A Tale of Litigation Past, Present, and Future: Patient Protection and Affordable Care Act, 0214 RIBJ, 62 RI Bar J., No. 4, Pg. 23
| Author | Ronald M. LaRocca, Esq |
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0 January, 2014
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\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0I. Background
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The Patient Protection and Affordable Care Act (ACA) became law on March 30, 2010, dramatically altering health care in the United States and causing an avalanche of litigation. Understanding the course of this litigation is not only an interesting academic exercise, it can have a practical benefit for attorneys. The law regulates insurance coverage disputes, mandates taxes for certain individuals, imposing assessable payments for certain employers. Further, in its efforts to increase (or force, depending on your perspective) health care access, Congress did not ignore the usefulness of the judiciary. Included within the ACA is an expanded enforcement mechanism grounded in already-existing federal remedies. This article outlines the past, present, and likely future of ACA-related litigation.
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0II. Litigation Past & Present
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The ACA has three primary focuses:
1) regulation of existing health insurance plans,
2) expansion of the health insurance marketplace, and 3) implementation of changes to health care delivery. By design, Congress did not mandate immediate implementation. Rather, the ACA’s provisions come into effect gradually, beginning with the expansion of existing health insurance coverage and culminating with sweeping changes to the marketplace and delivery of health care, like the individual mandate beginning in January 2014 and the employer mandate beginning in January 2015.
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The law caused an immediate flood of litigation despite its gradual implementation. Many of these suits centered on its most controversial provisions: a) the individual mandate; b) Medicaid expansion; and c) the employer mandate. The controversy culminated in the United States Supreme Court case of National Federation of Independent Business v. Sebelius, 132 S.Ct. 2566 (2012), which addressed the constitutionality of the individual mandate and Medicaid expansion.
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0A. The Individual Mandate
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The ACA mandates that every individual purchase a health insurance policy beginning on January 1, 2014. To facilitate health insurance purchases, the statute envisioned exchanges which are web-based platforms allowing an individual to choose between competing private insurance plans offering a range of qualifying coverage. These exchanges, and the costs associated with each competing plan, debuted to mixed reviews and controversy in October 2013.
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Failure to obtain coverage does not carry criminal penalties. Instead, the ACA provides a sliding scale of financial penalties based upon an individual’s income and family-status, payable through individual tax returns.1It is here where the primary challenge began.
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0On June 28, 2012, in National Federation of Independent Business, the Supreme Court affirmed the constitutionality of the individual mandate. The Court initially rejected the argument that the Commerce Clause provided Congress the ability to force health insurance purchases, holding that “[t]he Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress’s actions have reflected this understanding.”2 The Court commented that the “individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to ‘regulate Commerce.’”3
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Instead, the Supreme Court legitimized the individual mandate through Congress’s power to lay and collect taxes. It reasoned that the individual mandate is not a “legal command to buy insurance.”4 Rather, “it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.”5 While acknowledging the payment of a tax will affect individual conduct, the Court held “this is nothing new, ” and cited examples including taxes on cigarettes to discourage smoking and tax incentives that encourage people to purchase homes and professional educations.6 Because payments for refusing health insurance “may reasonably be characterized as a tax” and not a penalty “with the characteristics of regulation and punishment, ” the Constitution permits such a s a tax.7 Consequently, the individual mandate survived.
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0B. Medicaid Expansion
\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Alas, the ACA’s victory was not complete. The law’s multi-pronged approach to increasing health care access included measures designed to make health care affordable for low income individuals unable to afford private health insurance on the exchange. A critical component of this effort was to expand Medicaid to incorporate a greater number of the nation’s poor. Prior to the ACA’s enactment, the Medicaid program required States to cover certain categories of needy individuals including pregnant women, children, very low income families, the blind, the elderly, and the disabled through a combination of federal and state funds.8 The ACA dramatically expanded the eligibility pool, requiring states to cover all individuals with incomes below 133 percent of the federal poverty line, with the federal government initially covering the entire cost.9 A state’s failure to expand...
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