Court signals entire health care law might need to be struck down

MSNBC, By Tom Curry –

March 28, 2012: In the Supreme Court’s final day of arguments on the constitutionality of the 2010 health care law, the justices wrestled Wednesday with what happens to the law if they strike down the provision that requires the uninsured to buy insurance.

“I think a majority of the court believes that if it rules that individual mandate is unconstitutional, then the rest of the health care law probably cannot be saved,” reported NBC’s Pete Williams after hearing the 90 minutes of oral argument.

“It would seem that a majority of the court — again, breaking down along the familiar lines — believes … it would be a very difficult, almost impossible, chore to figure out which parts of the law.

Williams reported that the justices were “very concerned” about the effects on the insurance industry of leaving intact the obligations imposed on it to offer coverage to all who seek it without the source of income from the individual mandate.

“They are very worried about saddling the insurance industry with that,” he said.

Justice Anthony Kennedy said during Wednesday’s argument he thought it would be the ultimate in judicial activism to leave in place insurance reforms such as guaranteed-issue — the requirement that insurance companies offer coverage to anyone, no matter how seriously ill — if the individual mandate is struck down.

Justice Antonin Scalia seemed to suggest at one point during Wednesday’s argument that Congress might find itself unable to repair what remains of the law if the justices invalidate parts of it. “There is such a thing as legislative inertia, isn’t there?” Scalia said.

Justice Elena Kagan, the former solicitor general in the Obama administration, indicated that she might vote to preserve all other parts of the law except guaranteed issue and other insurance reforms, if the court struck down the individual mandate.

Referring to the new insurance marketplaces, or “exchanges,” which the law sets up, Kagan asked, “Is half a loaf better than no loaf? And on something like the exchanges it seems to me a perfect example where half a loaf is better than no loaf. The exchanges will do something.”

And Justice Ruth Bader Ginsburg told Paul Clement, the attorney representing the states who oppose the law, “There are so many things in this Act that are unquestionably okay…. Why make Congress re-do those?”

She told Clement, “Why should we say it’s a choice between a wrecking operation, which is what you are requesting, or a salvage job. And the more conservative approach would be salvage rather than throwing out everything.”

A ruling striking down the individual mandate seemed a plausible scenario after Tuesday’s argument in which Solicitor General Donald Verrilli, arguing the case for the Obama administration, came under heavy pressure from Justice Kennedy and conservatives on the court, who wanted him to justify the law’s requirement that uninsured people purchase coverage.

The 2010 Affordable Care Act does not contain a severability clause so the justices were confronted with the task of trying to ascertain what Congress would have wanted, if it knew that part of the law would be struck down.
The Obama administration argues in its brief that the high court should hold that only two provisions of the act can’t be severed from the individual mandate provision.

The two provisions that the administration says are inseparable are guaranteed issue and “community rating” — which means insurance premiums do not vary by individuals’ health characteristics or health status.

The Obama administration argues that without the individual mandate, the guaranteed issue and community rating provisions “would drive up costs and reduce coverage, the opposite of Congress’s goals.” They, therefore, can’t be severed from the individual mandate and “must be invalidated if the court finds it unconstitutional.”

But all the other provisions in the law “can operate independently and would still advance Congress’s core goals of expanding coverage, improving public health, and controlling costs even if the minimum coverage provision were held unconstitutional.”

Those other provisions include, for example, an increase in the Medicare tax on people who earn more than $200,000 a year, a requirement that children up to age 26 be covered on their parents’ health insurance policy, and an expansion of prescription drug benefits for people on Medicare.

But arguing for the National Federation of Independent Business, Michael Carvin, a former top Justice Department official in the Reagan administration, argues in his brief that while severability normally removes “a small discrete part” of a law to preserve “a larger coherent whole,” in the case of the health care overhaul, the issue “is removing a large coherent whole to preserve small discrete parts.”

It is inconceivable, he contends, that Congress, “trying to adopt a comprehensive solution to a perceived crisis,” would have been content with “the menagerie of tag-along provisions that remain after a statute’s pillars are removed.”

The court, he said, can’t take on the task of examining all the details of the law. “There are simply too many provisions to engage in such granular inquiries … Once numerous, substantial pieces of the legislation cannot operate as intended, this Court should invalidate the whole statute.”

Once the law is struck down “let Congress handle rebuilding,” Carvin says.
Also to be argued Wednesday is the constitutionality of Congress’s expansion of the joint federal-state Medicaid program for low-income people.

The states traditionally were required to offer Medicaid only to low-income people in certain categories: families with dependent children, the elderly, blind people, the disabled, children, and pregnant women. But the 2010 law requires states to cover all individuals under age 65 with incomes up to 133 percent of the poverty level.

More than two dozen states are asking the court to strike down the Medicaid expansion on the grounds that the law coerces the states into going along with the Medicaid expansion.

The states contend that the law threatens them “with the loss of every penny of federal funding under the single largest grant-in-aid program in existence — literally billions of dollars each year — if they do not capitulate to Congress’ steep new demands. There is no plausible argument that a state could afford to turn down such a massive federal inducement, particularly when doing so would mean assuming the full burden of covering its neediest residents’ medical costs … .”

But the Obama administration argues that it isn’t forcing the states to do anything. States “are free, as a matter of law, to turn down federal Medicaid funds if they view program conditions as sufficiently contrary to their interests,” Verrilli says in his brief.

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