The Patient Protection and Affordable Care Act, (“PPACA”), contains a minimum health coverage requirement known as the “individual mandate.” The individual mandate requires that all non-exempt individuals maintain basic health insurance, or else pay a penalty. See 26 U.S.C. 5000A (2010). The PPACA states that Medicare, Medicaid, and CHIP are qualifying insurance programs. Proponents support the provision because it extends healthcare to currently uninsured individuals. In contrast, opponents argue that upholding the provision will enable the federal government to coerce individuals into buying goods and services unrelated to healthcare.
In the debate on health care reform, no issue is more controversial than the Patient Protection and Affordable Care Act’s (“PPACA”) minimum health coverage provision, also known as the “individual mandate.” The individual mandate requires that every individual have health insurance, or be subject to a penalty. Whether the U.S. government can impose a penalty on citizens that do not purchase health care plans may depend on the framing of the penalty. The Obama Administration maintains that this individual mandate is valid under Congress’s power to tax. However, opponents argue that the penalty is not a tax, but rather an unconstitutional penalty. The answer to this question could determine the overall constitutionality of the PPACA.
Guaranteed-Issue Provision Background
When health insurance is issued on a guaranteed-issue basis, the insurer cannot deny applicants insurance based on their state of health. The guaranteed-issue provision in the Patient Protection and Affordable Care Act (“PPACA”) is Congress’ attempt to eliminate “discrimination based on health status” by the insurers. See Brief for Private Petitioners on Severability at 10–11. In effect, the Act’s guaranteed-issue provision mandates that insurers must provide health insurance to any person, regardless of medical history or current state of health. See id. at 11. Moreover, the health care premiums must be offered at an averaged rate that does not necessarily reflect the actuarial risk. See id. In addition to banning discrimination based on the current state of health of the individual, Congress also restricts the ability of the insurer to limit the scope of coverage. See id. For example, insurers must provide certain basic services, and cannot impose lifetime limits on coverage or unreasonably increase premium prices. See id.
In 1965, Congress added Title XIX to the Social Security Act, and created the program now known as Medicaid. Medicaid.gov; Social Security Act, 42 U.S.C. § 1396. Medicaid was founded to provide health care funding to low-income adults. See Medicaid.gov. Created by the federal government, the program runs on a state-by-state basis; the federal Centers for Medicare and Medicaid Services (“CMS”) monitors each state-run program. See id. The CMS sets minimum requirements for eligibility standards, funding, services provided, and the quality of care. See id.
The Patient Protection and Affordable Care Act (“PPACA”) contains a number of provisions affecting Medicare, a government health insurance program. See generally Pub. L. No. 111-148, 124 Stat. 119 (2010).
One important question that the Supreme Court will likely address is whether the Anti-Injunction Act (“AIA”) bars challenges against the Patient Protection and Affordable Care Act’s (“PPACA”) minimum health coverage requirement (the “individual mandate”). See Dep’t of Health & Human Serv. v. Florida, 181 L. Ed. 2d 420 (U.S. Nov. 14, 2011). This issue went largely unnoticed until the United States Court of Appeals for the Fourth Circuit ruled that the AIA applies to a challenge to the individual mandate’s penalty, and, therefore, that courts lack jurisdiction to hear challenges to the penalty. See Liberty Univ. v. Geithner, No. 6:10-CV-00015 (4th Cir. Sept. 8, 2011). Somewhat unexpectedly, the AIA has the potential to alter the course of the health care litigation; if found to be applicable, the AIA may block all suits, both private and public, brought against the individual mandate, because courts may be deemed to lack subject matter jurisdiction until the mandate’s penalty is actually assessed against a party. See Brad Joondeph, The Anti-Injunction Act Complications, Health Reform Watch, Sept. 12, 2011; see also Liberty Univ. v. Geithner, No. 6:10-CV-00015 (4th Cir. Sept. 8, 2011).