Today at the Supreme Court the justices will hear arguments on two issues in the Obamacare cases: whether the Medicaid provisions unduly infringe on the states and whether, if the individual mandate is unconstitutional, the rest of the health-reform statute can survive.
As to the Medicaid provision, this was not an issue on which many observers focused, but it is a classic 10th Amendment question. This is an issue that the Supreme Court might never reach if it finds the individual mandate unconstitutional and also finds that the rest of the statute must fall as well. But if it does reach the issue, the court will decide if the expansion of Medicaid eligibility and the requirement that states expand their Medicaid rolls improperly coerces the states.
The Medicaid provision requires states to include all non-seniors whose income is below 138 percent of the federal poverty level. Robert Alt at Heritage Foundation says the key is whether “the justices [will] be receptive to the states’ argument that, in addition to coercion, the Medicaid expansion effectively ‘commandeers’ the organs of state government to carry out federal imperatives. Twice the court has struck down federal laws on commandeering grounds, but the argument here is more complicated, given that the states’ initial entry into Medicaid was voluntary, even if (at this late date) their continued participation is basically required.”
The government will say that the states can opt not to expand their rolls and thereby escape the requirement. The challengers will argue that the penalty — the deprivation of billions in Medicaid funding — is so extreme and coercive as to force the states to comply.
The tricky part here is for the challengers to draw a line (yesterday, the government was under pressure to come up with a line-drawing principle in the context of the individual mandate) that would not wipe out other federal actions, such as conditioning of highway funds on state legislation (e.g., seat-belt laws). In a practical sense, this may be such a messy area that the justices will be inclined to find a way to avoid it altogether.
Ah, the way to do it would be to wipe out the entire statute in the context of severability! And that is where the real action will be.
If the individual mandate falls, will the entire statute have to go? There are two legal tests for this issue. The first is whether Congress would have passed the statute without the mandate. If not, the rest of the statute has to fall. The more lenient test is whether the rest of the statute would work as Congress intended in the event the mandate is invalidated.
As to the first test, the congressional history (the last-minute deals, the wrangling for the 60th Senate vote, etc.) suggests that the individual mandate was essential to getting the bill through Congress.
But even under the alternative test the government has its problems in preserving the rest of the statute. Paul Clement in his brief for the states argues: “Without the constitutionally invalid individual mandate, Congress would not have enacted the provisions designed to ensure a supply adequate to meet the demand created by the mandate or the cost-savings provisions designed to counterbalance the expensive supply-side provisions. Accordingly, this truly is a case in which ‘it is evident that the Legislature would not have enacted those provisions which are within its power, independently of that which is not.’ ”
Virtually all observers agree that at least two provisions would be endangered if the mandate fails. Alt writes: “Even the Obama Administration’s approach to severability, which concedes that a few provisions closely related to the mandate would have to fall with it, highlights the difficulties that the Court would face in drawing the severability line. The Administration allows that, “if the Court invalidates the minimum coverage provision and concludes that there are no impediments to its reaching the question of severability, it should invalidate only the guaranteed-issue and community-rating provisions that take effect in 2014 as non-severable.” In other words, without the individual mandate these provisions become inordinately expensive and hence unworkable.
But there are many more provisions than just those that would then be on the chopping block. The “minimum loss ratio” regulations, the limits on cost-sharing, the preventive-care requirement and a host of other provisions become, without the mandate, expensive and therefore inimicable to universal coverage, the stated purpose of Obamacare. Lyle Denniston at SCOTUS blog observes:
Commenting that many other provisions of the [Affordable Care Act] “do not bear as obvious of a relationship to increasing the demand for or supply of health insurance,” the states’ brief nonetheless walked the Court through all of the remaining titles of the Act and argued that each of them is meant in some way to contribute to the goal of near-universal health insurance without adding to the federal budget deficit. These include major increases in Medicare spending on health care for the elderly, as well as various cost-cutting and quality-of-care initiatives to bring down the overall cost of health care. In short, the brief asserted, all of the hundreds of provisions “are part and parcel of … the supply-meets-demand vision of near-universal insurance coverage.” The mandate, it said, cannot be “decoupled” from any of the Act’s provisions.
If even a few of these provisions are found to be unworkable without the mandate, the court will likely throw up its hands and strike the statute in its entirety rather than return a piece of Swiss cheese to Congress.
One important consequence of this legal battle, I think, is a bit of a comeuppance for the left, which has treated the Constitution as if it were a museum piece rather than a real and serious framework for governance. It comes as surprise, I am sure, for liberals to observe how serious are the restrictions on federal power in our governing document. A conservative legal scholar who has worked closely with the challengers mocked the astonished reaction on the left. “You mean a text might have a real meaning beyond what I want it to mean? Incomprehensible. That’s so reactionary! That would mean the Constitution could be used not just as a sword and a shield when we want, but gasp, when conservatives invoke it. How can that be?” Indeed.
We’ll have more later in the day.