The US Supreme Court [official website] on Wednesday heard the final day of arguments on the constitutionality of the Patient Protection and Affordable Care Act (PPACA) [text; JURIST backgrounder] in the case of United States Department of Health and Human Services v. Florida [transcript; JURIST report]. In the morning the court heard arguments on the issue of whether the "individual mandate" can be severed [transcript, PDF] from the rest of the PPACA if the mandate is deemed unconstitutional. Washington attorney Paul Clement opened with arguments for the challengers, claiming that the individual mandate [text] is the heart of the statute and that, if you take it out, there is a chain of provisions that would no longer be workable with the goals of the legislation, and as such the court would have to strike down the entire PPACA. Clement argued for an "objective test" that would have the court determine whether the legislation can function the way Congress intended. He went on to claim that the text of the act and Congress' own findings state that the individual mandate is fundamental to key provisions essential to Congress' intended manner of operation. Clement also listed a chain of other provisions that would be fundamentally changed, such as the community rating and guarantee-issue provisions, which are essential to making the insurance exchanges work, which are essential to the tax credits, which are essential to policy prices on the exchanges, and so on. In the end Clement argued if the individual mandate is taken out, all that is left of the PPACA is a "hollowed-out shell" of what Congress passed, requiring the PPACA to be struck down in its entirety. Senior Deputy Solicitor General Ed Kneedler [National Law Journal report] argued for the government that the whole PPACA does not need to be struck down if the individual mandate alone is found to be unconstitutional. Kneedler agreed that the individual mandate is essential to the community rating and guaranteed-issue provisions, which should be struck down if the mandate is struck down. He argued, however, that the rest of the PPACA is severable from that package of provisions, and that the legislation can still accomplish Congress's goal of protecting patients. He argued that the aim of those other provisions was to reduce costs across the board, but that without them there are many other provisions, such as tax incentives for employers and an expansion of Medicaid, which still perform the function of increasing access to affordable care. Finally the court heard from court-appointed attorney H. Bartow Farr III [corporate profile], who argued on behalf of amicus parties that the individual mandate is severable from even the community rating and guaranteed-issue provisions, and that if the individual mandate is held to be unconstitutional, there is no need to strike down more than that one provision. He argued that the mandate was only one solution that was enacted to reduce costs of adverse selection resulting from the other provisions, and that those sections will still serve that purpose. Farr also argued that subsidies would be lowered because people will be able to opt out of the system altogether.
In the afternoon the court heard arguments on whether the expansion of the Medicaid program [transcript, PDF] under the PPACA amounts to unconstitutional coercion of the states by the federal government. Clement argued that the federal government's offering incentives for a state's voluntary participation in the act's Medicaid expansion is coercive and violates states' rights on federalism grounds. Clement claimed that this dolling out of Medicaid funds is different from previous distributions in that, unlike in previous situations, coverage of newly eligible individuals is not voluntary. He also asserted that, under the PPACA, the government will have the power to take away any funds it sees as reasonably related to a state's non-participation, and that this power could be abused to take away funds on which the state has relied in the past. Such a scenario would be unconstitutional because Congress cannot accomplish its goals by coercing states through its Article I spending power [Cornell LII backgrounder]. Clement also argued that the Medicaid expansion's tie to the non-voluntary individual mandate makes it coercive to states that would choose to not participate. Solicitor General Donald Verrilli again argued for the US, pointing out that the government has always had the power to amend the Medicaid program, something the states have always known. Verrilli further argued that the PPACA's new regulation does not amount to coercion, as the states would not lose more than is reasonably related to the new conditions of the health care law. He claimed that coercion is about "what you stand to lose rather than what you stand to gain"—a counter to Clement's argument that the extraordinary amount of funds offered, between 10 and 40 per cent of states' annual budgets, is one reason for why the Medicaid expansion is coercive. The Supreme Court will now discuss and make a final decision on the issue. In complicated cases, the court usually does not issue a decision until the end of its session in June.