By Valerie Moore and Frederick Thide
On March 23, 2010, following nearly a year of congressional debate, President Obama signed the Patient Protection and Affordable Care Act (the “ACA” or “Act”) into law.1 The Act is the most significant piece of social welfare legislation since the Great Society, redefining the boundaries between the federal government and the states in the regulation and finance of health insurance.2 Congress relied on the Commerce Clause, the Taxing and Spending Clause, and the Necessary and Proper Clause to enact various pieces of this comprehensive solution to the nation’s health care crisis.
The ensuing litigation over this landmark law may redefine the reach of Congress’s regulatory powers. On March 26-28, 2012, the Supreme Court heard six hours of oral arguments on four issues briefed by the parties and amici. First, the Court considered the threshold question whether the minimum essential coverage provision in Section 1501 (the so-called “individual mandate”) was a tax for the purposes of the Anti- Injunction Act. If so, federal jurisdiction over the individual mandate will be deferred until at least 2015, when individuals who have paid the penalty may sue for a refund. The Respondents and the Government both argued against this result; however, the Court appointed an amicus to brief and argue that the Anti-Injunction Act bars jurisdiction.3 Second, assuming the Anti-Injunction Act does not apply, the Court heard argument on whether the individual mandate exceeded congressional power under Article I of the Constitution. Third, the Court considered severability: if the Court were to hold that the individual mandate is unconstitutional, should any part of the ACA be left standing?4 Finally, the Court considered whether the Act’s Medicaid expansion unconstitutionally coerces the states.5
This high-profile litigation has sparked public interest across the nation, including at Boston University School of Law, where Professors Kevin Outterson and Abigail Moncrieff created a special class, Constitutional Health Care Litigation. Law students from both Boston University and Boston College participated and submitted several amicus curiae briefs to the Court.6 Outterson and Moncrieff were joined by professors from other law schools in Boston and across the nation.
This Article examines the nearly yearlong effort in this class to craft arguments to aid the Court in adjudicating a wide-ranging dispute about the proper role of the federal government in health care. In Part I, this Article sketches the basic structure of the ACA. Part II provides a brief procedural history of ACA-related ligation. Part III and IV then examine the law students’ efforts to craft arguments before the Court to place them within the broader context of the ACA litigation and the recent oral arguments
I. Structure of the Act
The ACA’s primary focus is expanding access to health care coverage. The Act achieves this objective through several mechanisms. First, the Act reforms the small-group health insurance market by greatly restricting medical underwriting.7 In its place, the Act establishes a system of adjusted community rating coupled with guaranteed issue and renewability reforms.8 To compensate for the influx of riskier individuals into private health insurance markets, the Act mandates that qualifying individuals maintain “minimum essential coverage” or pay a so-called “penalty.”9 In addition, the Act eliminates certain health insurance industry practices identified as unfriendly to consumers, including rescissions and caps on coverage.10 Second, the Act provides tax incentives to encourage small businesses to provide coverage to their employees and mandates that certain large employers provide coverage.11 Thus, the Act builds upon the existing system of employer-sponsored health insurance. Third, the Act expands eligibility for Medicaid, thereby creating a uniform health care entitlement for more of the poor.12 Congress provided that the federal government would shoulder all expansion costs initially, requiring the states to gradually assume a maximum of ten percent of the costs associated with the newly eligible population by 2020.13
The balance of the ACA contains an assortment of health care policy provisions, including public reporting of company payments to physicians, longer data exclusivity for large molecular weight drugs, and many attempts to control the increasing costs of health care. Although these provisions were not directly challenged in the litigation, their fate will nonetheless hang in the balance as the Court considers whether, in light of any constitutional infirmities, the bulk of the Act can be salvaged under the doctrine of severability.
II. Taking the Battle to the Courts
On March 24, 2010, only a day after President Obama signed the Act, fourteen states filed a lawsuit in federal district court in Florida. Among other things, the states alleged that the minimum essential coverage provision exceeded the Article I powers of Congress and that the Medicaid expansions were coercively unconstitutional. Numerous lawsuits followed in various federal district courts, challenging everything from the constitutionality of Medicaid itself to whether President Obama was a citizen born in the United States. Constitutional challenges to the minimum essential coverage provision have garnered the most attention, as opponents of the Act have attacked this “pay or play” provision as a mandate that invades personal liberty.14 While these cases were litigated across the country, the case that ultimately made it to the Supreme Court originated in Florida and was heard on appeal at the Eleventh Circuit Court of Appeals.
The Eleventh Circuit held that the individual mandate impermissibly regulates individuals by forcing market entry.15 Accordingly, the court concluded that the mandate is an exercise of the general police power, which is expressly reserved to the states by the Constitution.16 The court further held that the mandate was not essential (i.e., necessary and proper) to implementation of Congress’s broader regulatory scheme.17 Rather, the Eleventh Circuit reasoned that the numerous exemptions and exceptions to the individual mandate and the associated penalty would, in fact, frustrate Congress’s objective of growing the insurance risk pool.18 Thus, the court opined that Congress included the mandate merely to compensate insurance companies for their compliance with the new federal regulatory scheme.19
As to the Medicaid expansion, the Eleventh Circuit held that although the Supreme Court has yet to formulate an administrable test for coercion, the ACA’s expansion of Medicaid falls short of the point where “‘pressure turns into compulsion.’”20 In reaching its holding, the Eleventh Circuit found several factors particularly compelling. First, the court reasoned that the states impliedly waived such challenges because, prior to joining the optional Medicaid program, the states were placed on notice that Congress reserved the right to alter, amend, or repeal the Medicaid Act.21 Second, the court found that the states’ coercion claims were belied by the federal government’s decision to shoulder nearly all costs associated with the ACA’s Medicaid expansion.22 Third, the court noted that Congress had provided the states with reasonable notice to adjust their budgets and, if required, to raise additional revenue to support the expansion.23 The court took pains to note that the states would not be required to provide any funding for the expansion until nearly seven years after enactment, in 2017.24 Further, the court reasoned that the states were left with ample time to arrange for an orderly exit from the federal-state Medicaid partnership by devising alternative healthcare programs.25 Finally, the court observed that the Medicaid Act provides the Secretary with discretion regarding funding decisions related to non-compliance, and thus deeply discounted petitioners’ claim that all Medicaid funding would automatically be lost for failure to comply with the expansion.26 Therefore, consistent with all prior court challenges to Medicaid amendments, the Eleventh Circuit found the states’ claim that the ACA’s Medicaid expansion would leave the states without a real choice unpersuasive.27
III. Briefing the Issues
The goal of making an original contribution drove the search for amicus brief topics in our class. Over 150 briefs were filed with the Supreme Court in this case, many reiterating similar points on the issues. In such a crowded field, we wanted to avoid repeating arguments made by the parties or other amici. The topic that garnered the most attention in the media and in the quantity of amicus briefs filed below was the individual mandate. The Supreme Court surprised most observers when it also granted certiorari on the challenge to the Medicaid expansion because there had been no circuit split on this issue. Accordingly, fewer amicus briefs addressed this topic. The granting of certiorari on the Medicaid expansion also raised concerns for many Medicaid scholars, as there would be no reason for the Court to accept the challenge unless it was seriously considering invalidating the expansion.
When the Supreme Court set the briefing schedule for the challenge to the ACA, it set the deadline for Petitioners to brief the challenge to the individual mandate in early January, followed by severability in early February, and the Medicaid expansion in mid February.28 Three teams from our class wrote individual mandate briefs; our team settled on Medicaid. Professor Outterson reached out to several Medicaid scholars and formed a group of professors who wanted to work with us on the brief. They were eager to provide an amicus brief on this issue because Medicaid has a long history of being expanded by Congress and upheld by the courts without any constitutional controversy at all, which is precisely the point that we chose to make in the brief.
All of the Medicaid briefs filed on behalf of the Petitioner states focused on the financial burdens of Medicaid and general complaints about the program.29 Few offered any substantive legal argument or direct attack on any particular section of the ACA. In writing an appellate brief, one is inherently torn between writing to advance the argument one wants to make, and responding to the arguments made by the other side. Because our brief was in support of the Government as Respondents, we had the advantage of filing after the Petitioner states’ Merits Brief and their amici. After reading what we considered to be gross factual distortions of the program, a major focus of our brief became a factual statement of the history of the Medicaid program, together with the legal precedents for Medicaid expansion. We decided not to respond to some of the more provocative and extreme amici, as this could only give more traction to some of their more audacious claims.
Because many other ideas were floating around, the approach we took was to have various teams write up short 2,000 to 3,000 word sections on various ideas as to what should be in the brief, and then to decide which ones were the most important points to get across and then tie them together. With a strict word limit of 9,000 words, many excellent pages were cut.
One section that survived the editing process looked carefully at the text of the Medicaid expansions in the ACA. This section focused on the structure of the amendments, looking at the way the law was written to try to parse out exactly what part of the statute the states objected to. Because the states did not identify which precise part of the Title II expansion was coercive, part of the brief walks through the elements of the expansion they do mention and explains why each provision is not coercive.
Throughout assembling the brief, the group informally consulted with other groups who were writing amicus briefs in support of Respondents, as well as attorneys at the Department of Justice. While we were solely responsible for writing our brief, coordinating with other groups was essential to make sure that we were not repeating arguments that they would make. We also wanted to avoid unknowingly undermining arguments made by the Respondents, who had to file their brief only a week before ours. By the time their Merits Brief was filed, it was too late to make any changes to our brief, except for small changes at the margin.
After many drafts, our nearly final brief was circulated to health policy scholars across the country in the first week of February. More than 50 signed on to the brief, which was filed on February 17, 2012. At oral arguments on March 28, 2012, several questions seemed directly taken from our brief, although the Justices did not mention it by name.
IV. Oral Argument
The provision of the Social Security Act which gives the Secretary of Health and Human Services the discretion to withdraw some or all of a state’s Medicaid funding if the state does not comply with the program requirements received a lot of attention from the Justices.30 Justice Breyer questioned the Petitioners on how the provision could be an issue when it had been in the Social Security Act since 1965, while Chief Justice Roberts and Justice Kagan questioned the Respondents on how the Secretary had exercised that discretion in the past and how the Secretary might use it in the future.31 Justice Ginsburg asked the Petitioners whether it mattered that some states liked the Medicaid expansion and wanted to keep it, an argument that we made in our brief.32 Some of the material from our brief also appeared in a question by Justice Breyer, when he asked how the current expansion could be found unconstitutionally coercive without jeopardizing the past expansions.33 Justice Kennedy questioned the Respondents on the Maintenance of Effort provision, which we had discussed at some length.34
From the months of heated debate leading up to its passage, to the challenges to the ACA filed immediately after the legislation was passed, to the extraordinary volume of amici the case has attracted at every stage of litigation, the story of healthcare reform is replete with voices from every part of the ideological spectrum. Our brief is one voice in a discussion that will continue long after the Supreme Court hands down its opinion in June and will hopefully inspire others to engage in a conversation that affects every resident of the United States. We are grateful that Boston University School of Law offered this unique class this year.
Valerie Moore is a 2012 graduate of Boston University School of Law. During law school, Ms. Moore worked at the law firm of FerriterScobbo&Rodophele, PC, Tufts Medical Center, and the Access to Justice Initiative of the Massachusetts Trial Court, in addition to performing research on several public health law issues for Professor Wendy Mariner. Ms. Moore also served as a Writing Fellow during her second year of law school. She received her undergraduate degree in political science and economics summa cum laude from the University of Massachusetts at Amherst in 2009.
Frederick Thide is a law student at Boston College Law School, where he serves as managing editor of the Boston College Law Review. Mr. Thide recently participated in a class at BU Law, where he worked with a team of students and professors to prepare an amicus brief defending the Affordable Care Act’s historic expansion of Medicaid. He served as an intern for the Honorable William G. Young of the U.S. District Court for the District of Massachusetts and as a summer law intern with the FTC’s Bureau of Competition.
1 Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by Healthcare and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010).
2 See Abbe R. Gluck, Intrastatutory Federalism and Statutory Interpretation: State Implementation of Federal Law in Health Reform and Beyond, 121 Yale L.J. 534, 582-94 (2011).
3 For a thoughtful critique of the Court’s practice of appointing amici to defend orphaned arguments, see Brian P. Goldman, Note, Should the Supreme Court Stop Inviting Amici Curiae to Defend Abandoned Lower Court Decisions?, 63 Stan. L. Rev. 907 (2011).
4 Severability is often described as a doctrine of judicial restraint. See Adrian Vermeule, Saving Constructions, 85 Geo. L.J. 1945, 1946 (1997) (describing severability as “a norm of legislative supremacy positing that statutes should take effect to the full extent the Constitution permits”). When a court finds that part of a statute is unconstitutional, it seeks to preserve the legislative bargain so long as (1) Congress would have passed the statute but for the constitutional defect and (2) the statute is capable of functioning without the severed provision. See Tom Campbell, Severability of Statutes, 62 Hastings L.J. 1495, 1505-06 & n.51 (2011).
5 Although the Court has paid lip service to the concept of coercion, it has never invalidated a federal law on this ground. See, e.g., South Dakota v. Dole, 483 U.S. 203, 211-12 (1987); Steward Mach. Co. v. Davis, 301 U.S. 548, 590 (1937).
6 E.g., Brief of Jewish Alliance for Law & Social Action et al. as Amici Curiae Supporting Petitioners, Dep’t of Health and Human Servs. v. Florida, No. 11-398 (U.S. Jan. 13, 2012) (Individual Mandate), available at http://aca-litigation.wikispaces.com/file/view/Jewish+Alliance+amicus+%2811-398%29.pdf; Brief of Health Law & Policy Scholars et al. as Amici Curiae Supporting Respondents, Florida, 11-400 (U.S. Feb. 17, 2012) (Medicaid Expansion), available at http://aca-litigation.wikispaces.com/file/view/Health+Law+%26+Policy+Scholars+amicus+%2811-400+Medicaid%29.pdf.
7 See 42 U.S.C.A. § 18091.
8 See id.§§ 300gg-1(a), 300gg-3, 300gg-4(a).
9 26 U.S.C.A. § 5000A (West 2011) (effective Jan. 1, 2014). The individual mandate ensures that the cost of covering higher-risk individuals (e.g., the elderly and chronically ill) is subsidized by lower-risk individuals (e.g., the young). See Roger L. Pupp, Community Rating and Cross Subsidies in Health Insurance, 48 J. Risk & Ins. 610, 610–11 (1981).
10 See, e.g., 42 U.S.C.A. § 300gg-12 (ban on rescissions); id.§ 300gg-11 (no lifetime or annual limits).
11 26 U.S.C.A. §§ 45R, 4980H (West 2011).
12 See 42 U.S.C.A. § 1396a(a)(10)(A)(i)(VIII) (West 2003 & Supp. 2011); Sara Rosenbaum, Realigning the Social Order: The Patient Protection and Affordable Care Act and the U.S. Health Insurance System, 7 J. Health& Biomedical L. 1, 16–17 (2011).
13 See 42 U.S.C. § 1396d(y)(1). To permit the states adequate time to plan for shouldering their relatively modest share of implementation costs, the federal government will pay all expansion costs between 2014 and 2016. Id. Thereafter, the states’ share will gradually increase before reaching a capped contribution of 10 percent in 2020 and subsequent years. Id.
14See Abigail Moncrieff, The Freedom of Health, 159 U. Pa. L. Rev. 2209 (2011).
15 See generally Comment, In Search of Limiting Principles: The Eleventh Circuit Invalidates the Individual Mandate in Florida v. U.S. Department of Health and Human Services, 53 B.C. L. Rev. 359 (2012).
16 Florida v. U.S. Dep’t of Health & Human Servs., 648 F.3d 1235, 1311-13 (11th Cir. 2011).
17 See id. at 1309-11.
18 See id.
19 Id. 1310.
20 See id.at 1265-68 (quoting Steward Mach. Co., 301 U.S. at 590).
21See id. at 1267 (citing 42 U.S.C. § 1304); see also Harris v. McRae, 448 U.S. 297, 301 (1980).
22 Florida,648 F.3d at 1267-68.
23 Id at 1268.
24 See id.
26 Id. (citing 42 U.S.C. § 1396c).
27 See id. (“These factors convince us that the Medicaid-participating states have a real choice—not just in theory but in fact—to participate in the Act’s Medicaid expansion.”);see also Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498, 502 (1990) (noting that participation in Medicaid is voluntary but subject to conditions).
28 Brad Joondeph, A Tentative Briefing Schedule, ACA Litigation Blog (November 14, 2011), http://acalitigationblog.blogspot.com/2011/11/timing.html.
29 E.g., Brief of Indiana State Legislators, the James Madison Institute, and Christopher Conover, No. 11-400 (U.S. Jan. 17, 2012), available athttp://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/briefs/11-400_petitioner_amcu_isl.authcheckdam.pdf
30 42 USC §1396(c), see generally Transcript of Oral Argument, Florida v. U.S. Dep’t of Health and Human Services (No. 11-400).
31 Transcript of Oral Argument at 12, 49, Florida v. U.S. Dep’t of Health and Human Services (No. 11-400).
32 Id. at 20.
33 Id. at 24.
34 Id. at 52.