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Wednesday: The Fight Over Federalism

Wednesday: The Fight Over Federalism

It’s the third and final day for the Affordable Care Act at the Supreme Court, and the topics of severability and Medicaid expansion take center stage.

The justices spent 90 minutes this morning listening to arguments on the issue of severability, which is the principle that determines the fate of the whole law should the individual mandate be struck down.  Let’s assume for a moment that the minimum coverage requirement is found to be unconstitutional. The Court must then decide whether the provision is severable or not severable from the rest of the law. That is, can other provisions in the ACA function independently, or is the individual mandate necessary for the proper execution of the whole law.

The federal government maintains that if the individual mandate is found to be unconstitutional, then two other provisions in the ACA must also be nullified: the guaranteed issue provision, which prohibits insurance companies from denying coverage to individuals with pre-existing conditions, and the community rating provision, which bars insurance companies from charging higher premiums to individuals based on their medical histories. The Administration argues that these two provisions require the individual mandate in order to achieve the law’s goals of making health coverage affordable and available to millions of Americans, while the other provisions, some of which have already taken effect, are unrelated to the individual mandate and should therefore remain effective.

The challengers, on the other hand, argue that the entire law should go down with the minimum coverage requirement because the law would not function as Congress intended without it.

The third position presented before the justices is that the mandate is completely severable (i.e. the mandate could be voided but no other part of the law would have to be struck down with it). Similar to Monday’s arguments, neither the plaintiffs nor the government holds this stance, so the Court appointed a third lawyer to argue that if the provision is struck down, it can be severed from the rest of the law without affecting the ACA overall.

Once severability has been addressed, the Court will devote one hour this afternoon to the issue of the Medicaid expansion. What is at play in here is federal authority versus state rights.

Medicaid is a program designed to provide health coverage to the poor, elderly and people with disabilities. A state may choose to participate (all states currently do), and the federal government will provide funding to the state as long as it meets certain federal standards, such as minimum eligibility and benefit requirements. The states have full authority in the design and implementation of their Medicaid programs, as long as those federal standards are met. The Affordable Care Act offers health care to more Americans in part by expanding Medicaid eligibility criteria to individuals and families at or below 133% of the federal poverty level, which will extend coverage to 16 million people.

The challengers contend that the federal government is unlawfully coercing the states into expanding their Medicaid programs by threatening to withhold the billions in funds they receive from the federal government should the states choose not to participate in the expansion. The federal government, on the other hand, claims that the Spending Clause of the Constitution allows it to attach conditions to the receipt of federal funds, in addition to its authority to amend the law establishing Medicaid, which it has done numerous times over the years.

We’ll see how this final issue of federalism plays out in the Court, but the week isn’t over yet! Keep checking RACblog for further analyses of the oral arguments, and don’t forget to visit our health care resource page for more information about this historic case and the law.

Published: 3/28/2012

Categories: Social Justice
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