04.03.12

Three Ominous Moments During the Affordable Care Act Severability Hearing – Could They Actually Save the Mandate?

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This post was written by former O’Neill Institute Research Assistant and current Georgetown Law 2L Dinesh Kumar, who attended day three’s morning session of the Supreme Court’s hearing on the Affordable Care Act.

Every aspect of the Affordable Care Act (ACA) Supreme Court oral arguments has been dissected in the days following the historic hearings, including the “severability” issue (dealing with the question of what, if any, provisions of the law are valid if the Court finds the “individual mandate” to purchase insurance to be unconstitutional).  Professor Lawrence Gostin of the O’Neill Institute at Georgetown Law also gave his comprehensive take on the previous day’s individual mandate hearing here.  As I reviewed the many perceptive blog posts reacting to the severability argument (good examples of which are here, here, and here), I wondered what I could add from the perspective of a law student lucky enough to score a seat inside the courtroom.  As a supporter of the mandate – on constitutional, economic, and public health grounds – I’ll briefly highlight three aspects of the proceedings I found troubling.

 Justice Kennedy and judicial “restraint”

Severability has always been a concept tied to the ideal of judicial restraint ever since Chief Justice Marshall implored following Marbury v. Madison that while a provision deemed unconstitutional must fall, all other parts of a law should be given “full effect” as long as they are “not repugnant to the Constitution.” Several justices urged restraint on the part of the Court during the severability hearing; Justice Ginsburg called a “salvage job” preferable to a “wrecking operation,” and others repeated that a “half a loaf of bread” was better than no loaf at all.  But at one point Justice Kennedy, whose vote will perhaps decide the case, echoed a paradoxical notion of “restraint” put forth by Justice Scalia: That striking down the entire law would actually show more restraint than allowing some portion to stand while killing the mandate.  If Congress were allowed to start anew rather than being returned a law that spoiled its intended effect on the insurance industry, his thinking went, the Court would at once be deferential to Congress and true to its own constitutional ideals.  Justice Kennedy’s definition of restraint displays a kind of logic that makes it unclear whether he believes the most restrained thing to do would be to uphold or strike down the entire law. 

Worrying about the insurers but not the uninsured

At several points the justices worried what would become of the health insurance industry if various severability scenarios played out.  While opponents of the law want the Court to repudiate it wholesale, the federal government argued that if the mandate is unconstitutional, the Court – in order to avoid a cost “death spiral” to insurers – must also strike down the law’s requirements that insurers enroll people regardless of preexisting conditions (“guaranteed issue”) and set premium rates according to community averages rather than individual medical history (“community rating”).  A Court-appointed private lawyer also argued that the law could keep guaranteed issue and community rating intact even if the mandate fell, because other subsidies exist to enroll individuals into private insurance.  Justices Scalia and Alito voiced the most concern over this third way, suggesting that insurers could go bankrupt if they had to abide by these requirements while not benefiting from the huge pool of premiums that the mandate would provide.  Furthermore, when the government pointed out that several provisions were already in place – including allowing young people up to age 26 to stay on their parents’ plan – Justice Scalia suggested that these provisions anticipated the mandate and that insurers would go bankrupt if forced to abide by these existing provisions if the mandate were struck down.  Justice Sotomayor noted in response that keeping young, largely healthy people on its rolls is a net economic benefit for insurers.  The overall concern that the conservative justices voiced for the insurance industry was striking.  When faced with the idea that popular under-26 provision was already in place, why would Justice Scalia sympathize with his perceived plight of the insurance industry rather than with those who would go uninsured if he struck down that provision?  As Justice Scalia himself noted, the basic intent of Congress is in the full title of the Act: 1) patient protection, and 2) affordable care.  While he and the other conservative justices acutely questioned the “affordable” part – not only as it relates to patients but to industry as well – no one seemed to make a fuss about the “patient protection” part.

Is the rest of the law a “hollow shell”?

The justices seem to agree with the simple proposition that many provisions of the massive health law have nothing to do with the individual mandate; Justice Breyer noted as examples those pertaining to biosimilars exclusivity, the Indian Health Service, and support for coal miners with black lung disease.  But Paul Clement, arguing for the petitioners, argued that the mandate was the “heart” of the law and all other provisions were merely peripheral; at one point he urged the Court not to return to Congress a “hollow shell” of a law and to instead wipe it all out.  As someone whose job before law school required closely monitoring Congress’s health reform deliberations and analyzing various delivery system reforms (unrelated to the coverage mandate) that could potentially greatly impact public health – such as comparative effectiveness research, a national strategy for quality improvement, and strengthened community health centers – I found the characterization of these and hundreds of other provisions as a “hollow shell” disheartening.  But the justices cannot at once acknowledge that many provisions stand alone and are “perfectly okay” (in the words of Justice Ginsburg) while also being unable to find a proper “dividing principle” between the mandate- and non-mandate-related provisions.

These three aspects of the argument may not bode well for the fate of the law, but as many have noted, it is dangerous to predict the Court’s opinion based on oral arguments.  These “troubling” moments may actually indicate that the Court will ultimately uphold the whole law including the mandate, because they demonstrate that the overarching sentiment on the part of the justices was outright confusion.  The justices, conservative and liberal alike, found the prospect of combing through the law to find a “dividing principle” distasteful and beyond the appropriate jurisdiction of the Court (Justices Scalia and Kagan elicited hearty laughs in the otherwise tense courtroom in a lighthearted exchange on Scalia’s law clerks relishing the idea of reading 2,700 pages of text).  Justice Kennedy asked both sides what test they believe the Court should properly follow in coming to its decision.  Lawyers for both sides noted that “Congressional intent” was the major principle for the Court to consider, but seemed to acknowledge that no clear test existed, because the Court had never considered an instance where it had to decide what to do with the rest of a law after cutting such a vitally important provision from its center.  In severability cases of the past, the Court has traditionally had to deal with the aftereffects of cutting a less central provision.  As SCOTUSBlog has noted, the complexities inherent in the Court’s severability decision may ultimately lead to the conclusion that the most prudent thing to do is to uphold the individual mandate.

Regardless of the concerns I have for the fate of the law following the arguments, I could not have asked for a more interesting and illuminating experience as a first-time visitor to the Court.  Between the breathless media coverage and the mix of protestors outside and onlookers within (congressmen, cabinet members, and healthcare industry executives sitting among those who had waited for hours wearing everything from hoodies to pinstripes), I felt a palpable sense of the importance of this case for the future of American health care.

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