Supreme Court justices on Tuesday during oral arguments appeared unlikely to strike down the Affordable Care Act in its entirety.
The full nine-member court heard extended oral arguments from four attorneys representing parties in California v. Texas, a case brought by GOP attorneys general and supported by the Trump administration challenging the entire ACA. The justices focused on issues including whether challengers had legal standing and whether the entire law would have to fall if the zeroed-out individual mandate were found unconstitutional.
The 5th U.S. Circuit Court of Appeals ruled that Congress' 2017 decision to zero out the individual mandate made it unconstitutional, but the court remanded severability questions.
The arguments have high stakes because the court's decision could destabilize the framework the healthcare industry has operated under for a decade. There's also a possibility that Congress will be divided between Democratic and Republican control next year, which would complicate any legislative response to the court's decision.
Many hospital and health insurance company stocks climbed on a day when share prices overall were mixed. Insurer Molina Healthcare rose more than 6%. Davita, Universal Health Services and Select Medical Holdings Corp. climbed more than 4%. But UnitedHealth Group was up just over 1% and Community Health Systems was close to flat.
Standing issues
Every justice asked questions about whether GOP-led states and individuals had standing to challenge the ACA, even though both lower courts determined that the challengers had standing.
Justice Clarence Thomas argued repeatedly that the court shouldn't consider issues of severability at this stage of litigation, which could give the court an avenue to rule on the case without immediately sorting out thorny severability issues.
"If the justices say there's no standing, the Supreme Court upholds the ACA in this case," Manatt, Phelps & Phillips Managing Director Joe Ario said.
The justices debated whether individuals could potentially be injured by complying or not complying with a zeroed-out individual mandate. Defenders of the law argued that individuals have a choice to purchase insurance, while challengers argued that the mandate is a command.
"Is someone who does not follow the mandate violating the law?" Chief Justice John Roberts asked.
Whether GOP-led states provided enough evidence that the zeroed-out individual mandate imposes a significant cost burden was also a point of discussion.
Ario noted that several justices questioned how the court would determine which provisions of the ACA supposedly harmed the challengers, and what the limits of such an approach could be. Roberts questioned whether the challengers in the case had standing to sue to take down the entire law.
"You're talking about almost 1,000 pages here and you're letting someone not injured by the provision he is challenging to roam around through those thousand pages and pick out whichever ones he wants to attack," Roberts said.
University of Minnesota health policy professor Lynn Blewett said the concerns expressed by Roberts and other justices spoke to the nature of the modern legislative process.
"With so much policy passed through omnibus or reconciliation bills, the situation where an individual could challenge all parts of a law could create chaos in our system," Blewett said.
Reading Roberts and Kavanaugh on severability
Roberts and Justice Brett Kavanaugh are considered the swing votes in California v. Texas. Both justices in their questions to Texas' solicitor general indicated they may be willing to sever a zeroed-out individual mandate from the rest of the law.
Roberts clearly stated his inclination toward the mandate's severability.
"I think it's hard for you to argue that Congress intended the entire act to fall if the mandate were struck down," Roberts told Texas Solicitor General Kyle Dawkins.
Roberts also expressed skepticism at Dawkins' characterization that legislative findings related to the ACA constituted an inseverability clause.
"It doesn't look like any severability clause anywhere else in the rest of the U.S. Code to me," Roberts said.
Kavanaugh commented that he may find a zeroed-out individual mandate unconstitutional because it does not raise revenue, but said the rest of the law seems to be severable.
"It does seem fairly clear that the proper remedy would be to sever the mandate and leave the rest of the act in place," Kavanaugh said.
Kavanaugh also batted down Dawkins' argument that the 2010 legislative findings constituted an inseverability clause.
"Congress knows how to write an inseverability clause, and that is not the language they chose here," Kavanaugh said.
Blewett said Kavanaugh and Roberts appeared fairly in sync on severability issues.
It's impossible to extrapolate how the court will decide based solely on the questioning, but legal experts say the intensity with which justices scrutinize legal issues during arguments offers clues. The Supreme Court is expected to rule in the case by June 2021.
