March 28 2012

Day Three at SCOTUS: Is the Mandate Severable?

Hadley Heath

This is cross-posted at HealthCareLawsuits.org.

There were three positions advanced today during the Supreme Court’s hearing on the severability of ObamaCare’s individual mandate.  First, Paul Clement, lawyer for the law’s challengers, argued that the entire law must be struck down if the mandate is found to be unconstitutional.  Then, government lawyer Ed Kneedler argued that the Court should not sever the mandate from two other major provisions in the law: guaranteed issue and community rating.  And finally, amicus lawyer Bob Farr argued for the ruling from the 11th Circuit Court of Appeals – that the individual mandate can be severed alone from the rest of the law.

Congressional Intent?  Statutory Interpretation? Objective Test?

One theme in today’s arguments was this: How should the Court decide what is severable and what is not? Should the Court try to understand the “parliamentary shenanigans” that went on in Congress in order to secure votes for the law?  Or should the Court go through all 3,000 pages of the law, piece by piece, and weigh whether each provision relies on the individual mandate to function properly as law?

Clement: Now everybody on this Court has a slightly different way of divining legislative intent. And I would suggest the one common ground among every member of this Court, as I understand it, is you start with the text. Everybody can agree with that.

Kagan: So Mr. Clement, let's start with the text. And you suggest, and I think that there is -- this is right, that there is a textual basis for saying that the guarantee issue and the community rating provisions are tied to the mandate. And you said – you pointed to where that was in the findings. Is there a textual basis for anything else, because I've been unable to find one.

But later Clement made the argument that there are objective reasons that the entire law, or at least the major portions (excepting the “hollow shell” of perifphery provisions) is all tied to the mandate

Clement: What you should do, is let me say the following, which is follow me this far, which is mandatory, individual mandate is tied, as the government suggests, to guaranteed-issue and community rating, but the individual mandate, guaranteed-issue, and community rating together are the heart of this Act. They are what make the exchanges work. The exchanges in turn are critical to the tax credits, because the amount of the tax credit is key to the amount of the policy price on the exchange.

The exchanges are also key to the employer mandate, because the employer mandate becomes imposed on an employer if one of the employees gets insurance on the exchanges.

But it doesn't stop there. Look at the Medicare provision for DISH hospitals, okay? These are hospitals that serve a disproportionate share of the needy. This isn't in Title I. It's in the other part that you had in your other hand. But it doesn't work without the mandate, community rating and guaranteed-issue.

Judicial Activism v. Judicial Restraint

Another theme was judicial activism versus judicial restraint.  If the Court acts to strike down the mandate, would it be more judicial active to strike down the whole law, or to uphold the rest of the law (and therefore leave in place an incomplete law that Congress never enacted)?  Justices mused about what Congress would do given various situations:

Scalia: 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.

Kennedy: When you say judicial restraint, you are echoing the earlier premise that it increases the judicial power if the judiciary strikes down other provisions of the Act. I suggest to you it might be quite the opposite. We would be exercising the judicial power if one Act was -- one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended. By reason of this Court, we would have a new regime that Congress did not provide for, did not consider. That, it seems to me, can be argued at least to be a more extreme exercise of judicial power than to strike -­ than striking the whole.

Heart of the Law?

What is at the heart of the Patient Protection and Affordable Care Act?  Paul Clement argued that it is the individual mandate, the piece that makes all the other pieces “work.”  But Farr had to disagree:

Farr: …the position that I'm advocating today, under which the Court would only take out the minimum coverage provision, I don't think would fit the description that you have given of taking out the heart of the statute. Now, I do think once you take out guaranteed-issue and community rating you are getting closer to the heart of the statute. And one of the -­ one of the difficulties I think with the government's position is that I think it's harder to cabin that, to draw that bright line around it. It's harder than the government thinks it is.

He’s starting to sound like one of the law’s challengers, right?

Clement ended to today’s arguments by pointing out that some provisions, like guaranteed issue and community rating, are meant to work as “patient protections,” and the mandate was enacted with the intent of “affordable care.”  So perhaps they are all at the heart of the Patient Protection and Affordable Care Act.  His conclusion then, is that if the Court strikes down these things, the whole law should go.

 

Important Links from today (Wednesday):

Audio file of severability oral arguments

Transcript of severability oral arguments

Audio file of Medicaid oral arguments

Transcript of Medicaid oral arguments

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