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Health Reform Goes To Court: A Primer [Part 2]

Mar 30, 2012

Posted by Mike Beene (NASE General Counsel)

One question: If the individual mandate is unconstitutional does the entire law fail? 

The court will look to Congressional intent and will frankly have a wide degree of latitude. One hint of Congressional intent might be the failure of the statute to contain a “savings clause” which is typically found in a statute and says essentially that if a portion of a law is found unconstitutional, the remainder of the law stands. Some claim the lack of such a clause was just an oversight. Others say it demonstrates the clear intent of Congress that the individual mandate is so key to the statute that if it goes, so must the entire law. Who knows what the court will do if it reaches this issue? Generally courts do look to save constitutional portions of statutes and then let Congress fix what it may.

Another question: Is the ACA Medicaid scheme coercive to the states?  

The ACA adds millions of people to the State Medicaid rolls and forces states to loosen enrollment standards or cease getting federal money (even though their citizens send tax money to the federal government). Medicaid is a shared program in which roughly half of the dollars come to a state from the Federal government.  In exchange, while the states generally have different Medicaid programs, certain Federal standards must be met.  

The ACA brings an unprecedented expansion of Medicaid, with predictions of 16,000,000 new enrollees. Already the largest budget item for the states, the ACA will add at least 10% of the excess costs to State budgets. What is a State, which generally must constitutionally balance its budget, to do? If they say no more, the federal government will cut off billions of dollars in aid. That is money that its citizens have already sent to Washington. So is this the case that holds we have moved across the line from a partnership to a point where the states have no choice in the matter? Few think that the Supreme Court will rule for the challenging States on this matter. However, the fact that the Court granted significant argument time on this issue is intriguing.  Maybe Washington should consider whose money it is anyway.  

Those are the four issues in a nutshell.  The fact that such extensive oral argument has been granted has raised interest and concern among those who just assumed congress could act with unbridled abandon. Many believe we are at the precipice of a Constitutional crisis and that this case will perhaps fundamentally change the federalist system. The summer should bring some answers.


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