Liberal Justices Rally to Defend Health-Care Law

By Kenneth Jost
Supreme Court Editor, CQ Press
      The Supreme Court ended three days of arguments on President Obama’s health-care reform on Wednesday as liberal justices worked aggressively to uphold most of the law even if its individual mandate is struck down.
      The four liberal justices sharply questioned the lawyer for the states and private parties challenging the law on whether the requirement to have health insurance or pay a penalty is so central that if it is held unconstitutional, the entire law must be struck down.
      In a second session held after a lunch break, liberal justices again vigorously challenged former solicitor general Paul Clement in his separate argument on behalf of the states that the act’s expansion of the joint state-federal Medicaid program is unconstitutional because it effectively coerces states into agreeing to the change.
      The combined three hours of courtroom arguments on Wednesday closed an extraordinary week that brought more attention to the Supreme Court than at any time since the Bush v. Gore election contest in November and December 2000. Demonstrators for and against the law massed on the sidewalk in front of the Supreme Court plaza each day. The court posted audio recordings of the arguments on its web site within hours after the close. And TV journalists raced to their positions as soon as arguments ended to provide instant accounts and analysis.
      In Tuesday’s session, the court’s five conservative justices signaled in their critical questioning of the administration’s lawyer, Solicitor General Donald Verrilli, that they could form a majority to strike down what opponents call the individual mandate and the administration labels the “minimum coverage.” Court watchers generally agreed that the administration’s hopes for upholding the provision depend on Chief Justice John G. Roberts Jr. and Justice Anthony M. Kennedy, who both asked some questions somewhat receptive to the administration’s case.
      On Wednesday, the court turned to the “what if” question of whether the entire law would fall with the individual mandate or if all, or almost all, of it could survive anyway. In the case that reached the court, the trial judge ruled the entire law invalid, but the federal appeals court in Atlanta disagreed and ruled the rest of the law could stand.
      At the Supreme Court, the government adopted an unusual position that two other parts of the law would fall if the individual mandate is struck down. Those provisions would require insurers to cover individuals despite pre-existing medical conditions – called “guaranteed issue” – and to charge premiums based on group instead of individual rates, the so-called “community rating” provision. With neither party arguing to save all the law except the individual mandate, the court appointed Washington attorney H. Bartow Farr III to advocate that position.
      Clement opened the argument Wednesday by stressing the government’s concession that the individual mandate was “essential” to the other two insurance-industry reforms. Without the mandate, Clement said, rates would “skyrocket” because guaranteed-issue and community-rating would “counteract Congress’s basic goal” of lowering overall health care costs.
      Liberal justices pointed to other provisions in the law aimed at controlling premiums, including the requirement to establish insurance exchanges for individuals without employer-provided coverage. But more generally they questioned Clement’s argument that Congress would not have wanted the rest of the act to stand without the individual mandate. “Is half a loaf better than no loaf?” Justice Elena Kagan asked.
      Many of the provisions are not controversial, Justice Ruth Bader Ginsburg noted. Why should Congress have to “start from scratch?” she asked.
      For the government, Deputy Solicitor General Edwin S. Kneedler opened by reiterating a brief defense of the individual mandate, but then attacked what he called Clement’s “sweeping proposition” to strike the entire law. Kneedler said the guaranteed-issue and community-rating provisions were tied to the mandate, but said the “huge” act had many other provisions “unrelated to market reform.”
      Some conservative justices, however — significantly including Kennedy — indicated concerns about carving out only a few parts of the law. “We would have a new regime that Congress did not provide for, did not consider,” Kennedy said.
      In his turn, Farr spent most of his time defending the two provisions the government was willing to jettison with the individual mandate. That argument, he said, was “an example of the best driving out the good.” Even without the mandate, Farr said, the insurance reforms would “open insurance markets” and “lower prices” for “millions of people.”
      Clement again went first in the afternoon since both lower courts had upheld the act’s expansion of Medicaid to cover individuals with incomes up to 133 percent of the federal poverty level. Medicaid, established in 1965 to provide health care to the needy, is administered by the states, but the federal government picks up most of the cost — varying state to state from 50 percent up to as much as 83 percent.
      The program has been expanded through the years both in the numbers of people eligible and in the benefits provided. The new law provides that the federal government will pay 100 percent of the cost of covering the newly eligible individuals through 2016, declining to 90 percent after 2020. Even so, 26 states, led by Florida, have challenged the provision as impermissibly coercive, contending they have no practical choice but to accept the new requirement because they could be penalized by the loss of all Medicaid funding.
      Clement got no further than to pose the question whether the provision was “coercive” before he was sharply attacked by Kagan. “Why is a big gift from the federal government coercive?” she asked, later describing the funds as “a boatload of federal money.” Other liberal justices, including Ginsburg, Stephen G. Breyer and Sonia Sotomayor joined later in questioning Clement’s position.
      For the administration, Verrilli drew sharp questions from conservative justices, including Roberts, Antonin Scalia and Samuel A. Alito Jr., who echoed Clement’s suggestion that states effectively had no choice but to take the money. “Can you conceive of a state saying no?” Scalia asked. “If you can’t, that sounds like coercion to me.”
      With the Medicaid argument running nearly half an hour over the scheduled time, the sessions over three days took nearly six-and-a-half hours altogether, longer arguments than any case since the mid-1960s. Roberts closed the session in unusual fashion by individually thanking each of the lawyers by name, including Farr and Robert A. Long, who had been appointed to argue a preliminary issue on Monday.
      As is the custom, Roberts gave no indication when the court will decide the cases, but court watchers expect it to be one of the final rulings in the term before the justices break for a summer recess at the end of June. The cases are National Federation of Independent Business v. Sebelius, Department of Health and Human Services v. Florida, and Florida v. Department of Health and Human Services, 11-393, -398, -400.