US Supreme Court's Decision On Obamacare Could Impact Shared Spending In Canada

On June 28, 2012, the Supreme Court of the United States upheld the Constitutionality of the Patient Protection and Affordable Care Act, being health care legislation commonly referred to as "Obamacare". Although the decision is being widely reported as a victory for the Obama administration, one has to read the fine print in order to appreciate the decision's full effect. This fine print may also lay the groundwork for future Constitutional litigation north of the border.

In National Federation of Independent Business v. Sebelius, the Court held, by a 5-4 split that the "linchpin" of Obamacare, being the "individual madate" requiring individuals to purchase "minimum essential" private health care, is Constitutionally valid. Surprisingly, the "linchpin" member of the Court was Chief Justice Roberts, who broke ranks with his conservative colleagues Scalia, Alito, and Thomas JJ. to join with the Court's liberal wing of Ginsburg, Breyer, Sotomayor, and Kagan JJ., thereby tipping the scales in favour of the legislation. (The one unpredictable member of the Court, Justice Kennedy, joined the dissenters.) Presumably as a result of the Republican-appointed Chief Justice's wish not to appear to be too agreeable with a Democratic administration, the majority's basis for upholding this aspect of the regime was not the federal Commerce power (being a head of power which, unlike Canada's equivalent, has been interpreted in an almost limitless manner), but rather Congress' power to levy a tax.

While today's media coverage of the Sebelius decision has focused upon the validity of Obamacare's "individual madate" requirement, buried within the decision is an interesting tidbit of Constitutional jurisprudence which could have ramifications in Canada.

The aspect of Obamacare of less notoriety than the individual mandate is the enforcement mechanism adopted by Congress in order to ensure that the states buy-in to the program. Section 1396d(y)(1) of the Act increases federal funding to cover the States' costs in expanding Medicaid coverage, but by operation of §1396c, if a State does not comply with the Act's new coverage require¬ments, it may lose not only the federal funding for those require¬ments, but all of its federal Medicaid funds. In other words, Congress coerced the states to cooperate by threatening to cut-off their federal funding.

If a shared-costs healthcare program of this nature sounds familiar, it should. In Canada, under the Canada Health...

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