Sorting the Reform Law Options Before the Supreme Court

President Obama in March 2010 signed into law the Patient Protection and Affordable Care Act, implementing enormous changes in the U.S. health care industry.

Almost immediately, opponents of the law filed lawsuits challenging its constitutionality. Those suits have wound through the courts and now the Supreme Court will have its say, with oral arguments in January and an opinion expected by this June. The core issue for the Court is whether the individual mandate requiring all persons have health insurance is constitutional-whether Congress exceeded its authority.

There are three basic scenarios for how the court could rule, and each will affect provisions of the law, including at least seven provisions with a strong focus on health information technology. The scenarios for a ruling are:

* The individual mandate is constitutional so the law stands as is;

* The individual mandate is unconstitutional but everything else in the law is constitutional; or

* The individual mandate is unconstitutional and as a result, that renders the entire law unconstitutional.

In the first scenario, the obvious effect is that nothing changes with the health care reform law. Things will get tricky, however, under the other scenarios. But first, a look at where the case stands.

The Court decided to review a Court of Appeals ruling that the individual mandate in the reform law is unconstitutional and cannot be severed, or separated, from the rest of the law and therefore the entire law is void.

Judge Roger Vinson, senior judge in the Northern District of Florida, Pensacola Division, ruled with considerable reluctance that the mandate was not severable from the rest of the law because while the mandate was "necessary and essential" to the law as written, it is not "necessary and essential" to health care reform in general.

"Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void," Vinson ruled. "This has been a difficult decision to reach, and I am aware that it will have indeterminable implications. At a time when there is virtually unanimous agreement that health care reform is needed in this country, it is hard to invalidate and strike down a statute titled, 'The Patient Protection and Affordable Care Act.'"

Vinson in his ruling seemed to try to set the terms of what the Supreme Court should consider. He made clear that his ruling was based on constitutionality issues and not the merits of the reform law itself. "I emphasized once before, but it bears repeating again: this case is not about whether the Act is wise or unwise legislation, or whether it will solve or exacerbate the myriad problems in our health care system. In fact, it is not really about our health care system at all. It is principally about our federalist system, and it raises very important issues regarding the Constitutional role of the federal government."

In addition to the Florida case, the Supreme Court also will consider parts of other Appeals Court rulings. On the question of the individual mandate, the Supreme Court could punt and not rule on the issue, declaring the question of constitutionality to be premature.

Under the mandate, the government would issue tax penalties to people not insured by 2014. The Court will consider arguments that the federal Anti-Injunction Act prohibits legal challenges until taxpayers start to pay a penalty. An Appeals Court in Virginia ruled opponents to health reform did not have legal standing because penalties have yet to be paid. The Supreme Court further will consider the constitutionality of significant expansion of state Medicaid programs.

A story in the January issue of Health Data Management, “Next Stop for Reform: Supreme Court,” examines the effect of various rulings on health information technology initiatives, speculation on how the Court may rule, and what provisions could be resurrected by Congress if the Court throws out the law.