AAMC Contacts:

Lori K. Mihalich-Levin, J.D.Director, AAMC Health Care AffairsTelephone: 202-828-0599E-mail: lmlevin@aamc.org

Scott WetzelProgram Specialist, Health Care AffairsTelephone: 202-828-0495E-mail: Swetzel@aamc.org

The Supreme Court’s Decision on the Affordable Care ActJuly 6, 2012

• Chief Justice John Roberts wrote the 5-4 majority decision (joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan) upholding the ACA, with changes to the Medicaid expansion. The Court’s opinion can be found here: http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf

• Justices Scalia, Kennedy, Thomas, and Alito wrote a joint dissenting opinion arguing that the entire ACA was unconstitutional

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The Court’s Decision

The individual mandate is Constitutional:• Permissible use of Congress’s taxing power• Not permissible under the Commerce Clause

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Key Ruling: Individual Mandate

States will not lose current Medicaid funding should they chose not to expand their Medicaid programs

• ACA said that if states did not expand coverage to individuals under the age of 65 with incomes below 133% of the federal poverty level, they would lose all Federal funding for their Medicaid programs

• The Federal Government initially pays full cost of expansion; offers substantial subsidies for states to expand coverage to Medicaid eligible individuals

• It is unclear at this time which states will choose to expand their Medicaid programs

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Key Ruling: Medicaid Expansion

• Under the Anti-Injunction Act, the Supreme Court is prohibited from considering the implementation of a Federal tax before the tax is enforced. Under the ACA, the tax penalties for not purchasing individual health insurance will go into effect in 2014

• The Court ruled that since Congress did not use the word “tax” in the statute, the Anti-Injunction Act does not apply

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Anti-Injunction Act

• With the exception of the Medicaid expansion, all other provisions of the ACA remain in place

• This includes: VBP, PCORI, CMMI, demonstrations, resident slot redistribution, DSH cuts, changes to physician and hospital quality reporting, etc

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Important Takeaways from the ACA Ruling

• Congressional Republicans have pledged to repeal all or parts of the ACA. Repeal is unlikely as long as Democrats control the Senate and the White House

• Some states may choose not to expand their Medicaid programs

• The AAMC is working with its member institutions to better understand the implications of the Court’s ruling on Medicaid and how it relates to other ACA provisions

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Next Steps