March 26, 2012
Authored by: benefitsbclp
Update: Audio of today’s arguments are now available here.
Over the next few days we are going to post brief descriptions of the arguments the Supreme Court will hear in U.S. Department of Health and Human Services, et al. v State of Florida, et al., the case challenging the landmark health reform law, the Patient Protection and Affordable Care Act (“PPACA”). As the audio of the oral arguments is released, we will post any links to the audio here.
By way of background, there are three parties to this litigation: (1) the U.S. Government who is defending the constitutionality of the law, (2) individuals (sometimes jointed by the National Federation of Independent Businesses) who are essentially arguing that they are harmed by the requirement to purchase insurance, and (3) 26 States, some of which are advocating that the individual mandate violates laws they have passed and some of which are advocating that the Medicaid expansion enacted under the health reform law is unconstitutionally coercive.
First up is the 90 minutes of argument on the Anti-Injunction Act.
What are they arguing about? The Anti-Injunction Act (the “AIA”) is a tax statute that prevents anyone from suing to preemptively prevent the collection or assessment of a tax. Its purpose is to keep all of us from suing about taxes we do not like until after the IRS has had a chance to determine how the tax will be enforced and assessed. Once the tax is assessed, we can either pay the tax and then sue to recover the tax or refuse to pay it and wait for the IRS to pursue collection action. In either case, we can then use our challenge to the collection of the tax to challenge its validity (constitutional or otherwise).
What does the U.S. Government say? Actually, it says the AIA does not prevent the suit because it is a penalty not a tax, and penalties are not subject to the AIA.
What do the Individual Parties say? They agree! They also argue that, even if the AIA applies to the penalty, their challenge is actually to the mandate requiring individuals to purchase insurance coverage, not the penalty that enforces it.
What do the State Parties say? They agree! They also argue that the AIA does not apply to them, but for different reasons. Most notably, because the States have a separate challenge on the grounds that the expansion of Medicaid in the health reform act is unconstitutionally coercive, they say the AIA should not reach their challenge either.
So who is arguing the AIA applies? The Supreme Court appointed a special counsel to argue in favor of the AIA’s application. Basically, the argument is that the penalty is not meaningfully different than a tax to which the AIA applies.
Why does this matter? If the Supreme Court finds that the AIA applies to the individual mandate, it means that the whole suit challenging the minimum coverage provision gets (temporarily) thrown out on its ear and we will have to wait for someone to be assessed the tax and sue in 2015.
Interesting fact: At the district court level, the U.S. Government argued the challenge was barred by AIA. However, they lost that argument and have now changed sides.