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August 6, 2012

ABA Panel Tackles Health Care Reform and the Limits of Congressional Power

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During an Annual Meeting session sponsored by the ABA Health Law Section,panelists discuss the Supreme Court's ruling in National Federation of Independent Businesses v. Sebelius that upheld the Affordable Care Act.

When President Eisenhower nominated Earl Warren for chief justice of the United States, he praised the jurist’s integrity and courage. Years later, Eisenhower changed his tone when he reportedly characterized Warren’s appointment as the “biggest damn fool mistake I ever made.”

Since the Supreme Court’s landmark ruling in National Federation of Independent Businesses v. Sebelius that upheld the Affordable Care Act, many conservative critics have had a similar change of heart about the court’s key swing vote — Chief Justice John Roberts.

Lawyers and law professors convened at the _ Annual Meeting in Chicago to discuss the limits of congressional power in light of the split decision that kept the Obama administration’s signature accomplishment largely intact.

Lawyer Carter Phillips said that “as a lawyer who is above 40, I grew up with a Congress that could do anything,” but following the Supreme Court health care ruling, he added, that Congress may be a thing of the past. Although the court upheld the health care mandate component of the law, a side provision that would have cost states their Medicaid funding if they did not expand coverage to more of their citizens was struck down.

Video: Litigator Discusses Supreme Court’s Commerce Clause Ruling in Healthcare Reform Case

Phillips was “surprised as anybody” the way the court ruled, but recognizing that “health care takes up about one-sixth or one-fifth of the economy” was grounds for a Commerce Clause defense. Article I, Section 8, Clause 3 states that “The Congress shall have the Power … to regulate Commerce … among the several States.” That broad language has been used across the centuries to sustain expansive legislation that vaguely touches on issues of trade between states. Many court watchers expected the court to rule per the clause, but Chief Justice Roberts dispensed with that argument, saying it would be an unprecedented expansion of the clause. The chief justice instead declared the ACA constitutional according to Article I, Section 8 that gives Congress the power to tax.

Columbia Law School Vice Dean Gillian Metzger explained that taxes were a primary concern for the framers of the Constitution. After the Articles of Confederation failed, the framers recognized that any new government needed a steady flow of revenue, and taxing individuals directly was specifically added. “It’s been a broad power,” said Metzger, adding that the chief justice’s reliance on that power is interesting because the word “tax” is not used anywhere in the ACA. “[Justice Roberts] is very uncomfortable with the court invalidating the mandate just because Congress used the wrong label.”

Video: Columbia Law School Vice Dean Explains the Tax Power Used to Uphold Health Care Reform

Washington, D.C., lawyer Jonathan Franklin also considers NFIB v. Sebelius to be “one of the more surprising decisions.” What is most surprising for Franklin, however, is the failure of the Medicaid provision. “No one could have conceivably thought that could have happened.”

Video: Expert Surprised by Court’s Rejection of Healthcare Reform’s Medicaid Expansion

Looking ahead, the panelists are torn as to how the reasoning of the case will be applied in the future. There was general agreement, however, that the Medicaid decision will have political and legal consequences. Phillips sees the litigation risks arising from this ruling as “extraordinarily high.” Franklin does not know how the decision will be interpreted for future cases, but he believes that the Medicaid component will be a headache for hospitals that are less likely to recoup the cost of the care they give to indigent and homeless patients. Texas Governor Rick Perry has already refused to expand Medicaid coverage, thus denying his state $164 billion in additional federal aid, although existing funding is now safe. Texas has 17 million uninsured residents, the highest of any state. “Very few of the people who are going to be cut out of Medicaid are going to vote for him anyway,” said Franklin.

This panel was sponsored by the ABA’s Health Law Section and co-sponsored by the Government and Public Sector Lawyers Division, Senior Lawyers Division, Young Lawyers Division, Section of Litigation, Tort Trial and Insurance Practice Section, Section of Taxation, Standing Committee on Medical Professional Liability and the Special Committee on Bioethics and the Law.