Oral arguments and updated health care law predictions

March 29, 2012

SCOTUSPredictions on the ACA, part 1: The Anti-Injunction Act

Predictions on the ACA, part 2: The Medicaid Expansion

Predictions on the ACA, part 3: The Individual Mandate, part 1

Predictions on the ACA, part 4: The Individual Mandate, part 2

Predictions on the ACA, part 5: Severability

A few months ago, I made some predictions on how the Supreme Court will decide on the ACA’s various provisions currently being challenged.

The links to those predictions are listed above, and you are free to read through them if you want, but to save some time, I’ll just give you the conclusion for each one.

  • Unanimously affirm that the suit is not barred by the Anti-Injunction Act.
  • Unanimously affirm that the expansion of Medicaid by the ACA is constitutional.
  • Uphold the individual mandate 7-2.
  • Unanimously rule that the individual mandate is severable from the rest of the ACA.

Oral arguments on these issues were heard by the Supreme Court on Monday, Tuesday, and Wednesday of this week.

Those of you who have been reading the commentary and analyses by some so-called legal experts may be wondering whether I’m going to revise my predictions.

Although I may tweak my predictions here and there, I actually am going to stand by my original predictions, at least as far as the end results go.

“But, Jeremy,” some might say, “everyone is saying that the Court is going to strike down the Individual Mandate!!!”

I understand that, and that’s why I’m going to explain my conclusions in light of the oral arguments this week.

Given the case of Seven-Sky v. Holder, in which noted conservative Judge Laurence Silberman railed against the government’s attorney during oral arguments, but later upheld (and fervently defended) the individual mandate, it’s entirely possible that we can’t read too much into the Court’s oral arguments.

But, these oral arguments are all that we’ve got to work with to get inside the Justices’ heads, so we’ll have to make our best guesses based on what we’ve heard this week.

The oral arguments on Monday revealed that all of the Justices are very skeptical of the suit’s being barred by the Anti-Injunction Act, and are very likely to affirm.

The Medicaid expansion is a bit trickier than I thought, but it still seems quite likely that it will be upheld (though perhaps not necessarily unanimously).

The entire oral argument was framed by Paul Clement, the attorney for the 26 states challenging the expansion.

Clement’s argument was that the expansion is unconstitutionally coercive.

This is due to both the Secretary of Health and Human Services having the discretion to revoke all federal Medicaid funding for a state that refuses to accept the new conditions, and because the states have become too reliant on these funds.

This reasoning seemed to resonate with the conservative Justices.

The problem with that logic, though, is that every single expansion of Medicaid since its enactment in 1965 has operated the same way.

So, if the Court adopts Clement’s reasoning, it would mean that not only is the ACA’s Medicaid expansion unconstitutional, but all other Medicaid expansions are as well.

SCOTUS Clipboard

Moreover, it would introduce broad new entitlements for the states that could be construed to compel the federal government to continue funding a certain program, even against the wishes of Congress.

This would be a very aggressive move for the Court – far more aggressive than many of its conservative members are comfortable with (namely, Roberts, Kennedy, and, to a lesser extent, Alito).

Furthermore, the questions Roberts and Kennedy posed to the government’s attorney on the limits to Congress’s spending power were almost completely hypothetical – they didn’t directly relate to this situation at all.

Given these factors, the Court will likely uphold the Medicaid expansion, 5-to-4, 6-to-3, or 7-to-2.

However, the conservative Justices may very well insist that there be some new limits placed on Congress’s Spending Clause powers, but that this Medicaid expansion falls well within those limits.

This is likely to be the result with the decision on the individual mandate, as well.

I’m well aware of the widely predicted demise of the mandate after Tuesday’s oral arguments.

Nonetheless, just as with the Medicaid expansion, the objections offered by several of the Court’s conservatives (again, Roberts, Kennedy, and Alito) were more based on hypothetical situations instead of the case at hand (i.e., if Congress can do this, what can’t Congress do?).

Consequently, just as they may well do with the Medicaid decision, the Court’s conservatives will join the majority to uphold the individual mandate if and only if new limits on Congress’s  Commerce Clause powers are included (I actually predicted the exact same thing in my post from December).

This limitation may sound something like this: Congress can force Americans to purchase health insurance because of the special nature of health insurance; it can’t do that with everything (Kennedy seemed receptive to this idea during Tuesday’s oral arguments).

I was admittedly a bit less sure about this conclusion before the oral arguments Wednesday morning on severability, and here’s why.

The Court basically looked at three different alternatives in the circumstance that it did decide to strike down the individual mandate.

  1. The entire ACA goes (the challengers’ position).
  2. Only two provisions aside from the mandate go – the community-rating (lowers premiums for individuals in poorer health and increases them for healthier individuals) and guaranteed-issue (allows people to purchase coverage when they get sick) (the government’s position).
  3. Only the mandate goes (the Court-appointed attorney’s position).

Only Scalia (and presumably, Thomas) wholly endorsed the challengers’ position.

The other Justices all saw problems with that approach, and rightfully so.

Most of the provisions in the 2,700-page law have absolutely nothing to do with the mandate, and can fully operate independently from it.

As such, striking the entire law because of the individual mandate would turn current severability jurisprudence on its head (but the Court is well within its authority to do so).

The second option was also unpopular, since many of the Justices believe that the mandate affects more than just these two provisions.

The third option also failed to resonate with the Court because, despite the attorney’s arguments to the contrary, the Justices believe that taking that path will bankrupt the insurance industry.

So there are three options the Court can take on severability.

One: strike down the entire ACA along with the individual mandate.

This move is so out of line with existing precedent that I would have a hard time believing that Justices Roberts and Kennedy would get behind it.

The Supreme Court in WashingtonWithout either of those votes, this option is off of the table.

Two: the Court will examine the law and decide what’s killed along with the mandate.

The Justices all seemed to acknowledge in some way that this could be a possibility theoretically, but practically, they aren’t going to do it.

Seriously, the law’s 2,700 pages long; they aren’t going to go through the whole thing with a highlighter.

Third: the mandate is upheld, and the Court can punt the severability issue.

Considering how much the Court likes to punt issues, this seems the most likely scenario to me.

Going back to the issue of the mandate’s constitutionality, at least one conservative Justice will be brought onboard with the promise that new restrictions on Congress’s legislative powers will be imposed as part of the decision.

And one conservative Justice is all it will take to form a majority.

And I actually think that two conservative Justices – Kennedy and the Chief Justice – will come on board, making it a 6-3 decision.

Given the Court’s ability to surprise everyone, it’s possible that I will be proven wrong.

But we’ll have to wait several more months for the Court to hand down its decision to find out for sure.