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Court could decide any number of ways on health-care law challenge

Mar 21, 2012 - By Mark Sherman and Ricardo Alsonso-Zaldivar

Part 2 of 2

WASHINGTON (AP) -- The U.S. Supreme Court is expected to hear arguments this week or next on President Barack Obama's health care overhaul. The court also could avoid deciding the law's constitutionality at all, if it finds the lawsuits challenging the law are premature.

Some questions and answers about possible outcomes.

Q. What if the court strikes down the individual mandate, and invalidates the parts of the law that require insurance companies to cover people regardless of medical problems and limit what they can charge older people?

A. Many fewer people would get covered, but the health insurance industry would avoid a dire financial hit.

Insurers would be able to keep screening out people with a history of medical problems, such as diabetes patients or cancer survivors.

That would prevent a sudden jump in premiums. But it would leave consumers with no assurance that they can get health insurance when they need it, a major problem the law was intended to fix. Other economically developed countries guarantee health insurance for their citizens.

A related requirement limits premiums charged to older adults. Currently people in their late 50s and early 60s can face premiums as much as six or seven times higher than those charged to 20-year-olds. The law says insurers may charge older adults no more than three times what they charge younger ones.

Q. What happens if the court throws out only the expansion of the Medicaid program?

A. Throwing out the expansion would severely limit the law's impact because roughly half the more than 30 million people expected to gain health insurance under the law would get it through the expansion of Medicaid, the federal-state health insurance program for low-income people.

The law would effectively bring under Medicaid everyone making up to 138 percent of the federal poverty level. That works out to about $15,400 for an individual, $30,650 for a family of four. Most of those who would be added to the Medicaid rolls are low-income adults without children.

But a potentially sizable number of those low-income people might still be eligible for government-subsidized -- though probably more expensive -- private insurance under other provisions of the law. Private coverage will probably be more expensive for taxpayers to subsidize than Medicaid.

States suing to overturn the federal law argue that the Medicaid expansion comes with so many strings attached it amounts to an unconstitutional power grab by Washington, reaching directly into the wallets of state taxpayers.

The administration counters that the federal government is paying all of the initial cost of the expansion, and 90 percent in perpetuity, well above what Washington contributes for regular Medicaid. Moreover, when Congress created Medicaid in 1965 it also served notice on the states that program rules could change in the future. .

Q. What happens if the court decides that the constitutional challenge is premature?

A. The wild card, and least conclusive outcome in the case, involves the court's consideration of a technical issue. The federal appeals court in Richmond, Va., held that the challenge to the insurance requirement has to wait until people start paying the penalty for not purchasing insurance.

The appeals court said it was bound by the federal Anti-Injunction Act, which is intended to facilitate tax collections and keep the government operating. That law says federal courts may not hear challenges to taxes, or anything that looks like a tax, until after they are paid.

Both the challengers and the administration have urged the justices to decide the constitutional issues now. But if the court were to take this path, most of the six hours of argument time, thousands of pages of legal briefs and ample legal fees devoted to this case would be wasted.

Although the administration says it doesn't want this result, such a decision would allow it to continue putting the law in place and force postponement of any subsequent challenge until more of the benefits are being received.

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