Whoops, We Forgot to Include A Severability Clause in a Law That Was Sure to Be Challenged in Court

So it turns out that the ongoing state-based legal challenges to ObamaCare might not be mere courtroom irritations, even before the Supreme Court get involved. Depending on how the rulings go, they could end up making implementation very, very difficult.

Here’s the issue: Judges in both Florida and Virginia have indicated that they may accept some of the key constitutional arguments against the law’s individual mandate, which requires everyone to purchase health insurance or pay a fine. As The New York Times reported over the holiday, if either of those judges eventually rules that the mandate is unconstitutional, then the judge will have to choose whether or not to let implementation of the rest of the law proceed:

Virginia’s attorney general, Kenneth T. Cuccinelli II, a Republican who filed the Richmond lawsuit, argues that if Judge Hudson rejects the insurance requirement he should instantly invalidate the entire act on a nationwide basis.

Mr. Cuccinelli and the plaintiffs in the Florida case, who include attorneys general or governors from 20 states, have emphasized that Congressional bill writers did not include a “severability clause” that would explicitly protect other parts of the sprawling law if certain provisions were struck down.

An earlier version of the legislation, which passed the House last November, included severability language. But that clause did not make it into the Senate version, which ultimately became law. A Democratic aide who helped write the bill characterized the omission as an oversight.

Without such language, the Supreme Court, through its prior rulings, essentially requires judges to try to determine whether Congress would have enacted the rest of a law without the unconstitutional provisions.

The first thing to note from this passage is that the severability clause was left out by mistake—despite the absolute certainty that the mandate would be challenged—indicating the haste with which the bill was cobbled together, and the overall sloppiness of its construction. The law we got was not a polished, considered piece of legislation. It was a rush job with a lot of glitches. As I’ve written before, in software terms, the legislation that passed was still in beta form.

The second point to make here is that it is very difficult to imagine that Congress would have passed the rest of the law without the mandate. For one thing, the mandate was the least popular part of the law throughout the debate, so based purely political calculus, if members of Congress could have left it out, they presumably would have. (It was so unpopular, in fact, that Obama ran against it during his campaign.) 

The mandate was also a key part of the bill’s construction, because, at least in theory, it mitigates the negative effects of two of the law’s biggest goodies—the provisions requiring insurers to sell insurance to anyone and to set premium rates without taking individual preexisting health conditions into account.

The problem with those provisions is that, if enacted by themselves, they set up a system in which many individuals have little incentive to maintain health insurance. So the healthiest people opt out, which causes insurance premiums to rise, which in turn causes more healthy people to opt out, and so on and so forth until pretty soon you have a very small pool of very sick people.

The idea behind the mandate is that you can prevent that sort of spiral by requiring everyone to purchase health insurance. Now, it’s not clear that the mandate will actually stop individuals from waiting until the last minute to purchase health insurance—for many folks, it may be cheaper to pay the fine. Regardless, though, the law certainly wouldn’t work the way it’s intended to work without a mandate, meaning that it would be something of a stretch, at best, to assert that Congress would have passed the rest of the law without it.

We don’t yet know how either of the judges will rule on the constitutional merits of the mandate—rulings are expected by the end of the year—so the point may ultimately be moot. But if either does decide that the mandate doesn’t pass constitutional muster, it will be quite difficult to make a compelling case that Congress would’ve passed the rest of the law anyway and that those other pieces should therefore continue to stand.

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  • ||

    I'm not so sure leaving the clause out was done inadvertantly. Its the kind of clause that is in every single fucking bill, and was actually in the early drafts.

    That means somebody had to actually take it out. I just think the odds are against that happening by accident.

    I wonder if some bright spark didn't take it out to try to insulate the bill against a challenge, betting that the courts might be willing to strike a clause or two, but wouldn't have the balls to toss the whole thing if that's what they had to do if they struck any of it.

  • ||

    Really? You're betting against stupidity on the part of Congress? This Congress?

    The one that passed the XXXXXX Act of XXXX earlier this year?

  • robc||

    The claim of a mistake, while probably true, is still bullshit. If you leave out severability, you chose explicitly to make the law all or nothing.

    The sloppiness excuse shouldnt even be considered. The courts should assume a higher level or professionality (call out to Scalia here) because no* law would ever be rushed through, there is no need.

    *well, maybe some emergency related law, but that doesnt apply here.

  • robc||

    higher level OF professionality.

    Unlike reason, congress has the ability to preview.

  • ||

    a system in which many individuals have little incentive to maintain health insurance. So the healthiest people opt out, which causes insurance premiums to rise, which in turn causes more healthy people to opt out, and so on and so forth until pretty soon you have a very small pool of very sick people.

    Isn't that pretty much how Insurance should work? (Keeping in mind that Health Insurance != Health Care)

  • prolefeed||

    That is totally NOT how any underwriter (which I used to be) wants insurance to "work" -- no underwriter wants a "death spiral" book of business, those tend to get disbanded tout suite if that's legally permitted.

  • Nope||

    Maybe that's how Insurance should work, but it's not how insurance should work.

    Insurance is about managing risk. By offering discounts to those who have less risk you provide an incentive for the healthier folks to buy insurance and for less healthy folks to work towards being healthier.

    It ends up being a pretty fair system, because everyone pays for the amount of risk management that they actually need at roughly the same price per 'unit' of risk. Plus, it has the added benefit of actually being sustainable.

  • BakedPenguin||

    What prolefeed said. The idea behind any insurance is that losses will be less than 80-85% of premium (assuming about 12.5% cost of business).

    Of course, every individual underwriter wants 0% loss on their books, but that never works out.

  • ||

    I'm not clear how health is actually insurable then, since the only way you can stay in the black is by betting on a majority of customers dying peacefully (and instantly) in their sleep.

    I guess 0%-loss would be theoretically possible with auto insurance or the like, but in any pool of people, a certain percentage is going to get cancer or need a few heart surgeries. We fail, then we die, and no amount of money or risk management can prevent that. Guaranteed loss kinda fucks up the whole risk/cost calculation.

    The whole idea that we can actually make it affordable for people to keep living despite the need for more and more resources to support that life, by getting everyone to pay in but hoping only a few actually need the services, seems pretty far-fetched to me.

    That Health Insurance would "death spiral" down to just the people who actually use the services makes sense. Hey, worried about getting cancer? Then I guess you're going to have to pay whatever it costs to treat the cancer. Don't get cancer before you die? Well, I guess you were just paying for piece of mind all those years. Pretty lucky for the people in your risk pool who did get cancer though.

    In the end, no amount of insurance magic can change the fact that living requires resources, and for people with serious health problems the amount of resources required can far exceed the amount they will ever produce in their lives.

  • BakedPenguin||

    Higher deductible insurance, for catastrophic coverage. This would mean that people pay for their yearly doctor's visits & checkups, as well as smaller procedures, drugs, etc. However, hospital stays and other major events would be covered.

  • ||

    Which all sounds great to me, but I'm not one of the assholes clamoring for "FREE SKRIMPS!!!!". How do you sell the "high deductible" to people who want "free" care?

  • LeSigh||

    How do you sell anything to people who want it free? You give it to people for free and then charge them extra for something else.

    I only see two types of people who believe things can be given away for free: idiots and thieves (with lots of overlap). Stupid people always fall for "it's free" even when they're paying more for it than they would otherwise. And who wants to do business with thieves?

  • ||

    Politicians...or am I being reduntant?

  • Wind Rider||

    I'm not so sure I'd bet the farm on the lack of a distinct severability clause bringing down the whole thing - seen some fairly extensive discussions on the legal blogs about this point, with numerous examples of pieces of legislation that omitted them surviving in reduced form after parts were deemed null and void. Read those some while back, so I can't offer a link, because I'm not sure exactly where I saw it - try the Volokh Conspiracy, since it was likely there.

    It does seem to be one possible outcome, if these suits are successful, which would be a good thing, but then I'm not a lawyer, nor do I play one on TV or the internet. . .

  • ||

    They left it out to play chicken with the judiciary. It remains to be seen if the judiciary has the stomach for the game.

  • 0x90||

    "As I’ve written before, in software terms, the legislation that passed was still in beta form."

    Except for the fact that software betas, in general, are strictly opt-in. Wouldn't that be something...

    Hello good Citizen! Sorry for emailing you directly, but we just wanted to bring you up to speed on the cool new legislation we've been working on. It's super awesome, and we'd love for you to take it for a test spin if you have the time. It might have some bugs, so if you don't like it, no problem, we've made it as easy as possible for you to roll it back. Just know that we are continually working to make things better, because we want to make sure that you never choose to take your business elsewhere!

    XOXOXO!!!!!1!

    Congress

  • Ebeneezer Scrooge||

    Except for the fact that software betas, in general, are strictly opt-in. Wouldn't that be something...

    Yer funny

  • Some Guy||

    Since striking the individual mandate while leaving the rest has a known outcome, it actually makes sense even from the mad scientists that wrote the law that it has to be all-or-nothing.

    Although in the long run, an insurance death spiral may leave behind a better system.

  • Ebeneezer Scrooge||

    Sure. Single payer, fully socialized medicine. Which will finish bankrupting the Fed before it's done, just in case nothing else hasn't done the job already (because on the front end at least the Feds will give away more free medicine than they can pay for).

    Then we can become Mexico's twin.

    It'll be great! Everybody goes to Mexico these days, on the longest vacations they can afford.

  • Some Guy||

    I'd like to think otherwise, but we're going to get all the drawbacks of single-payer, anyway. I'd rather save the cost of the middleman.

    So long as doctors are not required to use it, it'd be an improvement over what we're moving to.

  • ||

    Conspiracy theory: The Democrats realized their law was really shitty and the only way to pass anything was to bend it into something different from what they really wanted. So they decided they wanted the Supreme Court to strike it down, so now the Left can say "Look, people, we tried our best to give you free health care but the heartless, evil right-wing Supreme Court and their Big Insurance and Republican cronies destroyed our noble try. Vote for us and we'll do a better job next time."

    They win political points from the law without the having to be accountable for the POS reality of the law's implementation, and can blast the political motivations of a right wing Court, corporations and Republicans (who all collaborated as an evil cabal against the working class). Sounds like the best situation for the Democratic Party if you ask me...

  • Ebeneezer Scrooge||

    You have much more faith that the liberal intellect possesses a sane core than I ever will.

  • smartass sob||

    The problem with those provisions is that, if enacted by themselves, they set up a system in which many individuals have little incentive to maintain health insurance. So the healthiest people opt out, which causes insurance premiums to rise, which in turn causes more healthy people to opt out, and so on and so forth until pretty soon you have a very small pool of very sick people.

    Insurance may rise anyway. If everyone univerally has healthcare insurance, there will be greater demand for healthcare. More demand drives up the price of healthcare, given that there probably will be little increase in supply. Higher healthcare prices means ultimately higher insurance premiums.

  • Ebeneezer Scrooge||

    Depending on how the rulings go, they could end up making implementation very, very difficult.

    You really should stop yanking my chain. It's making me very angry and soon I'll have to dematerialize you.

  • ||

    I'm not so sure I'd bet the farm on the lack of a distinct severability clause bringing down the whole thing - seen some fairly extensive discussions on the legal blogs about this point, with numerous examples of pieces of legislation that omitted them surviving in reduced form after parts were deemed null and void.

    This just makes leaving out the severability clause on purpose a better bet for the Dems.

    On the one hand, the courts can strike down specific clauses and leave the rest intact, just like if the clause was in there. No loss for the Dems.

    On the other hand, the likelihood that striking anything brings down the whole thing still exists, acting as a deterrent to a court striking down anything. A plus for the Dems.

    Yeah, the law is junk and poorly crafted. But the junk is in the operational parts of the law. Nobody was frantically negotiating and drafting a severability clause at 2 am. Instead, somebody went out of their way to pull it out, figuring the lack of it would slow down a court thinking about striking parts of the law.

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