June 29th, 2012
A Watershed Court Case? The Affordable Care Act and the Role of the U.S. Government in Healthcare
At first blush, the upholding of the Affordable Care Act (ACA) by the Supreme Court appears to preserve the status quo, at least until next year when there may be a different occupant in the White House. However, a closer look at the opinions reveals a potential fundamental shift in the relationship between federal and state governments. This shift may not be felt for years, but it may eventually change U.S. health care forever.
First, some background: The argument against the constitutionality of ACA was based on a less conventional interpretation of the Commerce Clause of the Constitution, which allows the federal government to “regulate interstate commerce.” Since the New Deal, the Commerce Clause has been interpreted quite broadly, allowing the federal government to involve itself in matters with only a tenuous relationship to commerce across state lines. In fact, it would not be an exaggeration to suggest that many scholars think this clause, with some limited exceptions, empowers the federal government to pass nearly any economic regulation it chooses. Since the New Deal, the Supreme Court has generally agreed with this interpretation; the Commerce Clause has almost never been used to rein in federal authority.
Others argue for a much more limited view of this clause, maintaining that it constrains federal regulatory power far more tightly than currently envisioned. Thus, they argue that an individual mandate is unconstitutional because forcing people to buy health insurance could not be reasonably be considered “regulating interstate commerce.”
With the Supreme Court’s decision on the ACA, a majority of the court agreed with that basic argument. Justice Roberts found the ACA constitutional not because he thought its individual mandate could be justified as “interstate commerce,” but because he felt it was a tax. He agreed with four of his brethren that the Commerce Clause was not a blank check, allowing the federal government the power to mandate or regulate anything it wishes.
Some think this is the beginning of a judicial effort to place clear constitutional limits on federal economic authority, a process that may unfold over many years. The implications for health care are vast. Take, for example, medical malpractice liability reform: Physician groups have been advocating for comprehensive tort reform at the federal level, including imposition of damage caps. The possible benefits of tort reform, including decreased defensive medicine, increase in physician supply, etc. become significant when implemented at a federal level. However, “federalizing” these reforms are likely contingent upon an expansive view of the Commerce Clause. If the Court is beginning to reject this view, would federal tort reform efforts survive judicial scrutiny? Time will tell….