http://www.medscape.com/viewarticle/758246

From Medscape Medical News

Individual-Mandate Foes Warn of Affordable 'Car' Act
Robert Lowes

February 7, 2012 — In a brief filed with the Supreme Court on February 6, elected state officials opposed to the Affordable Care Act (ACA) described a "brave new world" of compulsory and unconstitutional commerce if the law's mandate for individuals to carry health insurance is allowed to stand.

If the government can compel Americans to obtain health insurance in the name of regulating interstate commerce, the state officials argued, then it can require them to buy cars to bolster the domestic auto industry, or certain foods to support the agriculture industry. Mandatory twice-a-year dental visits could prevent expensive emergency dental care on the public tab. And to get Americans to save for their retirement, the government could require them to invest in 401(k) accounts.

These arguments one-up the reasoning of US District Judge Roger Vinson in Pensacola, Florida, who struck down the individual mandate as unconstitutional in January 2011 in a case brought by the same elected officials, who hail from 26 states. Vinson wondered whether the legal premise of the individual mandate would justify a government requirement to eat broccoli.

Those state officials, along with other opponents of healthcare reform, are now asking the nation's highest court to reach the same conclusion about the individual mandate. The Supreme Court agreed to hear the issue in November 2011 after various federal district and appellate courts issued conflicting opinions about the mandate's constitutionality. The parties in the litigation, as well as dozens of "friends of the court," have been filing written arguments in the case, a process that will wrap up later this month. The Supreme Court has set aside 3 days in late March to hear oral arguments. It will render a decision before the end of June.

Written briefs are piling up high and wide due to 4 different questions that the court is weighing in the case. In addition to deciding whether the individual mandate is constitutional, the high court will decide whether the entire law should be voided if it throws out the mandate. It also will consider the constitutionality of the law's dramatic expansion of the Medicaid program, which some state officials view as a trampling of states' rights.

Yet another issue on the court's agenda is jurisdictional in nature — should the court refrain from hearing the case at all until individuals who fail to obtain health insurance begin to pay a penalty under the ACA? That question has arisen because a law called the Anti-Injunction Act (AIA) bars individuals from challenging a tax in court until after they have paid it, and the ACA penalty has been construed as a tax in some quarters. The individual mandate goes into effect in 2014.

"An Extraordinary and Unbounded Assertion of Federal Power"

In its own Supreme Court brief filed last month, the Obama administration argued that Congress exercised its rightful power to regulate interstate commerce as granted by the Constitution's Commerce clause when it wrote the individual mandate into the ACA.

The mandate, the administration stated, eliminates the marketplace problem of cost-shifting, which occurs when the uninsured receive healthcare but others usually foot all or part of the bill. Cost-shifting eventually leads to higher insurance premiums for the insured, which makes coverage even less affordable. The administration said the mandate also will swell the insurance risk pool with healthy individuals, which would cause premiums to drop and enable other insurance reforms to work, such as guaranteed issue without any exclusion of pre-existing conditions.

The state officials countered in the brief filed yesterday that the individual mandate rests on "an extraordinary and unbounded assertion of federal power" that "cannot survive constitutional scrutiny." They said the Commerce clause gives Congress the power to regulate commerce, but not to "compel individuals to enter into commerce." Otherwise, Congress would be free to require individuals to purchase not only insurance, but also cars and food.

The state officials also said that contrary to the administration's claims, the individual mandate technically does not regulate the commerce that occurs when Americans pay — or fail to pay — for healthcare. It requires individuals to obtain insurance, but it does not require them to use their insurance to pay a physician or hospital bill, according to the brief.

The brief from the state officials also disagreed with the Obama administration's argument that the individual mandate is authorized under Congress' power to tax as well its power to regulate interstate commerce.

In taking this stance, the administration said the individual mandate functions for all practical purposes as a tax law despite imposing a penalty per se on Americans who decline insurance coverage.

The state officials said the administration's argument falls apart in several ways. For one thing, their lawsuit challenges the individual mandate, not the penalty that enforces it. Furthermore, "the penalty plainly operates as a penalty, not a tax." And if it were a tax, it would fail on constitutional grounds because it would not be apportioned among the states on the basis of population as required.

Along those same lines, the state officials said in another brief filed Monday that the AIA should not bar the high court from reaching a decision in the ACA case. They again argued that they are contesting the mandate, not the penalty, and that the mandate is enforced by a penalty, not a true tax. Also, the AIA applies to "persons" — a term that includes corporations — but not state governments, according to the brief.