Conservative justices of the Supreme Court seemed sharply critical on Tuesday morning while questioning attorneys about the requirement that all Americans purchase health insurance. The four conservatives expressed reservations that the mandate could significantly alter the powers of the federal government.
So did Justice Anthony Kennedy, often the court's swing vote. Kennedy said Tuesday that the law "changes the relationship of the federal government to the individual in a very fundamental way," and he pressed hard on the Obama administration's lawyer, Solicitor General Donald Verilli, on why the required purchase wouldn't leave Congress with nearly limitless authority.
The court's conservatives questioned Verilli repeatedly about whether Congress could also force Americans to buy broccoli, burial insurance, or cellular phones as part of commercial regulations if given the power that would result if the law stands. Verilli said lawmakers couldn't do that, but the justices seemed unconvinced. "Once you're into interstate commerce and can regulate it, pretty much all bets are off," Chief Justice John Roberts said.
Two of the liberal justices, Ruth Bader Ginsburg and Stephen Breyer, showed support for the mandate. Ginsburg argued that forcing people to buy food is different than requiring them to purchase insurance, citing a friend-of-the-court briefing that uncompensated care leads to higher costs for all consumers. Ginsburg suggested that uninsured people are passing their costs on to others, and that’s why Congress can regulate them. These two justices along with liberal Justices Elena Kagan and Sonia Sotomayor are expected to vote to uphold the law.
Justices Clarence Thomas, Samuel A. Alito, Jr. and Chief Justice John Roberts are expected vote against the mandate. Baring a surprise vote from one of these three justices, the final decision will be determined by the vote of Justice Anthony Kennedy and or Justice Antonin Scalia.
In a medical marijuana case in 2005, Gonzales v. Raich, the court ruled that federal anti-drug laws could be applied to prohibit the local cultivation of marijuana for medical purposes, which had been authorized under state law.
Supporters of the health care act hope that Justice Scalia will vote to uphold the individual mandate, given his concurrence in Raich. In his opinion Scalia wrote, "Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce."
Those who oppose the mandated point to two other cases, U.S. v. Lopez (1995) and U.S. v. Morrison (2000), where Justice Scalia joined in an opinion that said that Congress had exceeded its authority under the Commerce Clause.
Although considered a conservative Justice, Kennedy has sometimes "swung" to the liberal side. Although his questions this morning seemed critical of the mandate, supporters of the law hold hope that he will vote liberal pointing to the fact that in two lower court decisions, district judges who are highly respected in conservative circles voted to uphold the individual mandate.
If the court strikes down the individual mandate, the justices will have to decide how much more of the law to take down with it. The court has set 90 minutes of argument Wednesday on the issue of severability.
The administration has argued that most of the law should stand even if the mandate falls but that two closely related provisions would have to go: one forcing insurers to cover people with pre-existing conditions and another banning health plans from charging higher premiums to people with health problems.
Opponents of the law say the court should throw out the entire Affordable Care Act if the mandate is struck down. One federal judge in Florida took that approach, but none of the other lower courts that have heard the issue agreed.
Though neither side requested it, the justices invited D.C. lawyer Bartow Farr to argue that the mandate alone could be struck down — which could leave Congress figuring out how to repair the bill.
Do you run into resistance from clients regarding estate planning? Do they want to hold off on estate planning strategies because of the ever-changing estate tax environment? You can address the concerns using the Wait and See Two Policy approach which accomplishes three basic objectives.
First, it satisfies a first-death need. Should either spouse die, the surviving spouse would receive a death benefit used for income replacement objectives. The death benefit could be used for childcare, mortgage payments or education expenses, to name a few.
Second, this approach could also be used as an effective accumulation strategy. A portion of the death benefit owned by either spouse could be satisfied with an accumulation focused universal life insurance policy. The balance of the death benefit need would be taken care of in the form of term insurance. The policy could be designed to minimize insurance and mortality costs.
Third, this trifecta approach offers future estate tax planning options as well. Clients may currently be hesitant about estate tax planning strategies because of the ever-changing estate tax environment. The Wait and See allows the client to retain control of the asset (the life insurance) until well into the future. If the clients decide that they need death benefit outside of their estate at retirement, they can convert the term insurance to permanent coverage and move it into an irrevocable life insurance trust.
For even more coverage, you may suggest the long term care rider, available for an additional cost and subject to restrictions, to prepare for the possibility of incapacity. It would add valuable long term care benefits should either spouse become incapacitated. The benefits of the rider are available while the policies are owned personally, not in an irrevocable trust.
Contact Steve Gresso for more information and to obtain quotes.
