Story highlights

Applicability of Anti-Injunction Act will be first question before justices, on March 26

Provision requiring Americans to have health insurance will be the key argument

Lawyers will argue whether rulings on mandate's constitutionality affect entire law

States challenging law are saying it coerces them to expand Medicaid

Washington CNN  — 

The Supreme Court has carved out a week in late March to hold oral arguments in perhaps its biggest case in a decade – the sweeping healthcare reform law championed by President Obama.

The court announced Monday it will hear 5½ hours of arguments spread over three days March 26-28.

The Patient Protection and Affordable Care Act (PPACA or ACA) was signed into law March 23, 2010, passed by a Democratic congressional majority with the support of the president. It has about 2700 pages and contains 450 some provisions.

A ruling from the court is expected by late June and regardless of the outcome, will become a major issue in a presidential election year.

The largest and broadest legal challenge to the Patient Protection and Affordable Care Act comes from a joint filing by 26 states, led by Florida. It was that series of appeals the high court had accepted for review.

At issue is whether the “individual mandate” section – requiring nearly all Americans to buy health insurance by 2014 or face financial penalties – is an improper exercise of federal authority. The states also say that if that linchpin provision is unconstitutional, the entire law must be also go.

Joining Florida in the challenge are Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.

Four issues will be addressed by the Supreme Court:

Anti-Injunction Act

First, the court on March 26 will consider whether those challenging the law be barred from making any legal or constitutional claims until the individual mandate actually goes into effect in 2014.

The AIA – in place since the 19th century – bars claimants from asking for a refund on a tax until that tax has been collected and paid. Judges in two federal appeals courts have made that argument, which would effectively stop the current legal fight in its tracks. Citing that law might give the court a way out of deciding the explosive issue in an election year.

The majority could decide the political branches can best resolve the conflicts, at least for now, or that the matter can be handled after the November elections. Some court watchers have called this the health care “sleeper issue.” It could potentially delay a decision on the constitutionality of the individual mandate for at least four years.

Individual mandate

The court will hear two hours of arguments on this most key issue on March 27. This provision requires nearly all Americans to buy some form of health insurance beginning in 2014, or face financial penalties. May the federal government, under the Constitution’s Commerce Clause, regulate economic “inactivity”? Three federal appeals courts have found the PPACA to be constitutional, while another has said it is not, labeling it “breathtaking in its expansive scope.” That “circuit split” all but assured the Supreme Court would step in and decide the matter.

The Florida-led coalition of say individuals cannot be forced to buy insurance, a “product” they may neither want nor need. The Justice Department has countered that since every American will need medical care at some point in their lives, individuals do not “choose” to participate in the health care market. Federal officials cite 2008 figures of $43 billion in uncompensated costs from the millions of uninsured people who receive health services, costs that are shifted to insurance companies and passed on to consumers.


This is the “domino effect” issue, and the court will hear 90 minutes of argument on this aspect on March 28.

If the individual mandate section is ruled unconstitutional, must the entire law collapse as well? A federal judge in Florida had ruled as much in February: “Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.”

But a federal appeals court overruled on the severability question, while upholding the individual mandate’s unconstitutionality. Opponents of the law say the individual mandate is crucial to the overall law, since it is the main funding mechanism for the expansion of a range of other programs. This may be the one question on which the justices will ultimately agree in favor of the government.

Medicaid ‘coercion’

Can states be forced by the federal government to expand their share of Medicaid costs and administration, with the risk of losing that funding if they refuse? The court will devote an hour to that question on March 28.

The 28 GOP-led states say the new law’s significant expansion of the social safety net unconstitutionally “coerces” state governments. That program is administered by the states with a combination of federal and state money, currently requiring coverage only for poor children and their parents or caretakers, adults with disabilities, and poor individuals over age 65. The “coercion” issue was surprisingly added to the healthcare debate by the justices.

Both sides of the issue agree what the high court decides on this question could have monumental implications for the regulatory ability of the federal government to set long-term national policy goals in areas like the environment, education, and the workplace.

Some states have long complained their autonomy is being eroded by creeping federal intervention on spending matters. Article 1 of the Constitution gives Congress the power “lay and collect … taxes to pay the debts and provide for the common defense and general welfare of the United States” and to “regulate commerce… among the several states.” Such authority has long been broadly interpreted, including when imposing conditions on recipients, including individuals and states. No federal court has ever ruled states have been unlawfully coerced when they accept conditions or strings attached to federal funds. The Supreme Court in 1987 affirmed that congressional discretion.

The PPACA’s Medicaid changes – beginning in 2014 – would make millions of additional Americans eligible for benefits, by raising the income level they earn and still qualify. That would include all adults, up to 133% of the federal poverty line. The tricky question is that states are not forced to agree to the law’s incremental Medicaid increases, spread out over six years. But the states say abandoning their participation as a result would be a financial, social, and political catastrophe– one which they cannot realistically foresee. Their needy citizens rely on Medicaid, states argue, but the law’s expansion of the program could cripple state budgets, currently on average about 20-percent. That would threaten other state spending priorities.

So the long-standing fight over “federalism” and the leverage the national government wields over states may soon reach epic levels with a high court decision either strengthening – or limiting – congressional authority on this and potentially a host of other regulatory areas.

The cases are Dept. of Health and Human Services v. Florida (11-398); NFIB v. Sebelius (11-393); and Florida v. HHS (11-400).