John Roberts on Health Care
Supreme Court Justice (nominated by Pres. George W. Bush 2005)
The court decided in King v. Burwell that tax subsidies are being provided lawfully in three dozen states that have decided not to run the marketplaces for insurance coverage.
The question in the case was what to make of a phrase in the law that seems to say the subsidies are available only to people buying insurance on "an exchange established by the state." Chief Justice Roberts wrote that the words must be understood as part of a larger statutory plan. "In this instance," he wrote, "the context and structure of the act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase."
Roberts said that it was unconstitutional for Congress to order people to buy private health insurance under the Commerce Clause: "Under the government's logic, that authorizes Congress to use its commerce power to compel citizens to act as the government would have them act."
He THEN joined the 4 liberal justices to say that the government could TAX people for not buying health insurance. He wrote, "The federal government does not have the power to order people to buy health insurance; the federal government does have the power to impose a tax on those without health insurance."
So while the $695 penalty imposed for not buying health insurance would otherwise be unconstitutional, 5 justices said they would consider the penalty a tax, which would make it constitutional under Congress's authority to tax.
But Roberts recognized that "people, for reasons of their own, often fail to do things that would be good for them or good for society. Those failures can readily have a substantial effect on interstate commerce. Under the Government's logic, that authorizes Congress to use its commerce power to compel citizens to act as the Government would have them act. That is not the country the Framers of our Constitution envisioned. The Framers gave Congress the power to REGULATE commerce, not to COMPEL it, and for over 200 years, both our decisions and Congress's actions have reflected this understanding. There is no reason to depart from that understanding now. "
The government's lawyer, Solicitor General Donald Verrilli, made a strong case for the government's taxing power. While the taxing power argument was certainly not the focus of post-oral arguments analyses, it was the one that eventually won the day--that the mandate would be administered by the Internal Revenue Service, the agency responsible for taxation. Verrilli said, "It is administered by the IRS; it is paid on your Form 1040 on April 15th," when pressed by Roberts.
Some of the toughest questioning came as it related to the president arguing the mandate was not a tax. But Verrilli countered that it's up to the court to decide what's justified under the law, not the rhetoric of politicians.
A 5-4 Court decided that federal jurisdiction does not extend to controversies over insurance contracts under the Federal Employees Health Benefits Act. Thus, state courts are the proper venue for contract disputes arising between federal employees and insurance companies, which may result in inconsistent outcomes across states.
Empire Healthchoice Assurance sued the estate of a deceased federal employee who received $157,000 in insurance benefits as the result of an injury. The wife of this federal employee had won $3.2 million in a separate lawsuit; Empire Healthchoice claimed reimbursement because the beneficiary was compensated for the same injury by a third party.
Plaintiffs were prescribed a brand name drug for which pharmacists substituted a generic drug, which the FDA had approved under the process federal law authorized for generics. Plaintiffs were diagnosed with a disorder linked to the extended use of the drug. They filed state tort law claims against the manufacturers of the generics, alleging failures to label their products with a warning of known risks. The generics carried the same warnings as the brand name and, the manufacturers argued, since federal regulations required the generics to have the same warnings as the brand name, compliance with a state law requiring different warnings was impossible.
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Ruth Bader Ginsburg
Sandra Day O'Connor
John Paul Stevens
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