U.S. files brief with Supreme Court on severability issue

The severability of most of the provisions of the Patient Protection and Affordable Care Act (ACA) may not be considered, according to the Solicitor General’s brief on behalf of the U.S. government filed with the Supreme Court last week in response to two of the pending health reform cases, NFIB, et al. v. Sebelius and Florida, et al. v. HHS. If the Supreme Court reaches the severability question, it should hold that the ACA is severable from the minimum coverage provision except for the guaranteed-issue and community-rating provisions that take effect in 2014, the government argues.

Lower court proceedings. The Court of Appeals for the Eleventh Circuit upheld the district court’s ruling that the minimum coverage provision (i.e., individual mandate) exceeded Congress’ power under the Commerce Clause, but reversed the finding that the provision is not severable from the remainder of ACA, thus keeping the law’s other provisions intact. The court of appeals concluded that Congress would have enacted the guaranteed-issue and community-rating reforms without the minimum coverage provision. Thus, it invalidated only the minimum coverage provision.

The court of appeals did not address the government’s contention that petitioners lack standing to challenge the vast majority of the ACA’s provisions as inseverable.

Severability arguments not properly presented. The government contends the Supreme Court may not consider the petitioners’ severability arguments for several reasons. First, the Anti-Injunction Act bars pre-enforcement consideration of the validity of the tax collection provisions of the ACA. Second, the provisions that revise Medicare payment rates are subject to exclusive administrative and judicial review provisions, which may not be invoked by petitioners because those provisions do not directly affect them. Third, a holding that the minimum coverage provision is unconstitutional would not provide a basis for the Court to consider the validity of other provisions that do not apply to the petitioners.

“Whether viewed as a matter of Article III and prudential standing, a limitation on the scope of equitable relief, application of the principle that facial challenges are disfavored, or simply a matter of judicial restraint, the Court should not consider the validity of provisions of the Act that are not directed to petitioners but instead affect numerous parties not before the Court,” according to the brief.

ACA is severable from minimum coverage provision. The government argues that if the Court reaches the severability question, it should find that the rest of the ACA’s provisions are severable from the minimum coverage provision except for the guaranteed-issue and community-rating provisions that take effect in 2014. Without a minimum coverage provision, “the guaranteed-issue and community-rating provisions would drive up costs and reduce coverage, the opposite of Congress’s goals,” the brief states.

The government contends that, according to the Court’s own precedent, the “Court invalidates as inseverable no more of a statute than is strictly necessary.” As such, the Court must “limit the solution to problem” and “try not to nullify more of a legislature’s work than is necessary.” The Court must “retain those portions of the Act that are (1) constitutionally valid, (2) capable of functioning independently, and (3) consistent with Congress’ basic objectives in enacting the statute,” according to the brief.

ACA provisions are already in effect. To invalidate provisions as inseverable under these standards, the petitioners must demonstrate that it is “evident” Congress would have wanted the entire ACA to fall if the minimum coverage provision were invalidated. The government contends the petitioners have failed to do so for a variety of reasons. Foremost, many of the ACA’s provisions are already in effect, several years before the minimum coverage provision becomes effective in 2014. According to the government, this time lag shows that much of the Act operates independently of that provision.

“One need not speculate whether Congress would have wanted such provisions to operate in a world without the minimum coverage provision. We are in that world now,” the government writes.

Minimum coverage provision essential to other reforms. Lastly, the government argues the guaranteed-issue and community-rating provisions that take effect in 2014 are inseverable from the minimum coverage provision. Congress’s findings and the experience in the states support this argument, according to the brief. Congress expressly found that the minimum coverage provision is “essential” to the success of these provisions because it minimizes adverse selection, expands the health insurance risk pool and, thereby, lowers health insurance premiums.

In addition, Congress had empirical support for its conclusion that the minimum coverage provision is essential to make the other reforms effective. Some states had enacted guaranteed-issue and community-rating requirements without a minimum coverage provision. “The result in each state was a general destabilization of individual markets, increases in premiums, and declining enrollment,” according to the brief.