Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.
THIS WEEK'S BRIEFING - APRIL 2, 2012
- House Passes FY 2013 Budget Committee Resolution
- Does the AIA Preclude Ruling on the PPACA's Constitutionality Before 2014?
- Is the PPACA's Individual Mandate Constitutional under the Commerce Clause?
- What Portion of the PPACA Should Survive if the Individual Mandate Falls?
- Does the PPACA Unlawfully Coerce States to Accept Medicaid?
- The Aftermath
- Big Data Research and Development Initiative
- FDA Issues
- IPAB Repeal Needs Technical Restart in House
- Recently Introduced Health Legislation
House Passes FY 2013 Budget Committee Resolution
Before recessing for two weeks until April 16, the House voted along party lines 228 to 191 to pass H. Con. Res. 112, a resolution to limit FY 2013 appropriations to $1.028 trillion and to cut about $4 trillion in spending over fiscal years 2014 through 2022. The cap is $19 billion below the $1.047 trillion spending cap agreed to under the Budget Control Act (BCA) and insisted on by the Senate. The resolution directs six House committees to cut mandatory spending by $261 billion.
As to health-related matters, the House plan would:
- repeal the PPACA
- raise the Medicare eligibility age from 65 to 67 between 2023 and 2034;
- provide for a voluntary Medicare voucher system to begin in 2023
- provide for the repeal of the current Medicare physician payment SGR system and use a deficit-neutral reserve fund as an offset for its replacement
- block grant the Medicaid and food stamp programs
- increase funding for anti-fraud programs.
The House voted down six alternative proposals, including a Democrat amendment that would, among other things, cap discretionary spending at $1.043 trillion (as under the BCA), keep the current Medicare and Medicaid structure and fund the implementation of the PPACA.
Of note, the House also killed, 38-382, a bipartisan substitute authored by Reps. Jim Cooper and Steven LaTourette which mirrors, to a degree, the President’s Deficit Reduction Commission proposal (Simpson/Bowles). Inasmuch as the House resolution was declared dead in the Senate, the passage of all FY 2013 appropriations bills before the end of this fiscal year remains in doubt. It appears that a continuing resolution will push at least some FY 2013 spending decisions past the November elections. The low vote total of the Cooper/LaTourette attempt to push for a “big deficit reduction solution” concdoes not bode well for a lame-duck compromise to reduce long-term deficits and to resolve the BCA mandate for $1.2 trillion in ten-year spending cuts.
Does the AIA Preclude Ruling on the PPACA's Constitutionality Before 2014?
Last Monday the Supreme Court began its deliberations on the PPACA health reform law by hearing arguments on whether the Anti-Injunction Act (AIA) precludes any decision on the constitutionality of the individual mandate until the mandate and related penalties for non-compliance become effective in 2014. In 90 minutes of argument, a majority of the justices appeared skeptical that the penalties rise to the level of a “tax” which would invoke the AIA and preclude the court’s jurisdiction to render a decision this year. For example, Justice Stephen Breyer questioned whether the AIA should apply since it is intended to prevent interference with a federal revenue source, which in this case, it is not. Of note, Justice Samuel Alito questioned why the DOJ argued on Monday that the penalty for not purchasing coverage is not a tax, while the government is expected to argue on Tuesday that for constitutional purposes it is a tax and, thus, allowed under the Constitution’s commerce clause.
Is the PPACA's Individual Mandate Constitutional under the Commerce Clause?
On Tuesday, the Court heard two hours of argument on whether the commerce clause is broad enough to validate the individual mandate. The plaintiffs (including Florida and 26 states) stated their case that the mandate is unprecedented and exceeds congressional authority. The questions posed by Chief Justice Roberts and Justices Alito, Kennedy and Scalia appeared skeptical of the DOJ Solicitor General’s arguments that the mandate does not exceed congressional authority under the commerce clause or should otherwise be upheld because the penalty for non-compliance is a “tax”. For example, Justice Scalia asked, “The President said it wasn’t a tax, didn’t he?” Even Justice Elena Kagan observed that Congress made a “determined effort” not to label the penalty as a tax. Justice Scalia appeared to take on the commerce clause argument in the most direct fashion when he said “The federal government is not supposed to be a government that has all powers….It’s supposed to be a government of limited powers.”
Chief Justice Roberts suggested that the court would be hard pressed to come up with a limit on the extent of the commerce clause if the individual mandate is upheld. In particular, Justice Kennedy asked the Solicitor General, without receiving a satisfactory response, how the court could present a rationale for upholding the commerce clause and distinguish it from future federal actions. Justice Kennedy suggested that the government faces a “very heavy burden of justification” for the mandate and that the provision “changes the relationship of the government to the individual in a fundamental way.” However, Justices Breyer, Ginsburg and Kagan came to the defense of the solicitor general several times. For example, Justice Ginsburg referred to an amicus brief showing that uncompensated care in Maryland increased consumer costs by 7% in arguing that, because the uninsured are passing on their health care costs to the insured, the federal government can regulate them. Also, Justice Sotomayor suggested that the government can force citizens to purchase insurance prior to needing it “because you can’t buy it at the moment you need it.”
During the arguments presented by the plaintiffs, Chief Justice Roberts observed that the key to the DOJ’s argument is that everyone is in the health care market, which differentiates health care from other products, and that the government is attempting to regulate how health care is paid for. However, the plaintiff’s representative objected to this observation when he argued that some U.S. residents do not consume health care or purchase insurance.