Supreme Court

Obamacare May Be Headed Back to the Supreme Court


Obamacare May Be Headed Back to the Supreme Court

Illustration by 731

The legality of the Affordable Care Act appeared settled when the Supreme Court upheld the law last year. Not so, it turns out. Scores of lawsuits around the country are targeting parts of Obamacare, making another high court showdown all but inevitable and raising the possibility that some provisions in the health-care overhaul could be dismantled. “This law is going to be litigated up and down for years,” says Jonathan Adler, who directs the Center for Business Law and Regulation at Case Western Reserve School of Law.

The next clash may be over the requirement that employer-provided insurance plans include contraceptive coverage; a case involving that issue could reach the high court this year. Hobby Lobby, a family-run craft store chain, and at least 34 other companies have sued for an exemption. They say the birth-control mandate violates their religious freedom, forcing them to provide something they consider immoral. “The government has plenty of other ways to deliver these drugs,” says Mark Rienzi, a lawyer for the Becket Fund for Religious Liberty. The group represents Hobby Lobby, whose owners say they run the company “consistent with Biblical principles.”

The core legal question is whether companies can assert the same rights as people—the very issue that drove an ideological wedge through the court in the 2010 Citizens United case, which cleared the way for corporations to spend unlimited sums on political campaigns, just as individuals can. The Obama administration says for-profit corporations aren’t covered by the Religious Freedom Restoration Act, which is designed to protect the rights of “a person.” One federal appeals court backed Hobby Lobby in June; in late July, a different appeals court rejected a similar claim by a Mennonite-owned cabinet maker in Pennsylvania, Conestoga Wood Specialties. The at-odds rulings create the type of lower court division that often triggers Supreme Court review.

Two other suits threaten to undercut a key aspect of the law: the subsidies set up to help low-income people buy insurance through the online marketplaces known as exchanges. One case is being pressed by Scott Pruitt, Oklahoma’s Republican attorney general, the other by Michael Carvin, who helped argue the case against Obamacare at the Supreme Court last year. Pruitt and Carvin are making an argument that, if successful, would free some people from the penalties Obamacare imposes for not getting coverage. They say the law makes subsidies available only to people who buy insurance through state-run exchanges. Republican governors or legislatures in more than half of U.S. states refused to set up exchanges, so the federal government is stepping in to do it for them. Pruitt and Carvin say the law’s language on subsidies doesn’t apply to the federal exchanges. A ruling in their favor would abolish those subsidies in much of the country and by extension let more people claim that insurance is unaffordable. Under an exemption in the law, people who can’t afford insurance don’t have to pay the penalty.

The legal challenges stem from what Case Western’s Adler says is the law’s slipshod wording. In the rush to get Obamacare through Congress, “The bill didn’t get to go through the normal flyspecking that a large regulatory statute usually goes through,” Adler says. “You have all these provisions that aren’t written the way people had hoped.” Defenders of the Affordable Care Act say Congress’s intent to make subsidies broadly available was clear, even if its wording wasn’t.

Two other challenges filed by conservative groups are now on appeal. The Goldwater Institute, on behalf of an Arizona doctor, is trying to block the Independent Payment Advisory Board that Republicans once dubbed a “death panel.” The board is supposed to impose Medicare cuts if spending exceeds inflationary targets; the Goldwater Institute contends the agency would exercise vast authority with little oversight, in violation of separation-of-powers principles.

The Pacific Legal Foundation is pressing the second suit for a small business owner in Iowa who wants to invalidate the entire law for violating the constitutional requirement that revenue-raising bills originate in the House. The Senate passed Obamacare first, though it did so by amending a House-passed bill on an unrelated subject. A trial judge found that procedure to be adequate and said the origination clause didn’t apply anyway because revenue-raising wasn’t the main purpose behind the law. “It’s just like trench warfare in World War I,” says Tim Jost, a health law professor at Washington and Lee School of Law. “It’s going to be, ‘Fight every hedgerow, fight every ditch.’ ”

The bottom line: More than 30 companies are fighting a part of Obamacare that forces them to offer birth-control coverage to employees.

With Alex Wayne
Stohr is a reporter for Bloomberg News in Washington.

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