Day Three of Supreme Court ObamaCare Oral Argument: Severability and Medicaid

Today, March 28, 2012, is the final day of Supreme Court oral argument on ObamaCare. Today the Court will consider two issues: (1) whether the individual mandate (requiring Americans to buy health insurance from private companies for the rest of their lives or pay annual penalties) is severable from the rest of ObamaCare and, if not, whether the Court should invalidate the entire law; and (2) whether the Medicaid expansion is constitutional.

The Court will devote one and one-half hours of oral argument to the severability issue during its morning session and one hour of oral argument to the Medicaid issue during its afternoon session.

Severability

The individual mandate is the lynchpin of ObamaCare. The federal government has conceded in court that the individual mandate is the essential component of ObamaCare's regulation of the health insurance and health care markets. Congress clearly would not have passed ObamaCare without the individual mandate. Thus, once the Court determines that the individual mandate is unconstitutional, as it should, the Court should not sever the mandate from ObamaCare. Absent the individual mandate, the remaining provisions of ObamaCare cannot function properly, and the Court should invalidate all of ObamaCare.

The American Center for Law & Justice ("ACLJ") filed an amicus brief on the severability issue on behalf of itself, 117 Members of the United States Congress, and more than 103,000 supporters of the ACLJ's efforts to overturn ObamaCare. You can access that brief here.

Medicaid

Medicaid is supposed to be a cooperative program between the federal and State governments to pay medical and health-related expenses for low-income individuals. Traditionally, State governments have had flexibility on how to administer their programs, which they themselves manage.

Through ObamaCare, the federal government has reorganized Medicaid to compel States to add millions of additional people to their Medicaid roles, which will greatly increase the costs to each State.

Our Constitution embraces the concept of federalism and gives the federal government only limited, enumerated powers, while the rest of the powers are retained by the States and the people. Under our Constitution, the federal government lacks the power to directly require the States to comply with these new Medicaid requirements.

As such, in ObamaCare the federal government has used its spending power to indirectly require States to comply with the expansion of Medicaid. This indirect compulsion, however, is indirect in name only because the States have no choice but to comply. If any State refuses to accept the reorganization of Medicaid and the associated additional costs to that State, the federal government can withhold all federal Medicaid funding it provides to that State, thus putting the entire Medicaid financial burden on that State.

In 2009, the federal government provided States with more than $250 billion in Medicaid funding. It is obvious that the threat to withhold all Medicaid funding will force each State to comply with the new Medicaid requirements.

To paraphrase Don Corleone from The Godfather, the federal government has made the States an offer they cannot refuse.

The Court will consider whether the federal government is permitted to coerce the States in this way. In the final analysis, the Court should rule that the Medicaid expansion in ObamaCare is unconstitutional. If it does not, the Court will be allowing the federal government to use its spending power in a way that destroys the concept of federalism. The federal government will be able to use its spending power without limits, and the powers that belong to the States under our Constitution will be subverted.

The audiotape of the severability oral argument will be available this afternoon on the Supreme Court's website by 2:00 p.m. eastern time, and the audiotape of the Medicaid oral argument will be available today by 4:00 p.m. eastern time. You can access the Court's website here.

For more information about the options the Court has in resolving the ObamaCare case, read my previous post here.

3.28.2012 Update:

Regarding the severability issue, it is clear from today’s oral argument that the Justices understand that they have three options should a majority of them rule the individual mandate unconstitutional: (1) decide that the individual mandate is severable, which means the rest of ObamaCare would remain in effect; (2) decide that some, but not all, of ObamaCare must be invalidated along with the mandate; or (3) decide that the individual mandate is not severable and all of ObamaCare must be invalidated.

Regarding the Medicaid expansion issue, some of the Justices appeared concerned about where the line should be drawn to limit the federal government’s use of its spending power so that it does not become coercive to the point of violating the rights of the States.

This is an understandable concern. Under our Constitution, the federal government is only supposed to have limited, enumerated powers. The rest of the powers remain with the States and with the people. As the Ninth Amendment to the Constitution states: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” And, according to the Tenth Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” In our view, the Medicaid expansion, as with the individual mandate, exceeds the limits of federal power.