Health Reform in the Supreme Court: Day 3 Audio, Transcript

BY Jason Kane and Vanessa Dennis  March 28, 2012 at 1:54 PM EDT

Photo by Mark Wilson/Getty Images

Updated at 5:15 p.m. with Medicaid expansion analysis.

In this third and final day of Supreme Court arguments on the constitutionality of the health care reform law, two major questions remain before the Court:

  • If the requirement that most Americans purchase health insurance or pay a fine is dismantled by the Court, must the rest of the law fall with it?
  • And is the federal government’s major expansion of the state-based Medicaid program — which is expected to bring 16 million low-income Americans into the health insurance marketplace — allowed under the Constitution?

‘Severability’ of the Individual Mandate

(Full transcript below)

Marcia Coyle on the ‘Severability’ Arguments:

“This morning’s arguments focused on a hypothetical question. The justices have not yet decided whether the minimum essential coverage provision — the so-called individual mandate to purchase health care insurance — is held to be unconstitutional. But if they decide that it is, the question before them is whether the mandate can be severed from the rest of law or if the entire law must fall.

“The justices heard three very different arguments this morning. Paul Clement, who is representing 26 state attorneys general, the National Federation of Independent Business and four private individuals, argued that the minimum coverage provision is the heart of law — and that along with the guaranteed-issue and community-rating provisions, it is essential to Congress’ goal for the law of providing affordable health care [for more on those provisions, read Marcia's [preview of the day's arguments here](http://www.pbs.org/newshour/rundown/2012/03/health-care-reform-heads-in-the-supreme-court-a-guide-to-day-3.html)]. Justices Kagan, Ginsburg, and Sotomayor aggressively questioned that idea, with Justice Ginsburg saying that what the Court is really facing is the choice between “a wrecking operation and a salvage job — a more conservative approach would be a salvage job.” She and Justice Sotomayor indicated that if the mandate were severed, it would really be up to Congress and not the Court to deal with the fallout — that Congress has the proper role of fixing the law and the Court does not.

“That contrasted quite sharply with the views of Justice Scalia, who believes that once the heart of law is taken out, the whole law should probably fall. He expressed considerable cynicism that Congress would be able to deal with the fallout if the rest of the law is left standing. Justice Kennedy expressed concerns that if the heart of the law is taken out, insurers would be left with huge, uncertain risks. His concern seemed to be that that exercise of judicial power would be worse than Justice Ginsburg and Sotomayor’s concern about judicial overreach.

“The justices also heard from Deputy Solicitor General Edwin Kneedler, who was representing the government. He contends that many other provisions in the law are already in effect and have no connection to the mandate. If the justices decide that the mandate must be severed, he said that just two other provisions cannot function as Congress intended — the guaranteed-issue and community-rating provisions. Justice Breyer seemed to agree with that. He read a list of things that seem to have no relation to the minimum coverage requirement.

“And one additional lawyer, Bartow Farr, argued that only the mandate should be severed from the law if the mandate is found unconstitutional. He told them that Congress put many tools in this law in order to further its goal of protecting patients and providing affordable care, that the mandate is just one tool and that — if found unconstitutional — it could be severed while leaving in place the many independent reforms of the insurance market that operate independent of the mandate. Now, the justices really must consider whether Congress would want the law without the mandate.

“At this point, the justices seem to be divided. Those on the more liberal side of bench feel that it’s more an exercise of judicial restraint and it should be left to Congress to fix the law if the mandate is taken out — that it would be judicial activism to do more. The justices on the conservative side wonder if, without the heart of law, there would be consequences to leaving the law in place that Congress cannot fix. It appears many of them are still thinking through the issue and considering how to handle this if they do strike down the mandate.”

Health Care Reform in Supreme Court Day 3 Arguments

 

Medicaid Expansion

(Full transcript below)

Marcia Coyle on the Medicaid Expansion Arguments:

“This afternoon, the Court heard an hour of arguments on the last of four issues that it decided to review involving the Patient Protection and Affordable Care Act. This particular challenge was brought by 26 state attorneys general who claim that the new health care law’s expansion of Medicaid — which basically expands coverage to single adults under the age of 65 with incomes up to 133 percent of the federal poverty level — is unconstitutionally coercive.

“The justices explored a central question: When does the federal government’s inducement or pressure on a state to participate in a federally funded program cross the line into coercion? And it seemed to me that many of the justices were not fully persuaded that this qualifies. At the beginning of the arguments, Justice Kagan immediately confronted former Solicitor General Paul Clement, asking how this ‘big gift’ — this boatload of federal money that’s being given to the states to spend on health care for their impoverished populations — could be considered coercion. Clement said that the sheer amount of money offered to states becomes coercive and that if a state doesn’t participate in the expansion, it will not only lose federal funding tied to the expansion but all federal funds for Medicaid services that it offers the poor.

“The justices were really pressing both Clement and Solicitor General Verrilli, who was arguing for the government, to define ‘What is coercion?’ and ‘Where is the line?’ Neither Clement nor Verrilli seemed able to give them a satisfactory definition. Justice Sotomayor worried that if the Court came down in favor of the states in this particular instance, the precedent would be: The bigger the problem confronting Congress, the less power Congress would have to deal with it because it could be deemed coercive.

“Verrilli pointed out that the secretary of Health and Human Services has never cut off all Medicaid funds when a state has balked at the conditions of funding — that disputes are generally worked out between the secretary and the state. He also pointed out that 60 percent of all Medicaid expenditures are optional for the states, and that, while it may be a difficult decision to opt out of the expansion, it still is a choice they can make, and that means that it’s not coercion.

“Some justices, including Chief Justice Roberts, wondered: If this is such a good deal, why does the federal government need a club — the threat to withhold Medicaid funding? On that question, Verrilli argued that that the decision was Congress’ to make. It’s a policy decision, and the Court should respect that.

“In general today, Clement had a tougher argument, versus yesterday, when Verrilli had a bigger challenge arguing on the individual mandate. With the Medicaid argument over, that ends the three days of hearings before the Supreme Court. We now need to wait until June to see what the justices will decide on all four issues.”

Health Care Reform in Supreme Court Day 3 Arguments – Part 2

The NewsHour’s Health Page is full of related content about the health care reform law and Supreme Court case, including a timeline, a report card, a cheat sheet, and a public polling update. Watch our broadcast coverage and analysis of the proceedings and browse our photo essays of the ordinary Americans who traveled to Capitol Hill this week to support and protest the law.