Supreme Court to Decide the Fate of Healthcare Law

The Supreme Court agreed Monday to decide the fate of President Barack Obama’s healthcare law, with an election-year ruling due by July on the U.S. healthcare system’s biggest overhaul in nearly 50 years.

President Obama is signing the health care bill into law at the White House on March 23, 2010. On Monday, the Supreme Court announced it would hear a case on the law's constitutionality. Photo: Talk Radio News Service/Flickr

The decision had been widely expected since late September, when the Obama administration asked the nation’s highest court to uphold the centerpiece insurance provision and 26 states and a business group separately asked that the entire law be struck down.

A Supreme Court spokeswoman said oral arguments would take place in March. There will be a total of 5-1/2 hours of argument. The court would be expected to rule during its current session, which lasts through June.

The law, aiming to provide more than 30 million uninsured Americans with medical coverage, has wide ramifications for company costs and for the health sector, affecting health insurers, drugmakers, device companies and hospitals.

Moreover, the law, Obama’s signature domestic achievement, will be a major issue in the U.S. elections in November 2012 as he seeks another four-year term. Republican presidential candidates oppose the law and Republicans in Congress want to repeal it.

At stake now is whether Congress has the power under the Constitution to require all Americans to buy health insurance — a linchpin of the new law.

Conservatives have made the “individual mandate” a key part of their argument that Obama and congressional Democrats tried to expand government regulation to an unprecedented degree.

Democrats argue that the requirement will help control costs and spread the risk. Otherwise, individuals could refuse to buy insurance until they were taken to a hospital with a medical emergency.

In 2008, hospitals, insurers and taxpayers paid $43 billion to cover the medical costs racked up by uninsured people.

Norman Ornstein of the American Enterprise Institute, a Washington think tank, said the ruling would have a polarizing effect on the Republican and Democratic faithful but a minimal impact on Obama’s standing with middle-of-the-road voters who often decide elections.

“My guess is that for voters in the middle if the Supreme Court says the law is constitutional that probably makes them a little bit happier with Obama. If they say it’s unconstitutional that may make them a little less happy,” he said.

“Probably no court case in modern times would have the impact this would” in the middle of a presidential campaign, said Ed Rollins, who directed Ronald Reagan’s 1984 reelection.

The impact comes both because the case involves one of the most hotly debated issues of the campaign, and because the decision will come at a key moment of the general election contest — most likely June of next year.

The high court could leave in place the entire law, it could strike down the individual insurance mandate or other provisions, it could invalidate the entire law or it could put off a ruling on the mandate until after it has taken effect.

If the court rules for Obama, the president will be able to say that in his first term he had enacted a healthcare plan “that people have been trying to accomplish since Roosevelt was president, and ‘I got it done,’ ” said Democratic strategist Paul Begala.

The healthcare dispute has sharply divided Democrats and Republicans. In the main case before the court, Republican officials from Florida and 25 other states asked the justices to strike down the sweeping set of insurance rules and healthcare subsidies that were passed by Democrats in the House and Senate with no GOP support.

Paul Heldman, senior analyst at Potomac Research Group, which provides Washington policy research for the investment community, said he still leaned toward the view that the law’s requirement that individuals buy insurance will be upheld.

“We continue to have a high level of conviction that the Supreme Court will leave much of the health reform law standing, even if finds unconstitutional the requirement that individuals buy coverage,” he wrote in a recent note.

The administration has said other landmark laws, such as the Social Security Act, the Civil Rights Act and the Voting Rights Act, faced similar legal challenges that all failed.

For a fully functional new system by 2014, Health and Human Services Secretary Kathleen Sebelius said, “It’s important that we put to rest once and for all the issue that maybe the law will disappear, maybe the law will be struck down.” [via Reuters, Los Angeles Times and CNBC]

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