PPACA, The Individual Mandate, And The Supreme Court

On Jan. 31, 2011, Senior Judge Roger Vinson of the United States Northern District Court of Florida issued a declaratory judgment finding the Patient Protection and Affordable Care Act (PPACA or Act) unconstitutional. Twenty-six states, including the state of Indiana, two private citizens, and the National Federation of Independent Business filed their complaint seeking the declaratory judgment and injunctive relief minutes after President Obama signed PPACA into law.

Judge Vinson held that the individual mandate, which beginning in 2014 requires Americans (with certain limited exceptions) to purchase approved health insurance or pay a monetary penalty, exceeded the authority of Congress under the Commerce Clause and was, therefore, unconstitutional. Judge Vinson also found that "the individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit." Since the individual mandate could not be severed from the Act, the district court found the entire Act unconstitutional.

This judgment lead some of the state litigants to cease taking any steps to implement PPACA. Instead of filing an immediate appeal and requesting a stay, the federal government filed a motion seeking clarification of the January 31 decision. While noting that his original decision was "clear and unambiguous," Judge Vinson issued an order on March 3, 2011 clarifying his prior order and granting a stay on the enforcement of his ruling conditioned on the federal government filing an expedited appeal within seven calendar days to the Court of Appeals or the United States Supreme Court.

On March 8, 2011, the federal government filed its appeal with the United States Court of Appeals for the Eleventh Circuit in Atlanta. Consistent with Judge Vinson's order, the government requested expedited review and proposed a briefing schedule which could lead to oral argument in late June or early July. Similar appeals are pending before two other U.S. Courts of Appeal as four other federal trial courts have already addressed the constitutionality of the individual mandate. Of the now five federal trial court decisions, three courts have upheld the constitutionality of PPACA and its individual mandate. These decisions are based on the position that an individual's decision not to buy health insurance qualifies as an activity that Congress can regulate under the Commerce Clause.

Ultimately, the Supreme Court will need to resolve this issue. As Judge Vinson in his March 3 order said:

As I wrote about two weeks after this litigation was filed: "the citizens of this country have an interest in having this case resolved as soon as practically possible …." That was nearly eleven months ago. In the time since, the battle lines have been drawn, the relevant case law marshaled, and the legal arguments refined. Almost everyone agrees that the Constitutionality of the Act is an issue that will ultimately have to be decided by the Supreme Court of the United States. It is very important to everyone in this country that this case move forward as soon as practically possible.

Assuming decisions from the various courts of appeal are issued in late Summer, the earliest the case will arrive at the Supreme Court is late 2011 to early 2012 with a decision issued perhaps months later. In the meantime, employers, individuals, providers and states will need to take steps to comply with the Act and the many regulations which will likely continue to be issued by federal agencies. So far, repeal efforts in Congress have been unsuccessful. Efforts in the U.S. House of Representatives to limit funding of the Act in order to delay and/or prevent implementation will continue; however, many parts of PPACA have already gone into effect and others will be implemented as we await a decision from the Supreme Court.

Once the case reaches the high court, the future will remain uncertain as it is unclear how the Court will rule on such a complex issue. A recent article in the Dec. 18, 2010 issue of the New York Times titled, "The Supreme Court and Obama's Health Care Law" addressed this issue:

Supreme Court justices work differently from judges at the District Court level, noted Jack Balkin, a constitutional scholar at Yale. "Federal District Court judges do not have to deliberate with anyone else," he said. "Multimember courts are affected by who sits with them," and "this is especially true of a nine-person Supreme Court."

Predicting how justices will vote, and especially the reasoning they will use to get there, becomes especially dicey when questions concerning the extent of government power come up.

It is not at all clear how the nine justices of the Supreme Court will vote on the question of whether the individual mandate is constitutional and, if not, whether it is severable from the rest of the Act. What is clear is that the Supreme Court's ultimate decision will have a profound impact on the future of health care in the United States.

For more information on the PPACA or the Individual Mandate please contact Kevin Woodhouse at (317) 236-2154 or kevin.woodhouse@icemiller.com, or Sherry Fabina-Abney at (317) 236-2446 or sherry.fabina-abney@icemiller.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.

March 17, 2011