Wednesday, March 28, 2012

Day 3 Preview: Severability and Medicaid Expansion

Today is the last day of Supreme Court argument -- whew! This morning, the Court will hear argument on the issue of severability. If the Court strikes down the individual mandate, should it strike down the rest of the law, only some parts of the law, or can it strike down the individual mandate and leave the rest intact? This afternoon, the Court will hear argument on the Medicaid expansion. People up to 133% of federal poverty level (FPL) will be eligible for Medicaid, with the federal government paying 100% of that increase through 2016, decreasing to 90% after that. It's going to be a long day.

The government says that, if the mandate falls, so, too, must the requirement of coverage of people with pre-existing conditions and the provision that would have stopped insurers from considering health status when calculating premiums. The States and NFIB argue that, if the mandate falls, the whole law must go. The Court appointed a lawyer to argue a third position, that the mandate can fall without affecting any of the remainder of the law. A lot of the press felt that yesterday was very negative for the government on the individual mandate, so the severability question just got even more important than ever before. Indeed, for those of us with pre-existing conditions, this may well be the most important part of the case. The government was way wrong in conceding that we lose coverage of pre-existing conditions if we lose the mandate. They should have kept open the possibility that we could lose the mandate and still figure out a way to make the law work while covering people with pre-existing conditions.

The Medicaid expansion question came as a surprise to many of us, who did not think the Court would agree to hear this issue. The federal government has huge spending powers; the Court has never said the federal government was out of line in a spending powers case. Here, because the federal government is paying the cost of the Medicaid expansion through 2016, and most of the cost thereafter, it doesn't seem like a huge burden on the states. And Medicaid is optional; states can opt out if they like, at least theoretically. The states argue that, even if they only have to pay 10%, that's still millions of dollars, and as a practical matter, no state can really leave the Medicaid program since it covers thousands of poor people. If the Court were to rule that this expansion violates the Constitution, it could throw into doubt a whole host of federal laws that cost the states money.

As for yesterday's arguments, some believe the Court is split 5-4 down party lines, but a poll of Supreme Court lawyers and former clerks found only 35% of them predicting that the law will be overturned. Others are already arguing that the mandate can be struck down and the rest of the law can still work. But here's an account of a WaPo columnist who was in the room that pretty much agrees with my analysis that Justices Kennedy and Roberts seem stuck in the middle, asking tough questions on both sides. And here's an analysis written by my law school mentor, Mark Tushnet, now of Harvard Law School. He thinks Chief Justice Roberts was swinging in favor of the law. Still, there is concern that Justices Kennedy and Roberts might not be swayed. The Wall St. Journal offers five take-aways from yesterday, and they agree that Justices Kennedy and Roberts could be going either way. And here are Politico's five take-aways. If you're inclined to judge for yourself, the transcript is here.

And across the street with the protesters reside the ongoing lies about the law. Indeed, if there was one thing the Obama administration should have done differently is that it should have done a better job of selling the law. That might have made a difference in the Supreme Court.

I'll leave it there for now. Be back later with updates. Jennifer

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