High Court Hears Arguments On Severability Of Individual Mandate In Health Care Reform Act

High Court Hears Arguments On Severability Of Individual Mandate In Health Care Reform Act

WASHINGTON, D.C. - (Mealey's) In the first of two sessions on March 28, the U.S. Supreme Court heard oral arguments on whether, if the individual mandate contained in the Patient Protection and Affordable Care (PPACA) is found unconstitutional, it can be severed from the remainder of the act (National Federation of Independent Business v. Kathleen Sebelius, et al., No. 11-393; State of Florida, et al. v. Department of Health and Human Services, et al., No. 11-400, U.S. Sup.).

(Transcript. Document #31-120404-011T.)

In States of Florida, et al. v. Department of Health and Human Services [enhanced version available to lexis.com subscribers], the U.S. District Court for the Northern District of Florida held that the individual mandate contained in the PPACA is an unconstitutional regulation of commerce and that because the PPACA contains no severance clause, the entire law must fail. A split 11th Circuit panel affirmed that the individual mandate is unconstitutional but reversed the holding that the provision is not severable from the rest of the act.

In arguing for the states, attorney Paul Clement argued that if the individual mandate is found unconstitutional, then the rest of the PPACA cannot stand.

Congress found, and the federal government conceded, that the community rating and guaranteed-issue provisions of the act cannot stand without the individual mandate, Clement said. Without the guaranteed-issue and community rating, the individual mandate would not operate in the manner Congress intended and would actually counteract Congress' goal of providing patient protection and affordable care because the cost of premiums would skyrocket.

Justice Sonia Sotomayor asked that even if it were true that the prices would spiral, what would be wrong with leaving it in the hands of Congress to fix.

Even if the mandate is struck, there would still be something for Congress to do, and the question becomes what task does the court want to give Congress, Clement responded. "Do you want to give Congress the task of fixing the statute after something has been taken out, especially a provision at the heart, or do you want to give Congress the task of fixing health care?" Clement asked.

Justice Ruth Bader Ginsberg said many things in the PPACA were unquestionably OK and asked why Congress should be made to redo those provisions.

"So why should we say it's a choice between a wrecking operation, which is what you are requesting, or a salvage job?" Ginsberg asked. "And the more conservative approach would be salvage rather than throwing everything out."

Clement responded, "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 at the very heart of this act." If you follow those provisions through, Congress would not have passed a hollow shell without the heart of the act, he added.

In arguing for the government, Deputy Solicitor General Edwin S. Kneedler said the court should not consider the issue of severability because the individual mandate contained in the PPACA is a constitutional exercise of Congress' Article 1 powers. However, if the court concludes otherwise, Kneedler said, it should reject the plaintiffs' proposition that the entire act must fail.

The vast majority of the provisions of the act do not apply to the petitioners but apply to millions of citizens and businesses not before the court, and the continuing validity of any particular provision could arise in litigation brought by the parties who are actually affected, Kneedler said.

There are some provisions in the act for which nobody would have standing to challenge, and Justice Antonin Scalia asked whether that meant those provisions would just continue even if another provision closely aligned to it has been struck down as unconstitutional.

Justice Ginsburg said it is not a choice between someone else bringing a case and a law staying in place, but who is the proper party to take out what is not infected by the court's holding. With all the provisions where there may be no standing, one institution does have standing, and that is Congress, she said. The question becomes whether the court is to "wreck the whole thing" or leave it to Congress, she said.

Kneedler responded that the court should leave what provisions to take out to Congress.

"One way or another, Congress is going to have to reconsider this, and why isn't it better to have them reconsider it - what - what should I say - in toto, rather than having some things already in the law which you have to eliminate before you can move on to consider everything in balance," Justice Scalia asked.

As a matter of judicial restraint, limits on equitable remedial power limit the court to addressing only the provision that has been challenged as unconstitutional, Kneedler said.

H. Bartow Farr III of Farr & Taranto, the court-appointed amicus curiae, argued that the government's position that the community rating and guaranteed-issue provisions could be struck was an example "of the best driving out the good" because without the minimum coverage provision, those two provisions would still open insurance markets to millions of people who were excluded under the prior system.

The individual mandate could be severed because even though the system would not work precisely as Congress wanted, it would serve the central goals of Congress in expanding coverage for people who were unable to get coverage or unable to get it at affordable prices, Farr said.

Kneedler, Assistant Attorney General Tony West, Deputy Assistant Attorney General Beth S. Brinkmann, Assistant to the Solicitor General Joseph R. Palmore and attorneys Mark B. Stern, Alisa B. Klein, Samantha L. Chaifetz and Dana Kaersvang, all of the U.S. Department of Justice; George W. Madison of the Department of Treasury; M. Patricia Smith of the Department of Labor; William B. Schultz, acting general counsel, and Kenneth Y. Choe, of the Department of Health and Human Services, all in Washington, represent the government.

The states are represented by Clement of Bancroft in Washington; Scott Douglas Makar, Joseph W. Jacquot and Timothy David Osterhaus of the Office of the Florida Attorney General in Tallahassee, Fla.; and Katherine J. Spohn of the Office of the Attorney General of Nebraska in Lincoln, Neb.

The National Federation of Independent Business is represented by Karen R. Harned of the National Federation of Independent Business, Professor Randy E. Barnett of Georgetown University Law Center and Michael A. Carvin, Gregory G. Katsas, C. Kevin Marshall and Hashim M. Mooppan of Jones Day, all in Washington.

Lexis.com subscribers can access briefs, pleadings and motions in this case.

Related content on lexis.com:

Introduction to the PPACA and HCERA of 2010

Kopp, Paley, Bacon and Foster on New Federal Health Care Reform Legislation - Its Impact on Employers and Employee Benefits Plans

Kevin Bress on the Community Living Assistance Services and Support Act (the "Class Act")

Like Your Health Plan? You Can Keep It (Maybe)

What Elder Law Attorneys Need to Know About PPACA and Health Care Reform

David L. Bacon, David S. Foster, Peter H. Durant and Regina S. Rockefeller on the Dramatic Constitutional Challenges to the Patient Protection and Affordable Care Act

PPACA's Adult Child Coverage Mandate

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