Affordable Care Act Still Faces Legal Challenges, Resistance From States
Although the U.S. Supreme Court upheld the Affordable Care Act in June, some of its core provisions still face challenges in courts and at the state level, Politico reports.
Three lawsuits pending in federal court, which originated from California, Oklahoma and Virginia, target the law's insurance mandates and subsidies. Some policy experts suggest that the suits could dismantle key elements of the law if the challenges are successful.
Pacific Legal Foundation Lawsuit
Earlier this month, the Pacific Legal Foundation in California announced that it is supporting a lawsuit by a private individual against the ACA's individual mandate (Kenen, Politico, 11/13).
In the 5-4 Supreme Court ruling written by Chief Justice John Roberts, the majority reaffirmed the law's requirement that most U.S. residents must purchase health insurance by 2014, or pay a penalty. However, Roberts noted that the "financial penalty for not obtaining health insurance may reasonably be characterized as a tax" and is therefore constitutional (California Healthline, 6/28).
The PLF-supported lawsuit argues that the health reform law and the individual mandate are unconstitutional because the health reform bill was first passed in the Senate -- instead of in the House -- in violation of the Constitution's Origination Clause. Under the clause, tax-related bills must originate and first pass in the House. Lawyers from the Department of Justice have argued that while the mandate might be considered a tax, the ACA is not a revenue law but a law with revenue components (Politico, 11/13).
In September, Oklahoma Attorney General Scott Pruitt (R) filed a lawsuit arguing that the federal government does not have the authority to administer subsidies to help U.S. residents purchase coverage in federally run health insurance exchanges or to penalize businesses for not offering coverage.
Oklahoma -- which previously filed a lawsuit in 2011 that stalled in federal district court after the Supreme Court agreed to review the multistate lawsuit -- has said that it will not create its own insurance exchange. As a result, Pruitt's lawsuit contends that employers in Oklahoma should not be subject to the employer mandate, which penalizes companies that do not offer affordable coverage to workers if those workers receive a federal subsidy (California Healthline, 9/26).
Washington and Lee University law professor Tim Jost said Congress clearly intended for the subsidies to be available in the federal exchanges regardless of whether the state or the federal government administers the exchanges. Jost expressed doubt that Pruitt's argument would stand in court, but he acknowledged that a victory by the plaintiffs would undermine the ACA (Politico, 11/13).
Liberty University Lawsuit
Last month, the Obama administration agreed to allow the 4th U.S. Circuit Court of Appeals to revive a lawsuit by Liberty University. The lawsuit argues that Congress exceeded its constitutional authority by requiring the university and other similar entities and businesses that employ more than 50 people to provide health insurance coverage. Liberty said it potentially could face as much as $1.1 million in fines if the requirement is upheld.
The lawsuit also claimed that the individual mandate violates the school's and individuals' religious rights because some of the money collected through new insurance regulations would be used to cover abortion, which the university opposes. In September 2011, judges at the 4th Circuit Court ruled 2-1 that the plaintiffs do not have standing to challenge the individual mandate because the federal Anti-Injunction Act requires U.S. residents to wait to oppose a tax until after it is collected (California Healthline, 11/1).
Jost said Liberty's renewed claims lack merit, noting that the judges at the 4th Circuit appeals court already issued their decision in the earlier version of the case. If the revived case is sent to the same panel, the plaintiffs "will get a very unfriendly hearing," he added, noting that the Supreme Court also "doesn't want the case back on the individual mandate."
Contraceptive CoverageÂ Lawsuits
Meanwhile, legal challenges to the federal contraceptive coverage rules under the ACA also raise critical arguments about religious freedom, according to Politico.
The lawsuits are on hold until HHS determines which organizations will be exempt from having to cover employees' birth control. However, cases filed by businesses whose owners object to the policy on moral grounds could proceed and eventually could be heard by the Supreme Court (Politico, 11/13).
Insurance Market Rules Could Provoke State Battles
Another hurdle for the ACA relates to major changes to insurance market regulations that might provoke fights in Republican-controlled states that have delayed creating their own health insurance exchange, CQ HealthBeat reports.
The regulations for requirements such as the guaranteed issue, age rating and standards for essential health benefits could be released as early as Tuesday. In some states, insurance officials can take the initiative to issue the regulations that would require state policies to align with federal law, according to some experts.
However, legislative action might be required in other states ahead of the October 2013 deadline to begin accepting applicants in the new exchanges. Insurance companies would need to know the state rules governing their products before they can create the policies available in the exchanges, according to CQ HealthBeat (Norman, CQ HealthBeat, 11/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.