March 29th, 2012
It’s finally over. After nearly six hours of oral argument over the course of three days, the two cases challenging the constitutionality of the Affordable Care Act have been officially submitted to the Justices for decision.
Two separate issues were argued on Wednesday. In the morning, the Court debated “severability,” meaning the implications for the rest of the ACA of a possible decision invalidating the statute’s minimum coverage requirement (the “individual mandate”). In the afternoon, the Court took up the question – relevant to the states’ suit but not to the NFIB’s – of whether the ACA’s heavily subsidized expansion of the Medicaid program to uniformly cover individuals earning up to 133 percent of the federal poverty level exceeded Congress’s power under the Constitution’s Spending Clause to offer financial incentives to states in exchange for complying voluntarily with federal rules.
The group of states seeking to invalidate the ACA had lost in the lower court on both issues, and had not intended to pursue the Medicaid challenge further until the Supreme Court decided on its own authority to consider it. Their counsel, Paul Clement, therefore led off each session as the petitioner rather than speaking second as the respondent, which had been the case for previously argued issues. Solicitor General Verrilli argued for the United States on Medicaid, with Deputy SG Edwin Kneedler arguing severability. Because neither party in interest took the view that all the other provisions of the ACA were severable from the mandate and should therefore still be enforced, a private lawyer argued that position at the Court’s request.
The quality of analysis and discourse remained high throughout the proceedings, but fatigue had set in. During the morning session, the Justices questioned the workload associated with evaluating the viability of each provision of the thousand-page law should the mandate be invalidated. Justice Scalia joked that the Eighth Amendment’s prohibition on cruel and unusual punishment might rule out that approach. When Justice Kagan quipped that the task of review might be easier for Justice Scalia’s clerks because they would only look at the statutory text, Justice Scalia quickly replied: “I don’t care whether it’s easy for my clerks. I care whether it’s easy for me.”
By afternoon, the environment had turned positively raucous by Supreme Court standards. After a series of wisecracks by several Justices, Chief Justice Roberts (who had made a very good one himself) fought off his own punchiness and cautioned his colleagues: “That’s enough frivolity for a while.”
The severability discussion. The arguments were certainly not frivolous in the other sense of that word, but shouldn’t produce surprises when the Court issues its ruling. On severability, the Justices enjoyed discussing if the legal standard should be Congress’s preference for enforcing or not enforcing one provision of a law in the absence of another provision, or an evidence-based determination by the Court as to whether or not the severed provisions would be workable on a standalone basis. The Court probably won’t resolve that longstanding debate. If indeed they invalidate the mandate, which remains anyone’s guess, they are most likely to adopt the pragmatic recommendation of the government, which is to invalidate two additional provisions as well – guaranteed issue and community rating – lest insurance markets collapse in a death spiral of adverse selection. In practice, actual health insurance markets tend to be more resilient than such a scenario predicts, but it would be a reasonable outcome should the mandate be held unconstitutional.
The Medicaid coercion discussion. The Medicaid argument was similar. The possibility of a radical restatement of law emerging from Supreme Court scrutiny of the Medicaid expansion had caused considerable anxiety among environmentalists, education advocates, and others who rely on federal purchases of state cooperation to achieve their regulatory goals. The Court obliged with an engaging discussion of whether federal spending can be unconstitutionally coercive by putting so much financial support at risk as to make it impossible for a state to refuse funding and thereby avoid the associated federal conditions for receiving it.
This notion isn’t as alien to health policy liberals as they may imagine. Paying people more than small amounts to participate in medical research, for example, is often criticized as “undue inducement” tantamount to coercion. Both concepts are analytically imprecise. Coercion logically involves negative influences such as force, threats, and penalties rather than positive influences such as temptations, offers, and rewards. It is hard to imagine the recipient of a massive payment being worse off than had the payment been smaller or non-existent. The Court seemed finally to reach this view, but less explicitly, as the conversation moved away from regarding receipt of federal largesse as a problem in itself and focused instead on identifying existing benefits a state might lose by refusing the Medicaid expansion.
The petitioners didn’t make a clear case for those losses with any Justice, however, rendering it very likely that the government will prevail. The long history of qualitatively similar federal subsidies also helped the government’s case. Showing no inclination to roll back the New Deal by judicial command, Chief Justice Roberts seemed to conclude that the states had stuffed their mattresses with federal money for many years and now must lie on them.
The Lessons Of Day Three
Are there more general lessons to take away from the final day of oral argument? I can think of three, all of which involve ugly truths about the Affordable Care Act litigation that were less apparent in the first two days when the participants were fresher.
- The plaintiff states truly dislike and distrust not only the Administration but the federal government. In the Medicaid argument, the plaintiffs asserted that the Medicaid statute’s grant of discretion to the HHS Secretary to withhold existing funds based on a state’s refusal to expand its program in response to new federal law implied that she would actually do so frequently and arbitrarily, and they took no comfort from Justice Breyer’s assurances that the Secretary’s decisions must be reasonable and that the courts would prevent her from abusing her discretion. The plaintiffs also argued that money offered states by the federal government was originally and rightly state money that had been stolen through federal taxation. Moreover, these particular states don’t seem to like the people who most benefit from the Medicaid expansion, arguing that the federal government is holding hostage the “visually impaired and disabled” (deserving poor?) to the interests of “healthy, childless adults” (undeserving poor?). In the severability argument, counsel for the states made his contempt for the ACA even clearer, flatly asking the Justices if they want Congress to waste its time fixing a statute whose unconstitutional heart had been excised, or if they want (a much more Republican) Congress to get on with the “task of fixing health care.”
- The government can’t explain its own law. This problem predates the Supreme Court’s involvement, but was evident throughout the oral arguments. The Administration’s lawyers seemed unable to describe the most comprehensive health care law in American history as anything more than a coverage expansion. All one has to do is read the ACA’s table of contents to appreciate that it is intended not only to improve health insurance coverage (Titles I and II), but also to improve the quality and efficiency of health care services (Title III), to improve public and population health (Title IV), and to reinvent the health care workforce (Title V). In the severability discussion, the Deputy SG said hardly a word to refute the plaintiffs’ characterization of the mandate as the “heart of the Act,” the remainder as a “hollowed-out shell” composed of scattershot sections with no cohesive theme, or “bankrupting insurance companies” as the only consequence of maintaining the rest of the law absent the mandate. In fact, undertaking simultaneous improvements in health insurance, health care delivery, and public health is the ACA’s extraordinarily ambitious agenda, and its cost-control provisions could prove even more important than its coverage expansion provisions. By failing to describe the ACA accurately, the government essentially abandoned the ACA’s hard-earned delivery system, public health, and workforce innovations. Perhaps more importantly, it failed utterly to make the case that the ACA represents a comprehensive regulatory scheme to restructure $3 trillion annually of American commerce, which might have protected the mandate from constitutional attack in the first place. In the Medicaid argument, time had almost expired before the government, almost as an afterthought, thought to explain that the expansion was intended to address a serious problem of unaffordability of health insurance in the United States, or to suggest that being able to access health care without risking financial catastrophe helped ordinary Americans “secure the blessings of liberty.”
- The political environment is toxic. Particularly in the debate over severability, pretty much every reference to Congress generated a cynical reaction from someone. Should Congressional intent guide the Court? Maybe not, because “legislative inertia” might keep Congress from repairing the remaining statute properly. Should one give Congress a “clean slate”? It depends on what it might do, which is a function of who controls it. And the difficulty of getting 60 votes in the Senate. Why had Congress passed several provisions together? Not because they made sense as a package, but because logrolling was necessary to get the required votes in favor. In the rare instance when neither counsel nor any Justice was smirking at politics, the gallery was. When Mr. Clement suggested that truly bipartisan provisions of the ACA could be readily re-enacted by Congress even if the Court struck down the law in its entirety, the courtroom erupted with sufficient force that he stopped short and said “you can laugh at me if you want.” It may be naïve to have hoped that the Court would ascribe democratic legitimacy to a law of the ACA’s scale and scope that had been enacted against these long political odds. But the paucity of sincere references to democracy was disappointing. As was the seeming abandonment of pretense that the Court would rule apolitically. During the severability argument, Justice Breyer offered sound advice on that point, which one can only hope the Court will take to heart. “I would say stay out of politics,” he counseled, “That’s for Congress; not us.”
Editor’s note: For more on the severability oral arguments, see additional Health Affairs Blog posts by Timothy Jost, Wendy Mariner, and Alice Noble and Mary Ann Chirba. For more on the Medicaid coercion oral arguments, see additional Health Affairs Blog posts by Sara Rosenbaum and Timothy Jost.Email This Post Print This Post