Health Reform May Be Headed Back to Supreme Court in 2013

January 1, 2013, Interview by Jason Kane, PBS NewsHour

Should old acquaintance be forgot and never brought to mind? Maybe not for the Affordable Care Act.

Looks like 2013 will include many of the characters who made 2012 such a nerve-racking year for the health care reform law — everyone from state-level leaders hoping to prevent its full implementation to Supreme Court justices deciding the law’s fate. The nation’s highest court may have upheld a central pillar of the law last summer — the so-called “individual mandate” that most Americans either purchase health insurance or pay a fine — but that doesn’t mean the rest of the ACA is free from debate.

Questions are slowly percolating through the lower courts — with some possibly headed toward the Supreme Court — about contraception coverage, the Senate’s ability to “originate” a tax and the legality of the online insurance marketplaces known as exchanges.

For an overview of where all these new challenges stand, we turn once again to Marcia Coyle of the National Law Journal.

NewsHour: Marcia, how do these new lawsuits relate to the Supreme Court’s decision last summer?

Coyle: The justices last June decided two core questions about the law’s constitutionality. A 5-4 majority held that the minimum insurance requirement, the so-called individual mandate, was a valid exercise of Congress’ taxing power, but not its commerce clause power. A 7-2 majority also held that the expansion of the federal-state Medicaid program for the poor and disabled unconstitutionally coerced the states into participating in the expansion by threatening to withhold states’ Medicaid funds. But the justices’ decision in that case — National Federation of Independent Business v. Sebelius — did not stop lawsuits challenging other aspects of the health care law.

NewsHour: What types of lawsuits are now working their way through the courts?

Coyle: There are several types. The largest group, about 42 cases, challenge a federal regulation under the law that requires all group health plans and health insurance issuers, unless grandfathered or otherwise exempt, to cover preventive care and screenings for women. The Department of Health and Human Services issued an interim rule in August 2011 that exempted certain organizations with religious objections to contraception. A number of religious colleges and other employers sued, claiming the contraception mandate violates their deeply held religious beliefs.

NewsHour: Have any of those lawsuits been successful?

Coyle: A number of the lawsuits have been dismissed as premature because the Health and Human Services Department interim rule created a safe harbor from enforcement of the contraceptive coverage requirement for employers with religious objections, which remains in effect until the first plan year that begins on or after August 1, 2013. The department also said it intended to “develop and propose changes to these final regulations that would meet two goals”: providing contraceptive coverage without cost-sharing to covered individuals and accommodating the religious objections of nonprofit organizations. Two notable developments occurred in December, one of which may lead directly to the Supreme Court.

The U.S. Court of Appeals for the 10th Circuit on Dec. 20 denied a request for an injunction to halt enforcement of the contraception mandate in a case brought by Christian-owned and operated Hobby Lobby craft stores. The family owners claimed they had no moral objection to the use of preventive contraceptives and would continue covering preventive contraceptives for their employees. However, they said their religious convictions prohibit them from providing or paying for abortion-inducing drugs, the “morning-after” and “week-after” pills. The federal court held that the religious burden on them was “indirect and attenuated.”

Their lawyers went to the Supreme Court for an injunction to block enforcement of the contraception coverage mandate while they pursued their court challenge. On Dec. 26, Justice Sonia Sotomayor, who handles emergency requests from the 10th Circuit, denied the injunction, explaining that Hobby Lobby did not meet the rigorous standard for this type of court order. She said Hobby Lobby could seek Supreme Court review after its lower court appeals were finished, if it wished to do so.

Just two days later, another federal appeals court — the 7th Circuit — temporarily barred enforcement of the contraception mandate against an Illinois construction company whose Roman Catholic owners also claimed it violated their religious beliefs.

Hobby Lobby and the Illinois company are for-profit businesses. The Obama administration has argued that the Religious Freedom Restoration Act, relied on by the two companies in their lawsuits, does not insulate secular, for-profit businesses from this regulation.

Both cases may reach the Supreme Court in 2013.

The District of Columbia federal appellate court put on hold lawsuits by two religious colleges challenging the contraception insurance mandate. That court said the lawsuits will be held in abeyance until the federal government makes good on its promise to issue a final new rule that exempts employers like the religious colleges. The court also ordered the government to provide it with status reports every 60 days.

NewsHour: Do those lawsuits have the potential to strike down the health care law?

Coyle: No. They raise important issues, but do not involve a central issue of Congress’ authority to enact the law.

NewsHour: What other lawsuits are percolating in the lower courts?

Coyle: There is a constitutional challenge involving the process used by Congress to enact the health care law. The conservative Pacific Legal Foundation has sued, arguing that if, as the Supreme Court held, the individual mandate is a tax, then it is an unconstitutional tax because it originated in the Senate and not in the House of Representatives as required by the Constitution for bills raising revenue. This lawsuit is based on the Constitution’s origination clause. The challengers say the Senate inserted the health care law’s provisions into a “shell” bill, a House-passed bill whose contents were stripped and replaced by the health care amendments. Some court scholars see this lawsuit as a long shot because courts in the past have given Congress a lot of deference with legislation passed in a similar fashion.

NewsHour: What are the lawsuits involving the insurance exchanges?

Coyle: There is a tax case brought by the attorney general of Oklahoma that could create problems for the federal government in the operation of those exchanges. The attorney general challenges a recent IRS rule which extends tax credits and subsidies to the purchase of health insurance in federally operated health insurance exchanges created in states that have refused to establish their own exchanges. The federal law, according to the lawsuit, authorizes those credits and subsidies only to state-operated exchanges. Oklahoma, which has refused to create an exchange, says the IRS rule violates state sovereignty.

NewsHour: When do you think the Supreme Court may look at some of these cases?

Coyle: Any of the losing parties in these lawsuits can petition the Supreme Court for review once their case is finished in the lower courts, and that includes the federal government. But petitioning the Court is no guarantee that the justices will agree to take any of the cases. A case raising religious objections to contraception coverage may have the best chance of eventually being reviewed, but we will have to wait and see.