Part One of today's arguments before the Supreme Court concern the question of what happens if the individual mandate is struck down by the Court. Because the Affordable Care Act was constructed from many pieces and no severability clause was
March 28, 2012

Part One of today's arguments before the Supreme Court concern the question of what happens if the individual mandate is struck down by the Court. Because the Affordable Care Act was constructed from many pieces and no severability clause was included in the Act itself, the Court has been asked to determine whether striking the individual mandate kills the whole thing, only that part of it, or all of the patient protections contained in it.

Here's Justice Scalia's answer from page 73 of the transcript:

JUSTICE SCALIA: No, I -- that wouldn't be my approach. My approach would say if you take the heart out of the statute, the statute's gone. That enables Congress to -- to do what it wants in -- in the usual fashion. And it doesn't inject us into the process of saying: This is good, this is bad, this is good, this is bad. It seems to me it reduces our options the most and increases Congress's the most.

Throughout the arguments, this question was asked over and over again:

JUSTICE BREYER: But the -- the question here is, you've read all these cases or dozens. Have you ever found a severability case where the Court ever said: Well, the heart of the thing is gone and therefore we strike down these other provisions that have nothing to do with it which could stand on their feet independently and can be funded separately or don't require money at all.

The answer from all three lawyers is no, there is no other case.

Paul Clement, arguing for the NFIB (a Koch Industries-funded group, by the way), wants the mandate stricken, and argues that if it is stricken, the entire law should be stricken:

Now, in getting back to the -- an inquiry that I think this Court actually can approach, is to look at what Congress was trying to do, you need look no further than look than the title of this statute: Patient Protection and Affordable Care. I agree with Mr. Farr that community rating and guaranteed-issue were the crown jewels of this Act. They were what was trying to provide patient protection. And what made it affordable? The individual mandate. If you strike down guaranteed-issue, community rating and the individual mandate, there is nothing left to the heart of the Act.

H. Bartow Farr was appointed by the Court to submit an amicus curiae brief to argue that the mandate could be stricken and the balance of the Act kept without additional action by the Court. The most attractive argument he made (and I don't think it was all that attractive), was this:

Congress included at least half a dozen other provisions to deal with adverse selection caused by bringing in people who are less healthy into the Act.

There are -- to begin with, the Act authorizes annual enrollment periods, so people can't just show up at the hospital. If they don't show up and sign up at the right time, they at least have to wait until the time next year. That's authorized by the Act.

There -- with respect to the subsidies, there are three different things that make this important. First of all, the subsidies are very generous. For people below 200 percent of the federal poverty line, the subsidy will cover 80 percent, on average, of the premium which makes it attractive to them to join.

The structure of the subsidies, because their income -- they create a floor for -- based on the income of the person getting the insurance, and then the government covers everything over that. And this is important in adverse selection because if you do have a change in the mix of people, and average premiums start to rise, the government picks up the increase in the premium. The amount that the person who is getting insured contributes remains constant at a percentage of his or her income.


So you have all of that, and then you have Congress also, unlike the States, establishing -- or I should be precisely accurate -unlike almost all the States, establishing an age differential of up to three to one. So an insurance company, for example, that is selling a 25 -year-old a policy for $4,000 can charge a 60-year-old $12,000 for exactly the same coverage.

That break in the action was when Justice Scalia somewhat dryly remarked that the government resources were, of course, infinite.

The argument that made the least sense to me came from Edwin Kneedler from the Department of Justice, who was representing the Department of Health and Human Services. He first tried to argue forcefully that there was no standing by NFIB or anyone else to be arguing this point, since those who are harmed by striking the mandate are the millions of uninsured people who will be forced to pay more due to adverse selection.

When he was forced to abandon that line of reasoning by Justice Sotomayor, he argued that the court should review each piece of the Act to see if it related back to the mandate, prompting this snort from Justice Scalia:

JUSTICE SCALIA: Mr. Kneedler, what happened to the Eighth Amendment? You really want us to go through these 2,700 pages?


JUSTICE SCALIA: And do you really expect the Court to do that? Or do you expect us to give this function to our law clerks? (Laughter.)

JUSTICE SCALIA: Is this not totally unrealistic? That we're going to go through this enormous bill item by item and decide each one?

That exchange prompted this retort from Justice Kagan:

JUSTICE KAGAN: I mean, we have never suggested that we're going to say, look, this legislation was a brokered compromise, and we're going to try to figure out exactly what would have happened in the complex parliamentary shenanigans that go on across the street and figure out whether they would have made a difference. Instead, we look at the text that's actually given us. For some people, we look only at the text. It should be easy for Justice Scalia's clerks.

There isn't an easy answer to this question, this idea that you can look at an engine with many different parts to it, disable the fuel pump, and expect it to keep running. The way the ACA is structured, it relies on the individual mandate to fuel the removal of coverage limits, guaranteed coverage and community ratings. Those make up the engine of the Act, and the consequences of one create a ripple effect that passes through the entire law, effectively gutting it.

I hope these justices are listening to these arguments and hearing that, loud and clear. I can say for sure Scalia isn't, but hopefully Kennedy and Roberts are, or at least one of them. Even though everything was hypothetical today, it still felt like the court is leaning toward killing the mandate which would, in my eyes, mean killing the entire law.

Part Two of today's arguments is still underway, but concerns the most underreported but valuable parts of the Act: The Medicaid expansion and unfunded mandates. Conservatives are hoping to use the Medicaid expansion to challenge federal unfunded mandates overall. I will have that audio in a later post.

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