Legal Challenges

The insurance industry told the Supreme Court this week that certain parts of the healthcare reform law would be unworkable without a requirement that most people buy insurance.

America’s Health Insurance Plans said the court should fully address the question of severability — how much, if any, of the healthcare law should fall if the coverage mandate is ruled unconstitutional. Insurers have not taken a position on whether the mandate is constitutional, but rather have focused on how it interacts with other policies in the healthcare law.

The law require insurers to cover people with pre-existing conditions and limits how much more they can charge those patients. AHIP said those policies will dramatically increase the cost of insurance without the individual mandate — and emphasized that the Obama administration agrees.

When Congress passed the reform law, there was “powerful proof that decoupling the mandate from those other requirements would destabilize the insurance market throughout the Nation,” AHIP said in its Supreme Court brief.

A thorny procedural issue could complicate the push for a quick and decisive ruling on the individual mandate's constitutionality.

The Justice Department argued this week that if the Supreme Court strikes down the healthcare law’s individual mandate, it also has to ax two popular provisions of the law.

Courts have reached differing conclusions on the question of “severability” — whether finding the mandate unconstitutional requires striking down the rest of the law. The lower court in the case now before the Supreme Court said the mandate could be struck down on its own, without affecting other parts of the healthcare law.

But the Justice Department said in a Supreme Court brief this week that two other provisions have to be struck down if the high court finds the mandate unconstitutional. The court would also have invalidate policies that require insurers cover people with pre-existing conditions and prohibit them from charging those people higher premiums, the brief says.

Without the mandate, Justice said, those policies “would not advance Congress’s efforts to make affordable coverage widely available.”

The federal government downplayed the magnitude of a Supreme Court ruling on the healthcare reform law, one of the groups suing over the law said Friday.

The National Federation of Independent Business (NFIB) said the government’s Supreme Court brief “does not fully convey the exceptionally important nature” of a ruling on the healthcare law’s individual mandate. Both NFIB and the Justice Department have asked the high court to rule quickly on whether the mandate is constitutional.

NFIB made the comments Friday in its response to the Justice Department’s appeal to the Supreme Court. Although the group said the government had understated the stakes, it mostly agreed with the department on how the court should proceed.

The Justice Department asked the court to hear the suit filed by NFIB and 26 state attorneys general, while denying an appeal in a separate case. NFIB agreed with that recommendation, saying that consolidating the two cases would be unnecessarily complicated.

House Budget Committee Chairman Paul Ryan (R-Wis.) on Thursday predicted that the Supreme Court will strike down the healthcare reform law’s individual mandate, and exuded confidence that, in any case, the law will be repealed and replaced in 2013.

Ryan said Justice Anthony Kennedy is the key vote on the issue and that the only cliffhanger is whether the entire reform will be struck down or just the mandate requiring the purchase of health insurance. Kennedy often serves as the swing vote in close Supreme Court decisions.

“I think [the court] will knock down the individual mandate,” Ryan said at the Washington Ideas Forum. “The question is of severability.”

Lawyers for California and the federal government urged the Supreme Court on Monday not to let patients and doctors sue over cuts to Medicaid payments. 

The court's decision could have national implications — if the court rules for the patients and doctors, that could open the floodgates for suits in any state that tries to cut its Medicaid rates, which many have done as they face tight state budgets and swelling Medicaid rolls. Healthwatch's Sam Baker has more here.

Home-health hustle: The nation's three largest home-health companies bilked Medicare out of potentially millions of dollars by tailoring medical care to get the highest payments, the Senate Finance Committee said in a 664-page report released Monday.

The new report says the home-health agencies ordered unnecessary therapy visits in order to benefit from Medicare bonuses for reaching certain thresholds.

Healthwatch's Julian Pecquet has more.

Cantaloupe questions: Energy and Commerce Democrats are demanding the panel investigate the listeria outbreak that has killed at least 15 people. Ranking member Henry Waxman (D-Calif.) and Oversight subpanel ranking member Diana DeGette (D-Colo.) wrote to their Republican counterparts Monday demanding a hearing on the issue. Healthwatch has more. 

Lawmakers question Thomas’s failure to disclose hundreds of thousands of dollars his wife received from groups opposing the healthcare law.

Every party in the case asked the Supreme Court Wednesday to decide the issue — and quickly.

If the court takes the case, it will likely rule by June 2012 — just months before the presidential election.

The petition comes days after Obama passed on an opportunity to delay a high court ruling until after the election.