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Right Change: SCOTUS DAY THREE: The Severability Clause


Wednesday marks day three of the Obamacare SCOTUS hearings, which are arguably the most important arguments the Justices will hear. Yesterday was the debate on whether it was constitutional for the government to mandate you to purchase something. That of course is a crucial question – but what happens after the ACA is found unconstitutional is what could potentially leave us with a nationalized healthcare system.

If you have some spare time and want a breakdown of the SCOTUS Obamacare hearings and their possible outcomes, visit this link. The Heritage Foundation did a fantastic job at putting all of the legal jargon into layman's terms. In particular, the issue that SCOTUS is deliberating today: the severability clause.

In law, severability refers to a portion of the law that states that if parts of the law are found illegal, the remainder of the law should still be upheld. In regards to Obamacare, critics argue that Obama and the Democrats failed to include a severability clause in the legislation. This means that if SCOTUS decides that Obamacare does NOT include a severability clause and the individual mandate is unconstitutional, the entire law has to be repealed.

Heritage gives us three different ways the Court to decide to rule on this issue of severability:

“Option 1:The Court decides to strike only the mandate from the law. But even the Obama administration has said that other insurance provisions—including those for pre-existing conditions and guaranteed issue requirements—must be invalidated for the insurance market to survive. In fact, Heritage scholars say many other Obamacare provisions would need to be struck down if the Court follows the government’s logic.

Americans would no longer face a penalty for not buying health insurance, but the insurance market would face severe upheaval if other components of Obamacare were left in place. This could result in insurers getting out of the market and Americans losing the plans they liked.  Using the Supreme Court’s test, this is surely not what Congress had in mind.

Option 2: The Supreme Court strikes the mandate and other “related” provisions in Obamacare. The problem is that there is no easy standard for the Court to use in order to determine which provisions are inseparable from the mandate. This puts the justices in the awkward position of determining which sections of Obamacare are so intertwined with the mandate that they must also be struck down.

Heritage scholars said the Court could find the following provisions non-severable:

Guaranteed issue;

Community rating requirements;

Prohibition on annual dollar limits of coverage;

Comprehensive coverage requirements;

Insurance premium tax (known as the “Cadillac tax”);

The Medicaid eligibility expansion for Americans who are 138-percent above the poverty level;

Medicaid and Medicare Disproportionate Share Hospital payments;

Limitations on cost sharing;

New health care coverage subsidies;

And the “Minimum Loss Ratio” requirement on health savings accounts.

Even if the Court strikes down the mandate and aforementioned insurance provisions, the insurance market is left with a hodge-podge of regulations that inhibit competition and consumer choice. Congress would have to act to rectify immediate impacts.

Option 3: The Court finds the mandate unconstitutional and that it is not severable from the law, so all of Obamacare is struck down.  Since the mandate is unconstitutional and the law implodes (in a way that Congress could not have intended) in its absence, the Court must strike down all of Obamacare.  Without the glue holding it together, the law falls apart.

The insurance provisions already in force would be struck down under this option, which Congress can easily reenact. But this process would provide lawmakers with an opportunity to create more patient-centered reforms that do not centralize health-care decision making in Washington.”

The only way to get rid of harmful effects of Obamcare, is for SCOTUS to choose Option 3. The ideal outcome for the Obama administration is Option 1. This would mean all of the provisions in Obamacare would remain and cause a slippery slope in the insurance market that has the potential to push us into a single-payer system."

Steven Den Beste at Hot Air argues that this is what Obama and the Democrats wanted all along:

“Single Payer is what they always wanted. The bill wasn’t originally written that way, though, because they knew that even with twin Democratic majorities, there was no chance of passing it. So they included the mandate instead.

If the mandate is struck down, then Congress will have to act. There won’t be any way to repeal the rest of the law because Obama will veto, and the Senate will sustain the veto. The only thing he will agree to is implementation of single payer.

That’s why the arguments yesterday and today were feeble: Obama wants to lose the first and second questions. Tomorrow’s argument is about severability, and that’s the one to watch.

And it’s going to be interesting, because Congress didn’t include a severability clause in the ACA, which is usually routine boilerplate. It was in there originally, but got removed before the law was passed. The Obama administration is going to argue that nonetheless it should be treated as if there was a severability clause, despite evidence of Congressional intent to the contrary.”

The Obama administration is going to argue that because they want to remind everyone of the “popular” portions of the bill like making it illegal for insurance companies to deny coverage for people with pre-existing conditions. Solicitor General Donald Verrilli has already argued the importance of the popular provisions in the healthcare bill.  That’s great, but it is not what SCOTUS is there to determine. What may be “good” for the public may not be “constitutional.” Hopefully the Justices will keep that in mind. It isn’t about what people argue is “good” for the country. The job of the Supreme Court of the United States is to uphold the constitution and to determine what is constitutional.

Obama argued it was “good” for America to put our troops in Libya, but that didn’t necessarily make it constitutional. What we need to do is scrap the entire law all together and allow Congress to start from scratch. If not, brace yourself for Britain’s healthcare system.

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