I wrote this yesterday, but am only getting around to posting it today.

The second half of today’s proceedings will consider whether the Affordable Care Act’s proposed Medicaid expansion is in violation of the federal-state partnership.

Medicaid, in case you don’t know is one of the world’s largest (if not THE largest) medical care programs. It serves more than 50 million Americans, and the number is steadily rising. It’s the single largest source of federal “grant” money received by states, and the Affordable Care Act will increase the amount by $454 billion this decade. States’ spending is expected to rise $20 billion in that time (some states may even spend twice that amount).

What the States are arguing:

With what they say are already bleak prospects for state budgets, the 26 states are making a simple plea to the Supreme Court: that they are facing financial ruin if they stay in the Medicaid program, and they have no way to back out of it and find their own way to pay for medical services for their neediest citizens.  Congress, this time, has clearly gone too far, they argue, in using its powers under the Constitution’s General Welfare Clause (also more popularly known as the Spending Clause, even though the word “spending” is not mentioned specifically).

“A judicially enforceable limit on Congress’s power to use federal tax dollars to coerce states is not just consistent with this Court’s precedent; it is a constitutional necessity,” the states’ lawyers have told the Court.  “And if the ACA’s expansion of Medicaid does not surpass that limit, then no Act of Congress ever will.” - Lyle Denniston, “Argument preview: Health care, Part IV”, SCOTUSblog.com, March 23, 2012

What the government has to say about that:

The federal government has answered that “states remain free to opt out of Medicaid if they so choose…The extension of Medicaid eligibility falls well within the bounds of Congress’s power to fix the terms on which it will appropriate federal funds….Congress has broad authority to attach conditions to federal spending in order to further federal policy objectives.” (ibid)

Ramifications of the decision

If the states were to succeed in having the Medicaid expansion struck down, government lawyers have told the Court, it would nullify not only the expansion aimed at protecting an additional 16 million poor Americans, but every other condition the government has imposed for those taking part in Medicaid, and the negative effect would spread to “an unspecified number of other federal spending programs whose terms grant recipients may find coercively generous.”

Variations of the word “coerce” appear in both of those dueling statements.  And that is because a coercion theory very likely is the only one that could give the challengers to the new Medicaid provisions a chance at succeeding.   It is noteworthy, and this may be to the federal government’s advantage, that the Supreme Court — though it has acknowledged that the theory does exist — has never once used it to strike down a federal spending law.  And, further, not one of the federal courts that have ruled on the ACA’s Medicaid expansion has struck it down, with none agreeing that it was vulnerable under the coercion argument. (ibid)

Reflections on the Arguments

One very plausible middle ground outcome would be to say that there are some limits on the federal government’s ability to revoke all Medicaid funds in response to a state’s decision just to refuse the expansion. What those limits are would be left for another case. But I don’t see the Court going further than that. The Chief repeatedly suggested that maybe the states gave up this aspect of the sovereignty by accepting federal funds. The SG closed with an argument that the health care statute as a whole including the mandate was essential to the public receiving the “blessings of liberty” because health care is so important. All the usual caveats apply about how you cant be sure from an argument. – Tom Goldstein, “The Medicaid argument…”, SCOTUSblog.com, March 28, 2012

The audio and transcript are available from SCOTUS.

The health care proceedings continue today, with the third and last day of oral arguments. The day’s proceedings will be divided into two sessions (morning and afternoon), and I’ll post separate posts on each portion. (A good, brief article covering the day’s proceedings in plain English, can be found in the Washington Post today: “On health-care hearing’s last day…)

This morning, the arguments focus around a rare issue called severability. Severability is basically a giant hypothetical; it basically asks the Court to consider “what if.” What if there were no mandate in the Affordable Care Act; would it then be constitutional? The Court almost never considers such things in making decisions, however, out of respect to Congress—and, I would guess, because of the monumental nature of this case—they will do so today.

…seldom does the Court explore a hypothetical that pretends that the Court has made a ruling, when it hasn’t yet.   That is what the Court will be doing on Wednesday when it confronts a truly strange phenomenon in constitutional law: a court trying to guess, in an informed way, what Congress would have wanted in a federal law if it could not have all that it actually put into the law.   It is called the “severability” issue, and that is what the Justices will be examining next Wednesday morning in the Affordable Care Act case.

The theory behind “severability” is one of judicial restraint: out of respect for Congress and its constitutional role as the country’s national legislator, a court that finds it must strike down something Congress has enacted is supposed to nullify no more of that law than is really necessary…

It is at least a theoretical possibility that, if the Court were to rule that the new law’s individual mandate is unconstitutional, the entire ACA will be erased from the statute books.   That is what makes Wednesday morning’s argument a crucial one.  Although the Court will not yet have issued any ruling on the individual mandate’s validity, it will go to the bench Wednesday acting as if it had, as if the mandate were no more.  The only way to have avoided that hearing was for the Court to have upheld the mandate and, of course, that will not have happened by Wednesday morning — just one day after the Court reviewed the mandate itself. -Lyle Denniston, “Argument Preview: Health care Part III”, SCOTUSblog.com, March 22, 2012

One thing to note is that severability can be a threat to checks and balances. There is a risk that the that Court basically ends up creating a law through their decisions—a law that may or may not have been something Congress was willing to consider. So all parties present will be treading carefully this morning.

…

Updates from Court bloggers show that the liberal members of the Court were very engaged during the arguments. Is that because they fear the mandate will be found unconstitutional, and they want to save the ACA if they can? It seems hard to get a reading from Kennedy; it looks like perhaps he would vote against the mandate, but thinks the law could stand without it. The more conservative members are showing clear skepticism. Scalia did ask if the Court was expected to go through the 2,700 pages of the act—and then said that would be in violation of the Eighth Amendment :). Gotta love that guy.

Lyle Denniston’s “Argument Recap” is a short post (just 4 paragraphs) that is well-worth the read. I can’t encourage you enough to check that out.

The audio and transcript from this morning’s arguments are available from SCOTUS.

Today is the longest day of oral arguments in U.S. Department of Health and Human Services v. Florida—2 hours!

The Proceedings: The Solicitor General (Donald B. Verrilli, Jr.) will begin by defending the Affordable Care Act and its provisions (particularly the mandate) for one hour. The second hour will be given to the challengers of the new law; the time will be equally split between Paul D. Clement, who represents the 26 states, and Michael D. Carvin, who represents the National Federation of Independent Business (NIB) and four individuals who are NIB members.

The Background:

After decades of trying, without success, to find a way to expand health care coverage and get control of rising treatment costs, a Democratic-controlled Congress in 2010 passed the Patient Protection and Affordable Care Act — with only Democrats voting for it.  The massive new law was controversial at every step of its passage, and remains so two years after President Obama signed it on March 23, 2010.  Without the votes to enact some version of a government-run ”public option,” Congress turned instead to an overhaul of the entire nationwide market for health insurance.  A basic issue, as always, was how to pay for such an ambitious social venture — and to do so without pushing insurance premiums so high that only the wealthiest could afford to insure.  At the heart of the approach that Congress selected is the new law’s Section 1501 (now codified as Section 5000A): popularly, it is known as the “individual mandate”; technically, it is labeled the “minimum coverage provision.”   It would require most Americans to obtain health insurance by January 1, 2014, or pay a financial penalty — perhaps as high as $3,000 — with their tax return.  On Tuesday, the Court will explore whether the Constitution gave Congress the power to impose such a “mandate.” -Lyle Denniston, “Argument preview: Health care, Part II…”, SCOUTUSblog.com, March 27, 2012

The Issue at stake: The government claims that the Affordable Care Act is well-within their rights to legislate. It falls under the Commerce Clause, which traditionally the government has had extensive rights to govern. Furthermore, it contends that nearly all people will eventually need healthcare of some sort, and this just jump-starts the process. By enacting this law, the government is able to regulate insurance companies, compelling them to provide care for those who may not previously have been eligible.

The states challenge that stipulation, claiming that the Commerce Clause does not apply; Congress is not regulating current commerce; it is compelling people to engage in new commerce. Furthermore, these people may not choose to engage in this commerce; for the first time, the government is mandating that private citizens buy particular goods. The states contend that this constitutes an infringement upon Americans’ personal liberties.

The New York Times best captures the heart of today’s arguments when it says that the decision “depends in large part on how the justices decide to frame the core issue” (Adam Liptak, “Health Ruling Hinges on How Justices Frame the Core Issue”, New York Times, March 27, 2012).

The law’s challengers — 26 states led by Florida, the National Federation of Independent Business and several individuals — present the central question as one of individual liberty. May the federal government, they ask, compel individuals not engaged in commerce to buy a product, here health insurance, from private companies?

The Obama administration, by contrast, urges the court to answer a different question. May Congress decide, in fashioning a comprehensive response to a national crisis in the health care market, to regulate how people pay for the health care they will almost inevitably need? -Adam Liptak, (ibid)

The Bench: After the Solicitor General’s argument, Tom Goldstein from SCOTUSblog took a break to make a short update. He noted that it seems pretty clear that the 4 liberal members (Justices Ginsburg, Breyer, Sotomayor, Kagan) of the bench will decide in favor of the law. The states’ lawyer, Mr. Clement, made an excellent argument against the mandate, however. Justice Kennedy may not be the swing vote after all (in fact, the Wall Street Journal’s Law blog post today gives a super-brief play-by-play, and notes that, “Kennedy’s comment…leaves the government — and the Obama administration — a little worried.) Goldstein looks to Justice Alito for a possible swing. But it’s still anyone’s game. There is no clear fifth vote, and the conservative members seem skeptical.

I’ll update this post in a short while when the day’s proceedings conclude.

Free Bonus: David Brooks has addressed the fundamental issue of healthcare in his post today, “Step to the Center,” and I think it’s a fascinating middle-ground approach. Brooks, a Hamiltonian, suggests that we do need universal healthcare, but we don’t need centralized means of attaining it:

So, yes, let’s have another round in the debate about how centralized American government should be. Let’s watch liberals and conservatives duke it out. But remember there has always been a Hamiltonian alternative: centralize the goals, but decentralize the means people take to get there. Universal coverage is a worthy goal. Decentralized competition is the way to make it affordable. -David Brooks (ibid)

UPDATE:

The audio and transcript are now available from SCOTUS.

An update from Goldstein’s post, “The Argument is Done,” on SCOTUSblog.com:

Towards the end of the argument the most important question was Justice Kennedy’s. After pressing the government with great questions Kennedy raised the possibility that the plaintiffs were right that the mandate was a unique effort to force people into commerce to subsidize health insurance but the insurance market may be unique enough to justify that unusual treatment. But he didn’t overtly embrace that. It will be close. Very close.

Lyle Denniston believes “It is Kennedy’s Call”:

If Justice Anthony M. Kennedy can locate a limiting principle in the federal government’s defense of the new individual health insurance mandate, or can think of one on his own, the mandate may well survive.  If he does, he may take Chief Justice John G. Roberts, Jr., along with him.  But if he does not, the mandate is gone.  That is where Tuesday’s argument wound up — with Kennedy, after first displaying a very deep skepticism, leaving the impression that he might yet be the mandate’s savior.

Monday’s oral arguments have concluded; the audio and transcript are now available from SCOTUS.

In summation, here’s what happened:

When Chief Justice John G. Roberts, Jr., commented at the end of Monday’s first day of hearings on the health care law, “We’ll continue argument on this case tomorrow,” it seemed to have a secondary meaning even if he did not intend it.   The comments and questions of the Justices during the 89-minute exchange left the distinct impression that they are prepared to rule on the constitutionality of the mandate that individuals must buy health insurance, and not push the issue off into the future.  The exact route they would take was a bit uncertain, but their skepticism about taking a pass now was clear.

That did not mean, of course, that the Court would ultimately uphold the mandate.  That is tomorow’s question, although the Justices asked many questions about the mandate, showing they are curious about its scope and meaning.  But an argument that at times seemed almost to bog down in the dense complexity of the tax code pointed toward a refusal to bar the lawsuits that had challenged the mandate and had put its survival before the Court this week.  One of the telltale signs of that sentiment was that not one Justice, and no lawyer at the lectern, said that it would be premature and a contradiction of the Court’s tradition against deciding constitutional issues prematurely for the Court to rule promptly on the mandate’s validity. -Lyle Denniston, “Argument recap: Moving on to the mandate”, SCOTUSblog.com