If Mandate Goes, How Much Goes With It?
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The Fiscal Times
March 28, 2012

Justices on the Supreme Court who are leaning toward striking down President Obama’s signature health care mandate on its constitutionality stared into the abyss on the third and final day of historic oral arguments. If the mandate goes, what else goes with it?

For conservative jurists like Antonin Scalia, who openly sided with plaintiffs seeking to strike down the Affordable Care Act, the answer is simple. Without the mandate, the entire act crumbles and Congress has to start over.

But for most justices, especially the law’s staunchest defenders, the line is murky and deciding which sections of the law cannot be “severed” from an unconstitutional mandate would plunge the court into the messy business of legislating. Congress did not specify which sections of the law depended on the individual mandate, although it did call it “essential” to other insurance reforms like guaranteed issue, where people can’t be denied coverage based on previous health history, and community rating, where premiums cannot be determined by health status.

“Unless Congress tells us directly it is not severable, we should let them fix their own,” said Justice Sonia Sotomayor, an Obama appointee to the high court. “Why in a democracy structured like ours where each branch does different things, why should we involve the court in making a legislative judgment?”

Many economists, including architects of the Massachusetts and federal reform laws, say that failure to include a mandate that consumers buy coverage will encourage millions of healthy people, many of them young, to drop coverage since they would be able under the guaranteed issue rule to buy coverage in an emergency. That would cause rates to skyrocket, causing more people to drop coverage, and lead to a “death spiral” that would destroy the entire market.

The Obama administration essentially agrees with that position and pushed for a bill that satisfied the economic needs of the insurance industry. In arguing there was limited severability for the mandate, Assistant Solicitor General Edwin Kneedler repeatedly told the justices that the legislative language that the mandate was “essential” to the smooth functioning of the act only applied to a limited number of its other insurance regulations.

Yet conservatives on the court focused on the economic impact that a mandate-less reform would have on insurers. Justice Anthony Kennedy said, “It is the proper function of this court to impose that kind of risk. Can we say Congress intended to impose that kind of risk?”

That left it to court-appointed attorney H. Bartow Farr III to make the case that if the mandate was deemed unconstitutional, the rest of the law, including its insurance regulations and expansion, could stand. “Even without the mandate, those two provisions (community rating and guaranteed issue) will do good,” he told the court. “Even though the system wouldn’t work exactly as Congress wanted, it would certainly serve people who were unable to get coverage or get it at affordable prices.”

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.