Obamacare Day 3: Court May Strike Down Entire Law, Not Just Mandate


ACRU Staff


March 30, 2012

This column by ACRU Senior Legal Analyst Ken Klukowski was published March 28, 2012 on Breitbart.com.

If the Supreme Court strikes down Obamacare’s individual mandate (which is very likely after yesterday), will it also strike down President Obama’s entire 2,700-page law? The justices signaled they might do so during the third day of Supreme Court arguments.

Most of the time when part of a law is invalid, courts “sever” that part from the rest of the law and save the rest. This ruling of “severability” often coincides with the law at issue having a severability clause, where Congress declares that if part of the law is found unconstitutional, a court should save the rest. Courts can sever a law even without such a clause, but it gives the court more latitude because there’s no rock-solid indication that Congress wanted that outcome.

The Supreme Court has three issues when it comes to Obamacare. It can (1) totally sever the individual mandate section, retaining the other 450 sections; (2) partially sever the mandate, striking down some sections but keeping the rest, or (3) can hold the mandate “totally nonseverable” and strike down the entire Obamacare law.

The normal route of severing the individual mandate should not be the outcome in this case, not just because Congress included no severability clause in Obamacare, but also because of the unique role that Section 1501’s individual mandate plays in financing the entire Obamacare system.

The attorney for the challenger states and private businesses, Paul Clement, explained:

“What makes this different is that the provisions that have constitutional difficulties or are tied at the hip to those provisions that have the constitutional difficulty are the very heart of this Act… they are interconnected to the exchanges, which are then connected to the tax credits, which are also connected to the employer mandates, which is also connected to some of the revenue offsets, which is also connected to Medicaid; if you follow that through what you end up with at the end of that process is just sort of a hollow shell.”

So in order to go the route of partial severability, the justices would have to go through Obamacare line by line, guessing which parts Congress would want to keep and which ones it would not.

The courtroom erupted in laughter when Justice Antonin Scalia rejected that possibility, saying, “What happened to the Eighth Amendment? You really want us to go through these 2,700 pages?” The Eighth Amendment is the part of the Constitution that forbids cruel or unusual punishment.

Justice Samuel Alito then looked to whether Congress would deliberately have created a train wreck. Obamacare imposes $700 billion in costs on the insurance industry, $350 billion of which is supposed to be offset by the individual mandate, and $350 billion from Obamacare’s expansion of Medicaid. He asked what happens if the Court nullified one half of that funding, indicating that Congress would not have liked the result.

This issue arises because most of Obamacare is about imposing mandates on businesses, employers, insurers, healthcare providers, and families. Each mandate carries a hefty cost. Forcing millions of healthy people to buy insurance and pay much more than they need to is the only way to force enough money into the healthcare market to prevent it from collapsing under the weight of the government’s commands.

Kennedy was quick to follow up, asking if courts should impose that kind of risk on the entire healthcare system that Congress’s law never intended: “When you say judicial restraint, you are echoing the earlier premise that it increases the judicial power if the judiciary strikes down other provisions of the Act. I suggest to you it might be quite the opposite… We would have [created] a new [law] that Congress did not provide for, did not consider. That … can be argued at least to be a more extreme exercise of judicial power than striking the whole [law down].”

But it’s a mistake to think Kennedy is the swing vote on this issue of severability. He’s the fifth vote on the individual mandate but not severability. That crucial role likely falls to Chief Justice John Roberts, who favors the Court taking narrow action and not going further than necessary in each case.

But there is reason for hope in this case that Roberts thinks part or all of the law must fall with the individual mandate. Severability is about giving effect to Congress’ intent.

Roberts reasoned, “Congress had a balanced intent. You can’t look at another provision and say this promotes patient protection without asking if it’s affordable.” He thus signaled that if Obamacare were to cause prices to rise without the offset created by the individual mandate, then you could not separate the two without upending Congress’s plan.

There were three sides to the government’s severability argument. The central core of Obamacare is made of three provisions: the individual mandate, the guaranteed-issue provision that no one can be denied coverage, and the community-rating provision that you must charge people the same for health insurance, not accounting for any of their individual health factors (such as having cancer).

These three cannot be separated because the text of the mandate itself declares that it is necessary to the guaranteed-issue and community-rating provisions. So the Justice Department argued that those other two would have to go, but keep the rest. And the Court appointed an outside lawyer to play devil’s advocate to argue that you could save the entire law.

The government mainly did so by saying that when the law said the mandate is “essential” to the other two provisions, it really means “helpful.” Scalia called this an “imaginative” definition that defies the meaning of the word in the English language and challenged the lawyer to cite a single dictionary that supported him (there were none).

Even Justice Elena Kagan admitted that if you keep the entire law in place without the individual mandate, the entire health insurance industry would “crash and burn.” Justice Sonia Sotomayor agreed, saying one major source characterized the result as a “death spiral” for financing healthcare.

But when Obama’s lawyer argued that Congress could handle fixing the law if the mandate was struck down, Scalia retorted, “It’s unrealistic to say, ‘Leave it to Congress.'” Besides, another part of the law says the individual mandate is critical to all of Obamacare’s healthcare reforms.

Instead, it’s the job of the courts to decide how much of the law to keep. There are apparently no votes for totally severing the mandate, and we’ll find out in June whether there are five votes to strike down significant parts of Obamacare or instead, whether they will take down the entire law.

That last option is the one we should all be hoping for.



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