THE BLOG
08/17/2011 05:44 pm ET | Updated Oct 17, 2011

Silver Linings in the Health Care Ruling

For those of us who have followed in the footsteps of earlier generations and fought for progress for years, Friday's decision on the Affordable Care Act by the 11th Circuit Court of Appeals feels familiar. Most major pieces of social legislation have been challenged in the courts, often as an infringement of individual liberty. The Social Security Act in the 1930s and the Civil Rights Act of 1964 were struck down by lower courts as unconstitutional before being upheld by the Supreme Court. Today, those laws are part of the fabric of American society. I'm confident the Affordable Care Act will be as well. And while the court struck down part of the Affordable Care Act, buried in the more than 300 pages of opinions are some important positive developments.

The 11th Circuit struck down the individual responsibility provision by a 2-1 vote, finding it to be beyond Congress's authority under the Constitution's commerce clause. As a practical matter, this ruling has no immediate impact. In June, the Sixth Circuit Court of Appeals reached the opposite conclusion and upheld the individual responsibility provision. On the scoreboard, we're tied, 1-1. The Fourth Circuit is likely to issue a ruling in Virginia's challenge to the law in the next few weeks. Basically, this all just means that what we have assumed all along is true -- it will ultimately be up to the Supreme Court to resolve the issue. And most constitutional experts continue to believe that if the high court follows existing precedents, it will uphold the law.

But Friday's decision is just as important for what it did not do. The appeals court refused to strike down the entire Affordable Care Act, as the lower court had done. Instead, it explicitly found that even if the individual responsibility provision fails, the rest of the law is not affected. The important gains we've already achieved, like protection for children with pre-existing conditions, tougher regulation of insurance premiums, and filling the Medicare doughnut hole, remain in place. And the important work ahead, such as building state health care exchanges, planning for tax credits to make insurance affordable, and eliminating restrictions for everyone with pre-existing conditions, can continue uninterrupted.

On Medicaid, the news is doubly good. A central component of the coverage expansion in the Affordable Care Act is the extension of Medicaid coverage to all low-income Americans. Today, many low-income parents and most low-income adults without children cannot get Medicaid. Starting in 2014, all these people will be eligible for Medicaid coverage that could potentially save their lives. The 26 states that brought this case had challenged the Medicaid expansion as unconstitutionally "coercive" of the states -- even though between 90 to 100 percent of the costs of that expansion are paid for by the federal government. The court rejected this argument, noting that the states' objections seemed to be "more rhetoric than fact." Because this is the only case nationally in which the Medicaid claim is raised, there's a reasonable chance that the Supreme Court will not even review the issue, and the Medicaid coverage that will make such a profound difference in the lives of low-income people will roll out in 2014 as scheduled.

All this is not to minimize the potential harm of Friday's decision. The Affordable Care Act includes the individual responsibility provision so that people will not show up at the hospital without insurance and expect the rest of us to cover their bills through higher insurance premiums. The law makes coverage available and affordable through market reforms and subsidies, and in turn, it expects everyone to get coverage or pay a penalty. In a fundamental error, the court majority says it's just speculation that the uninsured might someday use health care they can't afford and as a result cause higher costs for those with insurance. But common sense and economic analyses tell us that it's not speculation, it's a fact. And if it were allowed to stand, the ruling could cause substantial increases in health care premiums.

Friday's ruling is undoubtedly a disappointment for all of us who care about ensuring access to high-quality, affordable health care for all Americans. But amidst the Monday morning quarterbacking, we should not despair either. This is just another round in a long process -- one in which we will ultimately prevail.

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