U.S. Supreme Court Justice Ruth Bader Ginsburg passed away on September 18, 2020, at the age of 87. In 1993, she was nominated by President Clinton and confirmed by the Senate for her seat, having already established herself as a strong advocate, particularly for the rights of women. She has received many eloquent tributes over the last several days.
My purpose here is to look at how Justice Ginsburg ruled on questions impacting the insurance industry. I wrote a similar piece in 2016 after the passing of the late Justice Antonin Scalia. Insurance cases do not frequently come before the high court. I want to look at a handful of insurance cases where Justice Ginsburg wrote either the court’s opinion or a concurring or dissenting opinion.
One of the Court’s most significant insurance decisions in the last decade was National Federation of Independent Business v. Sebelius. This was the first case in which the court was asked to rule on the Affordable Care Act. The court ruled that the ACA’s requirement that individuals either carry health insurance or pay a tax penalty did not violate the U.S. Constitution. It also decided that the federal government could not force the states to expand Medicaid. Justice Ginsburg wrote an opinion concurring with the ruling on the tax penalty but dissenting from the Medicaid ruling:
Until today, this Court’s pragmatic approach to judging whether Congress validly exercised its commerce power was guided by two familiar principles. First, Congress has the power to regulate economic activities “that substantially affect interstate commerce.” …
Second, we owe a large measure of respect to Congress when it frames and enacts economic and social legislation. … When appraising such legislation, we ask only (1) whether Congress had a “rational basis” for concluding that the regulated activity substantially affects interstate commerce, and (2) whether there is a “reasonable connection between the regulatory means selected and the asserted ends.”…
Beyond dispute, Congress had a rational basis for concluding that the uninsured, as a class, substantially affect interstate commerce. Those without insurance consume billions of dollars of health-care products and services each year. … Those goods are produced, sold, and delivered largely by national and regional companies who routinely transact business across state lines. The uninsured also cross state lines to receive care. Some have medical emergencies while away from home. Others, when sick, go to a neighboring State that provides better care for those who have not prepaid for care.
The minimum coverage provision, furthermore, bears a “reasonable connection” to Congress’ goal of protecting the health-care market from the disruption caused by individuals who fail to obtain insurance. By requiring those who do not carry insurance to pay a toll, the minimum coverage provision gives individuals a strong incentive to insure. This incentive, Congress had good reason to believe, would reduce the number of uninsured and, correspondingly, mitigate the adverse impact the uninsured have on the national health-care market.
As earlier observed, because every person is at risk of needing care at any moment, all those who lack insurance, regardless of their current health status, adversely affect the price of health care and health insurance. … Moreover, an insurance-purchase requirement limited to those in need of immediate care simply could not work. Insurance companies would either charge these individuals prohibitively expensive premiums, or, if community-rating regulations were in place, close up shop. …
In the 1999 case of Humana v. Forsyth, the Court addressed whether application of the federal anti-racketeering law is compatible with state regulation of insurance. Justice Ginsburg wrote the opinion for the unanimous Court:
When federal law is applied in aid or enhancement of state regulation, and does not frustrate any declared state policy or disturb the State’s administrative regime, the McCarran-Ferguson Act does not bar the federal action.
Regulations implementing the Affordable Care Act required employers to provide coverage for contraception in their health insurance plans. In 2014, the Court ruled in Burwell v. Hobby Lobby Stores, Inc. that the requirement violated the employers’ rights under the federal Religious Freedom Restoration Act (RFRA.) Justice Ginsburg disagreed with that conclusion:
The (U.S. Constitution) First Amendment’s free exercise protections, the Court has indeed recognized, shelter churches and other nonprofit religion-based organizations. … The Court’s “special solicitude to the rights of religious organizations,” … however, is just that. No such solicitude is traditional for commercial organizations. …
Religious organizations exist to foster the interests of persons subscribing to the same religious faith. Not so of for-profit corporations. Workers who sustain the operations of those corporations commonly are not drawn from one religious community. …
… I would conclude that the connection between the families’ religious objections and the contraceptive coverage requirement is too attenuated to rank as substantial. The requirement carries no command that Hobby Lobby or Conestoga purchase or provide the contraceptives they find objectionable. Instead, it calls on the companies covered by the requirement to direct money into undifferentiated funds that finance a wide variety of benefits under comprehensive health plans. Those plans, in order to comply with the ACA … must offer contraceptive coverage without cost sharing, just as they must cover an array of other preventive services.
Importantly, the decisions whether to claim benefits under the plans are made not by Hobby Lobby or Conestoga, but by the covered employees and dependents, in consultation with their health care providers. Should an employee of Hobby Lobby or Conestoga share the religious beliefs of the Greens and Hahns, she is of course under no compulsion to use the contraceptives in question. But “[n]o individual decision by an employee and her physician — be it to use contraception, treat an infection, or have a hip replaced — is in any meaningful sense [her employer’s] decision or action.” … It is doubtful that Congress, when it specified that burdens must be “substantia[l],” had in mind a linkage thus interrupted by independent decisionmakers (the woman and her health counselor) standing between the challenged government action and the religious exercise claimed to be infringed. Any decision to use contraceptives made by a woman covered under Hobby Lobby’s or Conestoga’s plan will not be propelled by the Government, it will be the woman’s autonomous choice, informed by the physician she consults.
In 2003, the Court ruled that a $145 million punitive damages award against State Farm violated the company’s rights under the Constitution’s “Due Process” clause (14th Amendment: “No State shall … deprive any person of life, liberty, or property, without due process of law …”). Justice Ginsburg again dissented:
Not long ago, this Court was hesitant to impose a federal check on state-court judgments awarding punitive damages. …
It was not until 1996, in BMW of North America, Inc. v. Gore … that the Court, for the first time, invalidated a state-court punitive damages assessment as unreasonably large. … If our activity in this domain is now “well established,” … it takes place on ground not long held.
The large size of the award upheld by the Utah Supreme Court in this case indicates why damages-capping legislation may be altogether fitting and proper. Neither the amount of the award nor the trial record, however, justifies this Court’s substitution of its judgment for that of Utah’s competent decisionmakers. …
Lastly, the U.S. Bankruptcy Code gives higher priority to the claims of some unsecured creditors than others against a company filing for protection. Among the claims given priority are unpaid contributions to an employee benefit plan. An insurance company argued that unpaid Workers’ Compensation premiums fell into that category and should therefore be given priority. Writing for the Court, Justice Ginsburg disagreed:
Unlike pension provisions or group life, health, and disability insurance plans—negotiated or granted as pay supplements or substitutes—workers’ compensation prescriptions have a dominant employer-oriented thrust: They modify, or substitute for, the common-law tort liability to which employers were exposed for work-related accidents. …
Workers’ compensation regimes thus provide something for employees—they ensure limited fixed payments for on-the-job injuries—and something for employers—they remove the risk of large judgments and heavy costs generated by tort litigation. … No such tradeoff is involved in fringe benefit plans that augment each covered worker’s hourly pay. …
Every claim granted priority status reduces the funds available to general unsecured creditors and may diminish the recovery of other claimants qualifying for equal or lesser priorities. … Opening the (a)(5) priority to workers’ compensation carriers could shrink the amount available to cover unpaid contributions to plans paradigmatically qualifying as wage surrogates, prime among them, pension and health benefit plans.
A 27-year career on the nation’s highest court cannot be adequately summarized by a handful of decisions. However, these opinions do show a thought process based on logic, a reliance on prior court decisions, and a deference to state and federal lawmakers. Hers was a great legal mind. A new justice will take her seat, but she will not be replaced.