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US Supreme Court to Hear PPACA Healthcare Reform Challenge

Posted in Healthcare Services Investing

The Supreme Court announced earlier this week that it would rule on challenges to the Patient Protection and Affordable Care Act (PPACA), President Obama’s healthcare reform law. After four Federal Courts of Appeal had reached conflicting conclusions on the constitutionality of all or parts of the law, many experts had expected the Court to hear the case this fall.  Others had believed the Court would hold off on hearing the case until after the 2012 election, due to concerns fboth of influencing the election and of “ripeness” of the case.

At the heart of the legal battle is the "individual mandate", which requires all Americans to buy health insurance by 2014 or pay a penalty.  The Court could uphold all of PPACA,  strike down just the individual insurance mandate or other provisions,  invalidate the entire law or even put off a ruling on the mandate until it is fully ripe (ie after the individual mandate has taken effect in 2014).

A group of 26 states had joined to argue that Congress exceeded its powers and that all of the law should be struck down. The states also challenged the expansion of Medicaid on the grounds Congress unconstitutionally forced the expansion on the states by threatening to withhold funds. The Obama administration has argued that Congress could adopt the insurance purchase requirement under its powers in the Constitution to regulate interstate commerce.

Oral arguments should take place in March, and the ruling is expected by June 2012.  We will continue to track progress of the case and discuss its impact on various healthcare sectors.