Some Modest Predictions on the Severability of the Individual Mandate

The Court’s decision on the severability of the individual mandate may be the aspect of the PPACA litigation that is most difficult to predict. If the Court holds that the individual mandate is constitutional, then severability won’t be an issue in the first place. If severability does arise, whether and how the Court will sever the mandate is unclear. In part, this is because of problems with severability doctrine itself. Notwithstanding over a century of cases on the issue, the Court has had a hard time settling upon a definitive severability test. Sometimes the emphasis has been on legislative intent. Other times the focus has been on whether the constitutional remainder can function without the invalid part. Still other times the Court has severed or refused to sever without acknowledging the doctrine at all. The oral argument on severability reflected this state of affairs, as the Justices spent a considerable amount of time exploring the merits of several possible tests. Without knowing the doctrine, it is difficult to anticipate a result.

In part, the unpredictability also reflects the absence of a completely satisfying way to sever the mandate if it is unconstitutional. Because the PPACA lacks a severability clause, covers such a diversity of topics, and reflects a variety of legislative compromises, it is hard to identify a clear legislative intent with respect to severability. Because the invalidation of the mandate will render certain aspects of the core health-care reforms financially problematic, it is unsatisfying to focus exclusively on the textual separability of the mandate from surrounding provisions. And because courts are poorly equipped to appreciate the complexities of health care policy, it seems problematic to base severability on anticipated financial implications.

That being said, I think we can reasonably make a couple of predictions about this aspect of the decision. First, if the Court holds that the individual mandate is not severable, that holding will rest on the votes of the conservative Justices, who generally seemed much more skeptical of severability than their counterparts during oral argument.

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The Individual Mandate: A Rejoinder

Last week, Ed Fallone posted his prepared remarks at our debate on the constitutionality of the individual mandate in the health care law. Inspired by his example, I have – after a fashion – cleaned up my notes for last week’s debate. This is how I see it.

When Nancy Pelosi was asked about the potential for a constitutional challenge to the health care law, her response was “you’ve got to be kidding.” The substance of her response – “look, we used the commerce power and that permits us to do almost whatever we want” – reflected large patches of conventional wisdom.

Many lawyers (particularly those trained before the Rehnquist Court began to push back against an unlimited commerce power) and, in particular, Progressive legal academics thought that this dragon had been slain long ago. They assumed that the idea that there might be structural limits on the federal constitution had been relegated to the status of flat earth creationism and alchemy.

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Why the Supreme Court Should Uphold the Individual Mandate

This afternoon, I participated in a debate with Rick Esenberg at the Marquette University Law School.  The debate was co-sponsored by the American Constitution Society and the Federalist Society.  I was asked to defend the constitutionality of the individual mandate imposed by the Affordable Care Act.  What follows are my prepared remarks.

Historians tell us that the connection between access to health insurance and employment was an accident. During World War II, wage and price controls prevented employers from increasing cash compensation for their workers. Employers wishing to recruit workers began to offer subsidized health insurance benefits as a way of avoiding this freeze on wages.

This is not a gift to workers from employers. We all pay for our health insurance with our labor. In return for our labor, we receive a combination of cash, employer provided benefits and non-cash prerequisites. The amount that employers pay towards our health insurance premiums is part of our income, which is why we are taxed on our employer-provided insurance above a certain level. The government encourages employers to offer health insurance benefits by allowing the employer to deduct these expenses as a business expense. About 60% of us receive health insurance through our employer.

The elderly and the disabled are not physically capable of working. Employer-based health insurance does not work for them. They receive their health insurance through Medicare. Participants pay certain deductibles and co-payments, but the bulk of the cost is imposed on the rest of us in the form of a payroll tax and the government then pays medical providers.

So our health insurance system has become tied to employment. As the costs of health care rise, it is increasingly difficult for middle and lower income Americans to afford health insurance unless they get it through an employer. This is because, as I mentioned, an employer will partially subsidize the cost of the premium as a component of total compensation. In addition, an employer can offer access to a plan that includes many other workers, thus broadening the risk pool and lowering the overall premium for each worker. An individual who seeks to purchase health insurance on their own gets neither of these two advantages. As health care costs continue to rise (an annual increase of about 8% in recent years), this cost differential becomes more significant.

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