James Hodge: The Changing Face of American Health Care Reforms

James G. Hodge, Jr.

James G. Hodge, Jr., J.D., LL.M.
Lincoln Professor of Health Law and Ethics
Director, Public Health Law and Policy Program

On June 7-9, 2012, the Sandra Day O’Connor College of Law hosted for the first time the American Society of Law, Medicine, and Ethics’ (ASLME) Health Law Professors Conference. The 35th annual installment of this national event  brought together health law academics, practitioners, and others from across the country and abroad to discuss critical topics at the intersection of law, health, science, ethics and policy.[1] 

Not surprisingly, developments surrounding the Patient Protection and Affordable Care Act (ACA), or “Obamacare” as some refer to it, were center stage during a plenary and multiple concurrent sessions. Conference participants, however, could only speculate  at the time as to potential next steps in the ongoing saga of national health care reforms in anticipation of the U.S. Supreme Court’s impending decision in National Federation of Independent Business v. Sebelius.[2] 

With the release of the Court’s decision on June 28, 2012, came answers to specific constitutional questions on the fate of national reforms.  In a majority opinion led by Chief Justice John Roberts, the Court rejected Congress’ attempt to use its Interstate Commerce Powers to support ACA’s individual mandate provisions (requiring many Americans to obtain health insurance by 2014 or face monetary penalties). Yet the Court then found sufficient authority within Congress’ tax powers to uphold the individual mandate despite neither party to the case affirmatively arguing this position.[3] 

In addition, the Court rejected Congress’ use of its spending powers to require all states to participate in forthcoming expanded Medicaid enrollment or face the loss of existing and future Medicaid funds. This move by the Court was foretold in the Court’s 1987 decision in South Dakota v. Dole.[4] Justice Wiilliam Rehnquist warned in Dole that some “coercive” exercises of federal conditional spending may exceed Congress’ authority. Still, Justice Robert’s admonition on the limits of federal conditional spending under the ACA came as a shock to many.

What the nation sought in the Supreme Court’s blockbuster opinion is some certainty as to the future of health care restructuring in the United States following months of legislative and judicial wrangling. What it got, however, was continued and marked instability for several primary reasons. 

First, while the decision theoretically leaves intact the individual mandate, this core structural element of the Act is jeopardized. Lacking the commerce authority to implement the mandate, Congress must rely on existing language in the ACA for enforcement through fairly minimal tax penalties. As one scholar notes, “individuals have a realistic choice about whether to purchase insurance” or not.[5] If Americans en masse forego health insurance despite penalties, ACA’s promise to address the “free rider” problem may go unmet.

Second, federalism-based limitations on federal spending authority undermine Congress’ attempt to incrementally expand Medicaid enrollment nationally. States are effectively given the reins over whether to accept increased numbers of Medicaid enrollees by 2014 (with two years of 100% coverage via federal funds initially), or reject them outright without loss of their existing Medicaid funds.

Many states, including Arizona,[6] are mulling over the possibility of rejecting millions of Medicaid beneficiaries for political, fiscal and other reasons. Absent consistent expansion of Medicaid coverage across states, ACA’s goal of improved access for the nation’s least wealthy will go unmet. Denying these individuals access to basic health insurance and health care services may deleteriously impact the public’s health, perpetuate socially unjust tiers of health care across states, and potentially have wider economic impacts stemming from migrations of persons to states providing Medicaid coverage.

Finally, nothing in the Supreme Court’s decision nor the ACA itself adequately  addresses the issue of expanding health care costs in the United States. Existing proposals in the Act to encourage more responsible allocations of health care resources, limit increases in health insurance premiums, curb federal program payouts to providers, and encourage preventive services to obviate future, catastrophic health care expenditures are meaningful. However, each relies on national buy-in of efforts to increase the pool of healthy insureds. 

Against a backdrop of diminished impact of the individual mandate and some states’ reluctance to adopt expanded Medicaid enrollees, escalating costs have the potential to collapse existing health care providers, insurers and large and small businesses attempting to provide insurance for their employees. Long-term economic sustainability of the nation’s health care system remains an unsolved challenge. Hanging in the balance is the collective and individual health of millions.

To be sure, national health care reforms following the Supreme Court’s opinion are moving on. The storyline, however, is incomplete. Even as increasing numbers of Americans share support for the ACA,[7] upcoming political elections present opportunities for future leaders to advance or reject the Act’s current and future implementation. Moreover, the Supreme Court’s guidance on the foundational issues of Congress’ commerce and taxing authorities presents vexing debates on the viability of additional measures, such as environmental policies, at the heart of the federal-state balance.

Special thanks to Andrew Sniegowski, R.N., J.D. Candidate (2014), Legal Researcher, ASU’s Public Health Law and Policy Program, for his insightful research, editing and suggestions.    


[1] For more information, see ASLME’s website (available at  http://newsmanager.commpartners.com/aslme/issues/2012-06-14/4.html).

[2] 132 S. Ct. 2566 (2012).

[3] The Roberts Rules, Wall St. J., Jun. 29, 2012, at A12, available at, http://online.wsj.com/article/SB10001424052702304058404577494400059173634.html?mod=hp_opinion.

[4] 483 U.S. 203 (1987) (upholding conditional spending related to the distribution of federal highway funds based on states setting the minimum drinking age at 21 years old).

[5] Lawrence O. Gostin, The Supreme Court’s Historic Ruling on the Affordable Care Act, 308 JAMA 571 (Aug. 8, 2012).

[6] Associated Press, Brewer Decision on Medicaid Expected in January, AZCentral.com (Aug. 2, 2012, 5:00 PM), http://www.azcentral.com/news/politics/articles/2012/08/02/20120802brewer-decision-medicaid-expected-january.html.

[7] Health Care Law, Opposition to Repeal of Health Care Law Hits New High: 44%, Rasmussen Reports (Aug. 6, 2012), http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law.

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