What happens if Supreme Court overturns health care law?

What happens if Supreme Court overturns health care law?

By Kurt Manwaring, KSL.com Contributor | Posted - Dec. 21, 2011 at 12:20 p.m.



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SALT LAKE CITY -- President Barack Obama entered the Oval Office in 2009 amidst rallying cries of hope and change.

One change he immediately sought to bring about was the implementation of national health care reform. Although it cost a great deal of political capital, Obama signed the Patient Protection and Affordable Care Act into law in late March 2010.

Before the next election, the Supreme Court will examine the constitutionality of this legislation. Its holding will have dramatic consequences for our country, including the cost of health care and the outcome of the 2012 elections.

The Supreme Court will be examining four central issues:

First, the justices will examine the applicability of the Anti-Injunction Act. This law prohibits individuals from seeking refunds until a tax has actually been assessed. In particular, the Supreme Court will be looking to see if the constitutionality of penalties associated with the individual mandate should be reviewed before related fines have actually been levied and paid.

Second, the Supreme Court will examine the constitutionality of the individual mandate. Likely the most controversial of all the legislation’s provisions, the mandate requires most Americans to either purchase health insurance — or pay a fine. The Supreme Court will be looking to see if the legal rationale behind the mandate gives Congress more power than is authorized by the constitution, or if the mandate is constitutional.

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Third, the Supreme Court will examine the issue of severability. The individual mandate is the central funding source for the legislation. If it is ruled unconstitutional, is the rest of the legislation automatically void as well, or can the rest of the legislation be deemed constitutional and separate from the mandate? If so, can the legislation survive financially without the mandate?

Lastly, the Court will examine whether the federal government can coerce states into expanding their Medicaid programs. The health care legislation lowers the bar when it comes to determining who is eligible for Medicaid.

In Utah, this means more than 100,000 individuals will become newly eligible for Medicaid in 2014. The Court will be looking to see if the health care reform illegally coerces states to expand their Medicaid programs.

While the Supreme Court may rule in any number of ways, three outcomes are thought to be most likely. First, the Supreme Court could uphold the constitutionality of the legislation. Second, the Supreme Court could hold the legislation — in part or as a whole — is unconstitutional. Lastly, the Supreme Court could rule that it is premature to examine the legislation because most of it has yet to actually take effect.

Assuming the Supreme Court rules the law to be unconstitutional, the impact of the holding will be far reaching. Two issues will be briefly examined in this series: (1) the cost of health care and (2) the 2012 elections.

Cost of health care

If the Supreme Court overturns health care reform, the high costs of health care will likely continue to rise. Health care costs in the United States have been rising for decades. In 1980, total health care expenditures in the United States were approximately $253 billion. In 2008, total expenditures were greater than $2.3 trillion. The Centers for Medicare and Medicaid Services estimate those costs will grow to more than $4.4 trillion by 2019. Something clearly needs to be done— and as far as Obama and many Democrats were concerned, ACA was the answer.

What happens if Supreme Court overturns health care law?
Photo: Manwaring Consulting Graphic

The legislation signed into law by Obama is certainly not a perfect fix. Numerous compromises were necessary even within the Democratic Party to get the bill through Congress — a reality which meant the law would have to be amended later on to ultimately achieve its objectives.

Nevertheless, the legislation does seek to lower the costs of health care — and is likely to be successful to some degree. If the Supreme Court rules health care reform is unconstitutional, it will deal a severe blow to one of the only solutions that have been put forth. In other words, ACA is far from perfect, but it may still be effective in slowing the rising costs of health care.

If the Supreme Court rules against reform, health care costs will likely continue to rise at an unsustainable rate.

2012 elections

The impact on the 2012 elections will be significant if health care reform is ruled to be unconstitutional.

Health care reform is far from the only issue of relevance in the upcoming election cycle. In fact, Neera Tanden, a former Obama administration official argues that voters are suffering from health fatigue “and that the court’s decision will make little difference in the election.”

At the same time, a strong argument can also be made that the Supreme Court's decision could solidify, if not strengthen, negative public opinion toward the legislation — as well as the president behind it.

Obama’s poll ratings are remarkably low compared to when he first took office, but he is still faring well in 2012 projections against potential Republic foes. The roller coaster race that is the Republican presidential primary appears to be settling down with Mitt Romney and Newt Gingrich as the two top candidates.

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Of the two, Romney poses the greatest statistical challenge to Obama. Former Utah Gov. Jon Huntsman could also surprise the nation with a strong showing in New Hampshire — an early primary state where he is doing nothing but steadily climb in the polls.

If Obama faces a Republic candidate who shows strongly in the general election, the stigma of a health care reform law overturned by the Supreme Court mere months before Super Tuesday could be enough to swing the election in favor of the Republican nominee.

The Supreme Court’s ruling is expected no later than June 2012. If the Supreme Court rules health care reform — in part or in its entirety — is unconstitutional, there will be a domino effect of consequences that impact Americans in a variety of ways. These consequences include rising costs of health care and a handicap for Democrats in the 2012 elections.

The next article in this series will examine the impact on the cost of health care and the 2012 elections if the Supreme Court holds that health care reform is constitutional.

This is the first in a series of two articles addressing the consequences of the Supreme Court’s decision on health care reform.

Kurt Manwaring is pursuing a graduate degree in public administration at the University of Utah. He is a consultant with Manwaring Consulting, LLC and maintains a personal blog at www.kurtsperspective.blogspot.com.

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