High court set to hear health care case this week

All eyes are on health care as the U.S. Supreme Court gets set to hear arguments March 26-28 on the constitutionality of the 2010 health care law.

The high court will weigh multiple questions about the law, but a central issue is whether the law’s “individual mandate,” or requirement that all Americans purchase health insurance, is constitutional. Twenty-six states and the National Federation of Independent Business argue that the individual mandate is unlawful.

Justices are also being asked to determine whether the rest of the law should move forward if the individual mandate is ruled illegal. The National Restaurant Associationhas filed an amicus brief asking the court to strike down the rest of the law if justices find the individual mandate unlawful.

The U.S. Supreme Court will hear oral arguments this week in a lawsuit challenging the constitutionality of some segments of the Patient Protection and Affordable Care Act – most notably the mandate that most individuals must purchase health insurance or be fined.

The Court chose to consider four questions that could determine whether the law stands:

  1. Is the consequence for not complying with the individual mandate a tax or penalty? If a tax, the Court cannot rule on the case until it is paid ‑ in 2015.
  2. Is the individual mandate unconstitutional? Can individuals be required to purchase health insurance or face fines for noncompliance?
  3. If the individual mandate is ruled unconstitutional, is it severable from the rest of the law? Or does the entire law fall? Maybe it’s just the individual mandate that falls, or the mandate plus guaranteed issue and community rating? That would force healthy individuals to subsidize the health-care costs of higher-risk consumers. Similarly, guaranteed issue world require insurers to approve coverage for all individuals.
  4. Is the expansion of Medicaid, which would permit coverage for everyone with incomes of less than 133 percent of the federal poverty level, unconstitutional? If so, can it be stricken?

Severability would seriously affect restaurants. The reason: the Court chose not to directly consider the constitutionality of the employer mandate. For the employer mandate to fall, either the individual mandate or Medicaid expansion must be found unconstitutional and bring the rest of the law down with it. An article recently published in FLAME magazine explained the industry’s position in favor of severability.

While an outcome cannot be assumed based on the Justices’ line of questioning, we can analyze the arguments for possible industry impact.

The National Restaurant Association will recap the Supreme Court arguments and what the ruling could mean for restaurants in a member-exclusive webinar, March 29, 3 p.m. ET. Seyfarth Shaw, the firm that filed the NRA’s Supreme Court brief, will analyze the court’s arguments. Register for the March 29 webinar.