Supreme Court Reviews Health Reform Law: a Guide to Day 3

Photo by Mark Wilson/Getty Images

As Day 3 of the health reform hearings get under way, some things are already starting to seem routine. Outside the Supreme Court, the protesters arrive, the cameras roll, the health care reform debate is often tossed around in soundbites.

But inside the Court on the final day of arguments about the health care reform law, there are still two important questions to be debated, the resolution of which is hardly certain:

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?

For a preview of both of those arguments and a look at what to expect in the months ahead, we’re joined once again by Marcia Coyle of the National Law Journal.

Marcia, what will we hear today in the court?

For 90 minutes in the morning, they will ask for answers to a hypothetical: if the minimum essential coverage provision — the so-called individual mandate to purchase insurance — is held to be unconstitutional, can it be severed from the rest of the law, or must the entire law be struck down? In the afternoon, around 1 p.m., they will take up whether the new law’s expansion of Medicaid coverage for the poor and disabled is unconstitutional. They will hear arguments on that issue for one hour.

Let’s take one issue at a time. What does the first one, the ‘severability’ question, involve?

When the Supreme Court finds a provision in a statute unconstitutional, it generally presumes the invalid provision can be severed from valid provisions unless severing it would prevent the remaining provisions from operating as Congress intended.

The justices will hear basically three arguments on this issue this morning.

Former Bush administration Solicitor General Paul Clement of the Washington law firm Bancroft will have 30 minutes to argue for the challengers to the law: 26 state attorneys general, the National Federation of Independent Business and four private individuals. Clement contends that Congress considered the individual mandate essential to the law’s passage, its functioning and its ability to achieve Congress’ goal of near universal health insurance. Removing the mandate, he argues, would undermine the goals of the entire act and thus the whole law should fall if the mandate is unconstitutional.

The United States is represented by Senior Career Deputy Solicitor General Edwin Kneedler. The government argues that the mandate does not take effect until 2014, but a number of other provisions in the law are already in effect and have no connection to the mandate, which suggests that Congress intended the provisions to operate independently.

If the justices decide that the mandate must be severed, the government says that just two other provisions cannot function as Congress intended. Those provisions bar insurance companies from rejecting individuals with pre-existing health conditions and from raising premiums because individuals have medical conditions. Those provisions are known as the guaranteed-issue and community-rating provisions.

In an effort to hear all arguments on the issue, the Court appointed a well-respected Supreme Court advocate, H. Bartow Farr III of the Washington law firm Farr & Taranto to make the argument that only the mandate should be severed from the law if found unconstitutional. Although the mandate and guaranteed-issue and community-rating provisions were designed to work in tandem, Farr contends it is “improbable” that Congress would prefer to put many consumers back in the disadvantaged position they were in before the law’s passage. The law contains many independent reforms of the insurance market that operate independent of the mandate, he argues.

What is the Medicaid question before the Supreme Court?

The new health care law extends Medicaid benefits to an estimated 16 million non-elderly, non-disabled persons whose incomes are less than 133 percent of the federal poverty line. The federal government will pay 100 percent of the cost through 2016, at which point its subsidy gradually will decrease each year until 2020 when it remains at 90 percent. Medicaid is a voluntary federal-state program which was created in 1965.

The challengers contend that the Medicaid expansion unconstitutionally coerces states into accepting the new program requirements. Although the states could opt out of the law’s expansion, they argue that is financially unfeasible because they would lose all federal Medicaid funding. The Medicaid expansion is an abuse of Congress’ spending power and violates state sovereignty, argues Paul Clement for the states.

The Solicitor General of the United States, Donald Verrilli Jr., will tell the justices that this expansion of Medicaid differs little from the many expansions and changes to the program that Congress has enacted since 1965. Just because the funding condition is generous does not mean it is coercive, he argues, and states retain the option to opt out.

Has the Court dealt with coercion claims by the states before?

The Court has never found a condition on federal funding to be coercive of the states. The justices examined such claims only twice before, in 1937 and in 1987. The Court did say in those cases that there could be a point at which federal pressure could cross the line into unconstitutional coercion, but it has never defined that point.

It should be noted that not all states are challenging the Medicaid expansion. A brief was filed by 13 states supporting the expansion and arguing that states refusing to participate do not lose their federal funding automatically because the secretary of the Department of Health and Human Services has discretion to withhold some or all of a state’s federal Medicaid money.

The Supreme Court’s decision to consider this issue came as a surprise to many legal experts. None of the lower courts that considered the health care lawsuits agreed with the challengers on the Medicaid coercion question.

After all of the arguments are over, what happens next at the Supreme Court?

The justices will gather in a private conference to cast their votes on the questions raised during the three days of arguments. If he is in the majority in those votes, Chief Justice John Roberts Jr. will assign the majority opinion to a particular justice. If he is in the minority, the assignment power goes to the most senior justice in the majority. They then begin the drafting and circulation of opinions with possible revisions until decisions are ready for release to all of us.

When do you think we will see a decision or decisions?

I would be surprised if we saw anything before the end of June, which is usually when decisions in the term’s most difficult and complicated cases are issued.

How big a role do you think politics will play in the justices’ decisions?

We are in a period of considerable cynicism about our government and not without good reason. I may be criticized as naïve, but I don’t believe that when the justices sit and cast their votes on the health care law, they will do it with an eye to what may be the best result for the Democrats and Republicans in the November elections. I do believe that each justice is the sum total of his or her experiences in life and in the law. They bring those experiences to bear on the cases before them. They are not blank slates. Their personal biases are restrained by certain doctrines such as stare decisis — respect for prior decisions — and deference to legislators because they are closer and accountable to the people. Some justices are more faithful to those doctrines than others. We should try to judge the outcome here on the strength and honesty of their analysis. If we don’t like the results, our recourse is to remember that this is an election year.

For more analysis from Marcia Coyle on this week’s health care reform hearings, browse The National Law Journal’s Health Care at the Supreme Court page. And don’t forget to tune in tonight’s NewsHour for coverage of the final day of arguments.

Watch Tuesday’s broadcast segment and discussion:

Our Health Page is full of additional information about the Supreme Court case and the health care reform law, including a timeline, a report card, a cheat sheet, and a public polling update. And be sure to browse our photo essays of the ordinary Americans who traveled to Capitol Hill this week to support and protest the Affordable Care Act.