Supreme Court and Obamacare: Day One of the Hearings

National   Steven Ertelt   Mar 26, 2012   |   12:32PM    Washington, DC

The Supreme Court this week will take on the Obamacare health care law — opposed by pro-life groups because it funds abortions and prompts rationing concerns. The Court will hear a total of six hours worth of oral argument over the next three days considering various issues brought up in the lawsuits against it.

Edward White, a pro-life attorney with the ACLJ, outlined what the Supreme Court considered today, on the first day of the hearings:.

During the three days, the Court will consider four issues: (1) whether the individual mandate (which requires Americans to buy health insurance from private companies for the rest of their lives or pay annual penalties) is constitutional; (2) whether the individual mandate is severable from the rest of ObamaCare and, if not, whether the entire law should be invalidated; (3) whether the Medicaid expansion is constitutional; and (4) whether the Anti-Injunction Act (“AIA”) applies to this case.

Today, the Court will consider the AIA issue. Tomorrow, March 27, the Court will hear oral argument on the individual mandate issue, and it will hear oral argument on the severability and Medicaid issues on Wednesday, March 28.

The Court has set aside one and one-half hours of oral argument for the AIA issue. If the Court determines that the AIA applies, the Court (and other federal courts) would be barred for several years from deciding the individual mandate and severability issues. Application of the AIA would not prevent the Court from considering the Medicaid expansion issue now.

The AIA was enacted in 1867 to stop lawsuits that seek to prevent the federal government from assessing and collecting taxes. Under the AIA, a person subject to a truly revenue-raising tax provision cannot file a lawsuit before the tax has been assessed or collected; if he does, a federal court must dismiss the lawsuit. The person generally must first pay the tax that the federal government claims is due and then file a lawsuit to challenge the legality of the tax and obtain any refund.

For the Supreme Court to decide that the AIA applies to the ObamaCare litigation, it would have to conclude that the penalty designed to enforce the individual mandate is a tax. If the Court decides that the AIA applies, the Court would be unable to decide the constitutionality of the individual mandate and its severability for several years.

The individual mandate takes effect on January 1, 2014. For a person refusing to purchase health insurance after that date, his penalty is due and owed at the time he pays his federal income taxes. That would be no later than April 15, 2015. Thereafter he could pay the penalty and then file a lawsuit challenging the constitutionality of the mandate and penalty.

A lawsuit filed in 2015 would reach the Supreme Court in 2017 at the earliest. Assuming that ObamaCare is not repealed before then, the Supreme Court would not likely issue a decision on the individual mandate and severability for at least three years after the mandate has been implemented and enforced.

Philip Klein of the Washington Examiner also takes a look at what the High Court is considering this week.

The core question facing the Supreme Court this week in the suit initiated by 26 states led by Florida and the National Federation of Independent Business is whether Congress exceeded its authority by enacting a mandate requiring individuals to purchase health insurance or pay a penalty. But under the Anti Injunction Act, any challenges would have to wait until after individuals actually start paying penalties — which would effectively put off any constitutional challenges until 2015.

On this issue, both the states challenging the law and the Obama administration agree that the Anti Injunction Act shouldn’t apply in this case. Delaying a decision on the ultimate constitutionality of the mandate for at least another three years would create  much uncertainty for states considering whether or not to implement the health care law.

Because the sides agree, the court appointed an attorney to make the case that the Anti-Injunction Act does apply here, a position taken in an opinion out of the Fourth Circuit Court of Appeals.

Though this morning’s arguments don’t concern the underlying merits of the challenges, in order for the Anti-Injunction Act to apply, the mandate would have to be seen as a tax. Thus, there is some overlap with one of the key defenses the Obama administration is offering for the mandate – that it is a constitutional exercise of the taxing power. So we may get some clue as to the justices’ thinking on the tax issue.

Kate Hicks also helps decode what the Supreme Court is considering today.

On the agenda today is one question: Is the individual mandate noncompliance penalty a tax? It may seem a trivial distinction – indeed, neither the federal government nor the states et al argue in the affirmative – but the Court’s answer will affect whether it grants a ruling on the other three questions.

The best way to understand why this question matters is to rephrase it like this: Is it too soon for the Court to consider whether the individual mandate is constitutional? In fact, this is hardly an arcane technical debate on a term. This is the Court’s last chance to sidestep a ruling on the individual mandate.

According to a Fox News report, the Surpeme Court appeared ready to take on Obamacare and engaged in a vigorous debate over whether the mandate constituted a tax.

But all parties in this case happen to agree, albeit for different reasons, that the law doesn’t preclude the justices from moving forward.  And the justices appeared to be on the same page, as the first day of hearings wrapped up Monday around noon. The justices disputed the notion that the insurance penalty is tantamount to a tax and therefore subject to that 1867 law.

“This is not attached to a tax,” Justice Stephen Breyer said.

Justice Ruth Bader Ginsburg, who like Breyer is considered to side on the liberal end of the bench, also said the law “is not a revenue-raising measure.”

“If it’s successful, there’s no revenue to raise,” she said.

Meanwhile, Klein said after the hearing that Chief Justice John Roberts was skeptical that the mandate can be separated from penalty: “Why would you have a requirement that is completely toothless?”

Listen to audio of today’s oral arguments here.