Not so Fast

Obamacare may be back at the Supreme Court this year

It was that sage Yogi Berra, who once observed “It ain’t over ‘til it’s over.” When the United States Supreme Court ruled last June on the constitutionality of portions of the Affordable Care Act (ACA), most people thought that the constitutionality of the law was finally decided. Those tricksters on the Supreme Court look like they may be ready to take another whack at President Obama’s signature domestic initiative.

In the June 2012 ruling, in a closely divided decision, the Court ruled to (1) uphold the individual mandate as a valid exercise of Congress’ power under the Taxing Clause. Importantly, the Court established a new fundamental precedent that the Commerce clause of Congressional power does have limits. And, the Court further ruled to (2) uphold the expansion of the Medicaid population, but prohibit the federal government from withholding existing (non-expansion) Medicaid funds for non-compliance with the expansion requirements. Thus the high court created a new second part to Medicaid.

In late November 2012, the Supreme Court ordered a lower court to reopen an old challenge to the health reform law. If the suit before the lower court is ultimately successful, it could mean that the law could be before the high court sometime in 2013.
The lawsuit challenge comes from Liberty University in Lynchburg, Va. Like the numerous states in the first round, Liberty University challenged the individual mandate contained in the ACA. However, Liberty University’s challenge went further. It challenged Obamacare’s mandate that employers with 50 or more employees must provide healthcare coverage beginning in 2014 and, as part of that requirement, such employers must provide coverage for contraception and abortion. This part of the ACA was not addressed in the June 2012 ruling at all.

After the June 2012 ruling, most people thought the Liberty University case was not going anywhere. The Fourth Circuit Court of Appeals said it could not rule in the case because the ACA provisions in question had not gone into effect. In the Fourth Circuit Court of Appeals view, Liberty University did not yet have standing.
The June 2012 Supreme Court ruling before the mandate took effect, raised doubts about the Fourth Circuit Court of Appeals ruling. So, Liberty University asked the Supreme Court to reconsider its case against the employer mandate. The Supreme Court agreed and ordered the Fourth Circuit Court of Appeals to hear the challenge again.

The case’s importance
According to Liberty University and a group of legal scholars opposed to ACA, the case touches on some important constitutionally protected freedoms. The first aspect is familiar, that Congress does not have the power under the Commerce Clause to enact the mandate. Maybe Congress can enact certain taxes under the Taxing Clause, as the Supreme Court ruled in June 2012. However, some argue that the particulars of the first case (Nat. Fed’n of Indep. Bus. v. Sebelius, together with Florida v. Dept. of HHS and Dept. of HHS v. Florida) did not directly address the Commerce Clause issue related to the employer mandate. If the Supreme Court does rule for Liberty University on this point, it would mean that the linchpin of the ACA, the employer mandate, is unconstitutional. Without the employer mandate, Obamacare’s coverage requirements would not be viable.

If the premise of increasing the pool of insured to drive down the cost of insurance is correct, what happens if large employers get jerked from the pool? Without these employers acting as a counterforce in the balance of the marketplace, wouldn’t it be reasonable to assume that insurance premiums would rise? And, if this happens, how many employers will walk away from covering employees and just leave their employees to fend for themselves in the subsidized health insurance exchanges? At this point, the federal government would not be able to afford the subsidization of health insurance for such a large swath of the American public. On this potential alone, the smart guys at the White House are keeping an eagle-eye on the Liberty University case.

There is another aspect to the Liberty University case that is worth noting. They make the argument that because the employer mandate could require them to pay for insurance for abortions; it is unconstitutional as it applies to them – because of their anti-abortion beliefs – as well as to other religious affiliate organization which also oppose abortion. The University further argues that the fines they would pay under the ACA would go to fund the state health insurance exchanges which don’t prohibit abortion. At the heart of their argument, Liberty University argues that Obamacare would violate their religious beliefs as well as those of other like-minded organizations. This would be a violation of the First Amendment protections of free exercise of religion and freedom of association. There appear to be other than just religious organizations interested in the outcomes of this case. Implications from a negative ruling would not be lost on a number of secular organizations concerned about free association rights.

Not many in health policy are paying attention to this case right now. They should be. Liberty University is serious about its religious convictions, which they believe the employer mandate in the ACA violates. Fulfilling their role as an employer under the requirements of the mandate violates their religious convictions. Their First Amendment arguments if the case goes to the Supreme Court will be powerful.

Some believe the employer mandate is on shaky ground if the Commerce Clause is the reason for its existence. It will be interesting to see how the Supreme Court would rule if forced to just focus on the Commerce Clause as constitutional authority for enacting the employer mandate. And, by highlighting the First Amendment religious protections, Liberty University may just overturn Obamacare, forcing it back in the legislative lap of our Congress. “It ain’t over ‘til it’s over.”