If ObamaCare's Individual Mandate Goes, Then What?


As I noted yesterday, the authors of the recent health care overhaul legislation failed to include a severability clause in the text of the law. A severability clause is inserted into legislation in order to protect the bulk of the law should one provision be deemed unconstitutional. But as because the PPACA has no severability clause, a court—at least in theory—could take down the entire law if it decided that the mandate was unconstitutional.

As TPM's Brian Beutler notes, history suggests that in practice the Supreme Court may not be willing to take such action. When the Court ruled that the rules governing the Public Company Accounting Oversight Board set up by the Sarbanes Oxley accounting legislation was unconstitutional, it left the rest of the law in place—despite the lack of a severability clause. As Avik Roy explained earlier this year, the ruling in that case suggests that the Court "presumes severability unless non-severability is explicitly specified."

Yet it's worth noting that the Sarbanes Oxley case provides no explicit guarantee that a court wouldn't take down the entire health care law. And even if a court chose to let parts of the law stand, a ruling that the mandate is unconstitutional would likely mean that large portions of the law—those portions deemed sufficiently intertwined with or reliant upon the mandate—go down with it.

According to The Cato Institute's Ilya Shapiro, "the PCAOB [Sarbanes Oxley] case isn't any sort of legal precedent." So although it's suggestive of the way the court thinks about these issues, a court wouldn't necessarily have to follow its example. If a court decided to strike down the whole law, it could.

And even if it failed to take out the whole thing, major parts of law would surely go if the mandate is deemed unconstitutional. Shapiro explains that "if one provision of a large bill falls and there's no severability clause, then the court in effect goes into legislators' minds and tries to see what they wouldn't have passed without that provision being part of the package." Any parts that are too closely linked would be trimmed.

What might that include? The new regulations requiring insurance companies to sell to anyone regardless of preexisting conditions would be tops on the list, because the primary purpose of the mandate is to mitigate their negative effects. Indeed, the government has virtually assured that these provisions would be killed if there was a ruling against the mandate: A major part of the government's legal argument for the mandate is that the other provisions won't work without the requirement.

There would also be a strong argument that the generous insurance subsidies should go too; those subsidies were included largely to address an issue created by the mandate—what to do about those who cannot afford to buy insurance.

The provisions most likely to stand, I suspect, would be the Medicaid expansion and the creation of the health insurance exchanges, both of which could conceivably have been passed in the absence of the mandate. But even those aren't necessarily safe.

That's because there's also a strong argument that the entire law would have not have been passed without the mandate. As Shapiro tells me, passing the bill involved "a whole bunch of logrolling and finely balanced compromises." It was a package deal designed to attract maximum political support on what was sure to be a tough, politically dicey vote. So although some of the law's provisions are less explicitly dependent on the mandate, it's hard to imagine that Congress would have passed the other parts in its absence. In many ways, then, the law's passage was all or nothing. Hopefully, the Supreme Court will both rule that the mandate is unconstitutional and agree that none of the law would have passed without it.

NEXT: "More than anything else, this is one more government failure."

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  2. Jeez, our copier lease has a severability clause, as does the building mortgage, and virtually every other commercial contract I’ve seen in my career. How do these geniuses in
    Congress, many of whom are lawyers, leave it out???

    1. It’s easy when you never actually read what you’re signing.

      1. And when many of those “geniuses” are anything but, or so blinded by ideology that they act like idiots despite having lots of mental horsepower.

    2. They didn’t leave it out, they took it out. It was in earlier drafts.

      This wasn’t an accident, IMO. It was intentional, an attempt to insulate the law from Constitutional challenge by daring the courts to strike the whole thing.

        1. I think you give them too much credit. It was left out by stupidity.

          1. Could well be. When you’re dealing with the seemingly inexplicable actions of Congresscritters, “stupid” and “half-smart political calculation” can be hard to parse.

          2. I see absolutely no reason why among a few-hundred legislators you couldn’t find at least a few with the forethought to see that making something like this all-or-nothing for the courts as absolutely imperative. Because, I don’t think there has ever been any doubt that it would end up in court.

            Also, I think you may forget just how strategic and calculated proponents thinking had become on the issue by the time that all of the reconciliation maneuvers were being discussed and executed. Just go surf some old dkos pages from the time to be reminded of what I’m talking about.

            The odds of such an exclusion being intentional I therefore see as being quite good.

            1. OTOH, this is the Congress that forgot to name a bill earlier this year, and passed the “_______ Act of _____.”

          3. “”I think you give them too much credit. It was left out by stupidity.””

            I’m agreeing with RC. They did it for a reason, and they new the law would be dragged into court.

            Sometimes people think Congress is stupid, but how did they get elected? They clearly know how to play the public as stupid. Every election cycle proves that. Calling them stupid serves their ends. It makes people think they are not as crafty at serving themselves and screwing the public as they really are. They are talented in that respect.

      1. That was the first thing I thought when I saw the blogger’s mention of it. I couldn’t believe a Reason writer would be so naive as to discount that possibility in advance. The legislators went all in, hoping the judges would fold.

      2. Not only that, but there was really nothing for them to lose. If the mandate to buy goes, they know health insurance will self-destruct with the mandates on them — and much more quickly than some analysts may think. Therefore if the mandate to buy is struck down, the whole scheme goes down anyway.

    3. What a bunch of clowns.

  3. passing the bill involved “a whole bunch of logrolling and finely balanced compromises.”

    IOW, it’s a freakin’ house of cards.

    1. Compromises between whom?

      All of those on Team Red who voted for the bill and Team Blue?

      Uh, nevermind.

  4. Oh, so that’s what Pelosi meant by “We have to pass the bill to find out what’s in it”

  5. The idea that the Supreme Court may go digging through the “Patient Protection and Affordable Care Act” to decide how much of it Congress would have passed without the insurance mandate is laughable. Remember that not a single member of Congress read through it at the time, leading to Nancy Pelosi’s Kafkaesque statement that “we need to pass the bill so we can find out what’s in it.”

    (Aside: I wonder why no media, not even Fox or Reason, picked up at the time on what this implies: clearly, the bill was put together in some back room full of lawyers (if not smoke) and then handed whole to the people who introduced it in Congress. Whoever and wherever that happened, it MUST have violated existing laws about transparency. Why has this not been investigated and the principals prosecuted?)

    Also bear in mind that about half of what we think of as the ObamaCare plan, including some reporting and insurance requirements, are not part of PPACA but were sneaked in in the second stimulus bill. Thus, even if the Court strikes down all of PPACA it will not give us back the status quo ante. An explicit repeal bill will still be needed after Obama leaves office.

    1. I believe the second bill was an amendment to the first, so if the first goes in its entirety, it takes the second with it.

    2. “Aside: I wonder why no media, not even Fox or Reason, picked up at the time on what this implies: clearly, the bill was put together in some back room full of lawyers (if not smoke) and then handed whole to the people who introduced it in Congress.”

      So was the Patriot Act, although the lawyers in question worked for the DOJ. Our elected representatives don’t write laws, they just give them the thumbs up or thumbs down based on lobbying and poll reading.

  6. then the court in effect goes into legislators’ minds

    They had better leave a trail of breadcrumbs, or they’ll never find their way home.

    1. They’re more like to end up in the Gamma Quadrant with little hope of ever seeing Earth again.

      1. Sorry but Obama cancelled worm hole funding from FY 12 on.

  7. All this speculation assumes the Supreme Court will act on principle. Good luck with that.

    1. I would agree with Mainer on this.

  8. A bill crushed by its own bureaucratic weight. It would be just too good to be true.

  9. I think there’s an outside chance that a majority of the Court will want to send a message about passing stuff that’s totally random.

    1. Especially since they essentially passed a bill without even knowing what’s in it.

  10. They couldn’t include severability because they had to “buy” votes just to get it out of the senate. The various senators would not accept the severability clause because they knew their special clause would then be severed. It was meant as an all-or-none package by the senate and should be treated as such by the courts.

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