For Immediate Release - February 09, 2012

AG Coakley: National Health Care Law’s Constitutionality “Not a Close Call”

At National Press Club, AG Coakley Highlights the Benefits of Massachusetts Health Care Reform and Value of Reducing Number of Uninsured on National Level; Says Issues Around Health Care Reform Are Policy Discussions, Not Constitutional Questions

WASHINGTON D.C. – Calling the constitutionality of the national health care law “not a close call” and arguing that Massachusetts’ own experience firmly supports Congress’ constitutional basis for passing it, Attorney General Martha Coakley today defended the constitutionality of the Patient Protection and Affordable Care Act (ACA) in remarks before the National Press Club in Washington D.C.

AG Coakley provided a counter view to Attorney General Ken Cuccinelli of Virginia, arguing that the successful results from the Massachusetts law enacted in 2006, including expanding access and a reduction of the number of uninsured people utilizing the “free-care” pool (so-called “free-riders”), demonstrate that Congress had a rational and constitutional basis to enact an individual coverage requirement in the Affordable Care Act, the federal health care reform legislation approved by Congress in 2010.

“The principal legal issue in this case is whether Congress had a rational basis to enact the ACA and the individual Mandate,” AG Coakley said. “Massachusetts’ own experience provides strong support for Congress’ choice to implement health reform on a national basis. There are very real and important policy discussions to be had over health reform. But they are just that – policy discussions. They are not questions of constitutionality.”

During her remarks, AG Coakley argued that the Individual Mandate provision of Massachusetts health care reform – that all who can afford it purchase health insurance – is a vital component of the ACA and constitutional under the Commerce Clause and the Necessary and Proper Clause of the U.S. Constitution. AG Coakley noted that by requiring individuals to be insured, and thereby preventing healthy people from foregoing health insurance until they are sick or injured (“free-riding”), a comprehensive reform program can spread risk, control costs, and reduce the financial burdens otherwise borne by health plans and free-care pools. AG Coakley explained that Congress had a rational basis for concluding that free-riding by individuals has a substantial effect on interstate commerce.

AG Coakley also argued that the Necessary and Proper Clause of U.S. Constitution plainly supports the individual mandate. The mandate is a rational requirement for implementing the other components of the ACA, which includes banning pre-existing condition exclusions and banning discrimination in health insurance based on health status.

The tangible benefits of health care reform in Massachusetts cited in the Attorney General’s argument today include:

  • An increase in the number of insured residents to more than 98% of

the state’s population in 2010, up from 87.5% in 2006, giving Massachusetts the lowest rate of uninsured residents in the country;

  • The gains in Massachusetts residents with health insurance spurred a

sharp decline in the amount of state spending on “free care” for the uninsured and underinsured. The costs of “free care” spending dropped by approximately $300 million, or 33% since 2006;

  • Insurance premiums have fallen drastically for individuals in the non-group market in Massachusetts. From 2006 to 2009 individual premiums grew 14% nationally, while in Massachusetts those premiums dropped by 40%; and
  • Significantly fewer adults report unmet health care needs due to cost, and there has been a great reduction in emergency room care.

AG Coakley explained that even with Massachusetts’ success in improving access to quality health care and reducing spending on “free care,” there is still a need for national health care reform, such as that embodied in the ACA, to grapple with national health care trends that individual states – acting alone – have little power to influence.

Under ACA, those who can afford it are required to maintain a minimum level of health insurance or pay a tax penalty for failing to do so.  In United States Department of Health and Human Services, et al. v. State of Florida, et al., the Eleventh Circuit Court of Appeals held that Congress did not have the power under the Constitution to implement this minimum essential coverage provision. The court concluded that the failure to buy health insurance is not economic activity subject to Congressional regulation.  Two other Circuit Courts, for the Sixth Circuit and the District of Columbia, upheld the individual mandate.  The Supreme Court agreed to hear the case, and has scheduled oral arguments for the end of March.  AG Coakley’s Office submitted an amicus brief last month defending the constitutionality of the ACA.