however the Justices rule it will not be the end of healthcare reform. The landmark Patient Protection & Affordable Care Act is likely to be an ongoing subject of legislative focus—and continuing compliance uncertainty.