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Health Reform In Supreme Court: End Of Affordable Care Act?

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WASHINGTON -- Having tackled, and perhaps terminated, the individual mandate on Tuesday, the Supreme Court will spend its third and final day of the health care reform cases testing the Affordable Care Act's broader fate.

The justices will begin the day considering how much of the sweeping health care reform law must fall, should they strike down the mandate. Congress often writes into legislation that invalidated provisions can be severed from the remainder of the statute. The section of the Affordable Care Act containing the individual mandate, however, has no such provision. Nevertheless, courts are reluctant to trash more parts of a law than they have to.

The U.S. Court of Appeals for the 11th Circuit, from which Wednesday's case arises, was one such court. It determined that the mandate could be severed from the remainder of the 2,400-page law, even if that means other provisions would not work as well. The district court, on the other hand, invalidated the entire Affordable Care Act, citing the lack of a severability clause and finding the mandate to be inexorably intertwined with the rest of the law.

The Obama administration split the difference in its briefs to the Supreme Court. Deputy Solicitor General Edwin Kneedler will tell the justices on Wednesday that the law's popular "guarantee issue" and "community rating" provisions cannot survive without the mandate that virtually all Americans must have health insurance. Guarantee issue prevents insurers from discriminating against people with pre-existing conditions and community rating standardizes insurance premiums for those living in the same area. The states that attempted to enact guarantee issue and community rating systems without instituting mandates saw their health care reforms fail.

Paul Clement, representing 26 states as well as the National Federation of Business and several individuals, will try to restore the district court's holding, which remains the most sweeping judgment against President Barack Obama's signature legislative achievement. Previewing the case last month, Clement's co-counsel Michael Carvin colorfully summed up their argument against the government: "Once you've ripped the heart and the lung out of the body, it doesn't matter that the fingers continue to actually move," Carvin said, referring to the mandate as well as the guarantee issue and community rating provisions. "What matters is if they can move in the way Congress intended."

Tuesday's argument, and the justices questions, seemed to favor the mandate's challengers. If that's the case, the Obama administration may regret its attempt to dissuade the justices from striking down the mandate by leaving them with a choice of upholding the rest of the health care reform law. Accordingly, the law's backers may end up silently rooting for H. Bartow Farr III, the Washington lawyer that the Supreme Court appointed to defend the 11th Circuit's decision. That is, unless the administration thinks a Supreme Court ruling in June that strikes down the law would galvanize the Democratic base in time for the general election.

After lunch today, the court will consider the 26 states' contention that Congress has unconstitutionally coerced their participation in the Affordable Care Act's expansion of Medicaid to people under 65. The justices' decision to take up this issue has raised eyebrows, because every lower court to consider the argument has rejected it.

Congress has the power under the Constitution's spending clause to place conditions on states that receive federal funds, and Congress may withhold those funds from states that fail to fulfill those conditions. That principle is not, on its face, at issue before the justices on Wednesday afternoon. Rather, the states argue that the Affordable Care Act's Medicaid expansion, which requires states to cover its citizens under 65 who fall below 133 percent of the poverty line, forces them to pay unaffordable costs or lose all Medicaid funding.

The burden seems less onerous, however, when one considers that the U.S. will pay for all of the costs for expanded coverage when the program launches in 2014, dropping to a still-generous 90 percent in 10 years' time. The government further notes that other Affordable Care Act provisions will save the states considerable money.

Additionally, the Obama Administration argues that the Medicaid statute gave every participating state the fair warning, required under the court's spending clause case law, that the conditions of federal funding are subject to change by Congress.

The issue may disappear if the court trashes all of the health care law. But a decision in favor of the states may nullify a massive part of the Affordable Care Act, and also affect a wide range of laws covering civil rights to education. And that could ultimately be a far greater blow to federal power than a decision declaring that Congress cannot mandate the purchase of a product on the private market.

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