Day Three – U.S. Supreme Court Hears Oral Arguments on PPACA’s Mi...

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Yesterday morning the U.S. Supreme Court addressed the complex legal question of whether or not to strike down the entire Patient Protection and Affordable Care Act (PPACA) if the Court finds part of the Act unconstitutional or otherwise illegal. This has become a major legal issue because Congress failed to include a “severability clause” in the final draft of the bill before it was signed into law.  

Severability clauses  generally provide that the balance of a law will remain in force in the event that any provision of a statute is declared unconstitutional or illegal. The inclusion of a severability clause in the language for most new legislation is typically standard practice. While the U.S. House of Representatives’ version of PPACA did include a severability clause, the version adopted in the Senate – which was ultimately signed into law – did not. The missing severability clause will become an issue only if the Court finds the individual mandate unconstitutional. 

Paul Clement, the attorney representing the 26 states challenging the law, tried to convince the Court that if the individual mandate is found unconstitutional, the Justices then must strike down the entire law.  Not to do so, Clement argued , would cause the Act to “limp along” and defy congressional intent. 

Reports indicate that the severability clause will play a key role in deciding PPACA’s fate. Justice Ruth Bader Ginsburg argued in favor of upholding the Affordable Care Act, stating that considering the better choice between “a wrecking operation and a salvage job, a more conservative approach would be a salvage job.” 

The Justices seem conflicted as to whether the entire Act would be thrown out. “There are so many things in the Act,” Justice Ginsberg stated, “…why make Congress redo that?”  Her sentiments were echoed by Justice Elena Kagan, whose comments suggested she favors keeping some PPACA provisions. “Half a loaf is better than no loaf,” she said.  Justice Antonin Scalia appeared to disagree, saying, “You want us to go through 2,700 pages…is this not totally unrealistic…to go through one by one and decide each one?”

Jeffrey Toobin, senior legal analyst at CNN, said, “I think the individual mandate is gone, based on the questioning.”  Justice Scalia suggested that if the individual mandate was struck down, the entire law must go . “My approach would be if you take the heart out of the statute, the statute is gone.” But should the Court decide to invalidate the mandate only, it will be left with the task of picking and choosing the surviving provisions. Justice Anthony Kennedy suggested that duty should fall to Congress. 

According to The Hill , Justice Kennedy seemed to side with the conservative justices, questioning whether the court would be overstepping its bounds by only striking down certain parts of the health care law.  The Hill also reported that Justice Kennedy was concerned about how a decision to strike only the mandate would affect insurance companies.   “We would be exercising the judicial power, if one provision was stricken and the others remained, to impose a risk on insurance companies that Congress had never intended,” Kennedy said.

Some health law experts are predicting that Justice Kennedy’s vote could ultimately decide the fate of the individual mandate, and ultimately of the entire law, if the Court rules that the entire Act must be struck down due to the lack of a severability provision. 

The final session of oral arguments before the Court will examine whether the Medicaid expansion provision of PPACA amounts to coercion against the states by the federal government.  We will provide a summary of that hearing shortly.

We have covered many PPACA-related issues since its inception, and will continue to follow these issues and provide updates and analysis for you.  Please visit www.HealthcareExchange.com for past blog posts, polls, surveys and numerous resources or www.benefitmall.com to view past Legislative Alerts.

The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal or tax matters discussed herein.

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