On June 1, an ideologically divided panel of the United States Court of Appeals for the Sixth Circuit is scheduled to hear oral arguments in a lawsuit challenging the Affordable Care Act. Last Thursday, however, the court sent an unusual letter asking the parties to brief three procedural questions that might lead the court to dismiss the case without reaching the merits of whether the ACA is constitutional:

1. Standing/Ripeness.

a. Have the plaintiffs alleged an injury in fact? If not, have they alleged an “imminent injury” creating a case of actual controversy under Article III and the Declaratory Judgment Act, even though they filed their complaint more than three years before the effective date of the challenged provisions?

b. If the plaintiffs do not purchase minimum essential coverage and do not pay the penalty, what available enforcement mechanisms are available to the IRS? What role, if any, do IRS enforcement mechanisms play in the injury and hardship requirements?

2. Facial/As-applied.

Is the Commerce Clause challenge a facial challenge and, if so, must the plaintiffs prove “that no set of circumstances exists under which the Act would be valid.” United States v. Salerno, 481 U.S. 739, 745 (1987)?

The first two questions essentially concern whether this lawsuit was brought prematurely. The Constitution prevents plaintiffs from challenging a law unless their have experienced an “injury in fact” — that is, unless the law has actually harmed them in some meaningful way. But the ACA litigation challenges a provision that requires some people to pay slightly more taxes beginning in 2014. Because 2014 hasn’t happened yet, the court may be poised to dismiss the lawsuit because the plaintiffs cannot show that they have been injured by it now or that it will affect them when it takes effect in two and a half years.

The third question concerns whether the plaintiffs in this case challenged the ACA in the proper way. Generally speaking, the Supreme Court allows two kinds of challenges to a law: “facial” challenges, that claim that the law must be effectively striken from the books, and “as applied” challenges, which claim that the law cannot be applied to a particular person or entity. The Sixth Circuit may be poised to say that the ACA survives a facial challenge, but that it could possibility be challenged by certain plaintiffs on an as applied basis.

This kind of letter instructing the parties to brief additional questions is not unheard of, but it is somewhat unusual. It indicates that the court is troubled by these three procedural questions — or even, potentially, that the court is looking for a way to make the case go away. In either event, it opens up the strong possibility that the Sixth Circuit will dismiss this case without reaching the merits of whether the ACA is constitutional.

During a speech at the Economic Club of Chicago today, Rep. Paul Ryan’s (R-WI) sharpened his attacks against the Independent Payment Advisory Board (IPAB), a 15-member commission that would make recommendations for lowering Medicare spending to Congress if costs increase beyond a certain point. The reductions would go into effect unless Congress acts to stop them.

Ryan’s attacks come less than a week after 42 freshmen Republican members of Congress sent a letter urging President Obama to abandon so-called “Mediscare” tactics against Ryan’s plan. From the speech:

In a recent speech he gave in response to our budget, President Obama outlined a deficit-reduction approach that, in my view, defines shared scarcity. The President’s plan begins with trillions of dollars in higher taxes, and it relies on a plan to control costs in Medicare that would give a board of 15 unelected bureaucrats in Washington the power to deeply ration care. This would disrupt the lives of those currently in retirement and lead to waiting lists for today’s seniors.

The attacks are inaccurate because the IPAB’s members are actually confirmed by the Senate and their plan to reduce spending cannot “include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums…increase Medicare beneficiary cost- sharing (including deductibles, coinsurance, and co- payments), or otherwise restrict benefits or modify eligibility criteria” (Section 3403 (page 409) of the Affordable Care Act stipulates.)

Ryan is also no stranger to cost control by commission. As the Incidental Economist’s Don Taylor has pointed out, Ryan has previously offered legislation that included a very similar board to control health care spending. In 2009, Ryan introduced the Patients’ Choice Act (PCA) which “proposed changing the tax treatment of private health insurance and providing everyone with a refundable tax credit with which to purchase insurance in exchanges” but also sought to establish “two governmental bodies to broadly apply cost effectiveness research in order to develop guidelines to govern the practice of, and payment for, medical care.” Taylor writes that “the bodies proposed in the PCA had more teeth, including provisions to allow for penalties for physicians who did not follow the guidelines” than the ACA.

Again, progressives would argue that this approach makes some degree of sense since it’s far preferable to have representatives of the various stakeholders in health care — drug companies, hospitals, doctors, patients — (all of whom are nominated by the president and confirmed by the Senate) making these decisions in a transparent, public, and accountable manner and then submitting their plan to Congress for a vote, than resting the cost-cutting powers in the hands of politicians and lobbyists who will undoubtedly reach their decisions without any kind of public input.

Former Speaker of the House Newt Gingrich (R-GA) is backing away from his support of the individual mandate and has posted a YouTube message to supporters clarifying his opposition to the mandate provision included in the Affordable Care Act. In an interview with the Wall Street Journal, Gingrich also explained that states could adopt a version of the policy which “could be designed in a way that would be acceptable to libertarians—for instance, people could agree to post a bond that would pay for unexpected health care costs if they don’t want insurance“:

“I think we have to find a way to hold people accountable for paying for their health care,” he said. He told the Journal that the rules should apply to all Americans, but suggested they could be designed by the states.

Romney and the Heritage Foundation advocated a very similar version of the “personal responsibility” requirement. As health policy expert Emma Sandoe has pointed out, under their initial proposal, if a person failed to purchase insurance they would be required to spend $10,000 in the form of a bond that could be used to pay for hospital care down the road. To Romney, this idea ensured funds were directed back into health care rather to the government revenue.

But charging a flat fee regardless of income means different things to different economic demographics and would significantly disadvantage middle class families — who would have to set a side a huge amount of money for a rainy day. The bond wouldn’t provide adequate coverage for a catastrophic health care event — a heart attack could cost up to $1.5 million — and would bankrupt middle class families. It would also do little to increase access to prevention and other services that could deter expensive chronic conditions.

The mandate penalty in the Affordable Care Act takes some of these affordability concerns into account and requires those without coverage to pay a tax penalty of the greater of $695 per year or 2.5% of household income.

Lynne Hendricks of The Daily News of Newburyport is reporting that Sen. Scott Brown (R-MA) has pledged to vote for the GOP budget put forward by Rep. Paul Ryan (R-WI) when the measure comes to the Senate floor. “The leaders will bring forward (Budget Committee Chairman Paul Ryan’s) budget, and I will vote for it, and it will fail,” he said, predicting that “It will be great fodder for the commercials.”

The “fodder” will be well justified since Brown ran for office on his opposition to the Medicare reductions included in what eventually became the Affordable Care Act. Ryan’s budget preserves many of these cuts and goes much further, eliminating the traditional Medicare coverage option for future retirees. During the campaign, however, Brown insisted that reductions in Medicare would create “longer lines” and less coverage:

- “You look at health care, and they are going to cut a half-a-trillion from Medicare. They`re looking in Massachusetts. We already have insurance. We have 98 percent of our people insured, so why we would we in fact cut medical — you know, Medicare half-a-trillion, have longer lines, lesser coverage, subsidize other states?” [Fox News, 1/13/2010]

- “Well, I traveled throughout the state while they were in the middle of their primary. I went door to door, I went out to the Berkshires and central Massachusetts and made sure we could really get every single vote. And people enjoyed the message, because when you’re talking about a health care plan that’s not good for our state vs. a one-size-fits-all plan with you’re going to cut half a trillion from Medicare, affect Tricare and raise taxes, people are hurting right now and they thought we could do better.” [NBC, 1/20/2010]

- “I think it`s important for everyone to get some of health care. So, to offer a basic plan for everybody, I think, is important. It`s just a question of whether we`re going to raise taxes, we`re going to cut a half-a-trillion from Medicare, we`re going to affect veterans` care. I think we can do it better.” [PBS, 1/20/2010]

Ryan’s plan would eliminate $750 billion in federal Medicare spending and give seniors “premium support” vouchers to purchase coverage from private insurers beginning in 2022.

During an appearance on Meet the Press yesterday, 2012 presidential candidate and former House Speaker Newt Gingrich (R-GA) called Rep. Paul Ryan’s (R-WI) proposal to transform Medicare into a “premium support” system for future retirees “too big a jump” and suggested that the reform was tantamount to “right-wing social engineering.”

The comments come just weeks after Gingrich praised Ryan for being a “brave” “man of ideas.” Asked by Time’s Jay Newton-Small if he would have voted for the GOP budget, Gingrich responded, “Sure.” “I think it’s the first step,” he added. “You need an entirely new set of solutions.”

Under the Ryan proposal — which almost every Republican in the House supported — seniors retiring in 2022 would have to purchase coverage from an exchange of private plans with a “premium support” of approximately $8,000 and would no longer be able to enroll in traditional fee-for-service Medicare. In fact, Gingrich proposed a very similar plan in 1995, when Republicans sought to eliminate $270 billion dollars from Medicare over seven years. Seniors would have received a voucher for the value of the annual average benefits and bought insurance from a private insurance company — or traditional Medicare. The Hartford Courant described the proposal as “the most sweeping change in Medicare’s 30-year history,” saying that it would “end Medicare’s guarantee of providing a defined set of benefits.” “Instead, the government would guarantee a certain dollar amount and beneficiaries would be on their own to find the best bargain available,” the paper explained in July 1995. Gingrich himself described the reform as a “voucher“:

House Speaker Newt Gingrich (R-Ga.) promised Friday that congressional Republicans would devote all future savings from Medicare to assure the solvency of the imperiled health care program rather than to balance the federal budget.

And he challenged President Clinton to offer proposals “to save Medicare for a generation.”

Gingrich predicted that Congress would undertake a major reform of Medicare, offering other options to the current fee-for-service system. One alternative would be a voucher program, in which beneficiaries would choose among several competing private health plans. However, he pledged that “anyone who wants to” would be permitted to stay in the present system, which allows unrestricted choice of doctors and hospitals.

Such proposals have been disavowed by Henry Aaron, the academic who first coined and developed the term “premium support” — the concept upon which both the Gingrich and Ryan proposals are based. Aaron argues that the “gains from being able to choose among competing insurance plans have been exaggerated” and that the Affordable Care Act may push Medicare to use its leverage to effect change in the way health care is delivered.