Court Looks At Whether Mandate Can Separate From Rest Of Health Law

By Julie Rovner

Published March 28, 2012 at 9:23 AM CDT

If the Supreme Court rules that the health insurance mandate is unconstitutional, does that invalidate the rest of the law?

In its second-to-last argument over the Affordable Care Act, the Supreme Court on Wednesday ponders a what-if.

Specifically, if the justices decide that Congress exceeded its constitutional authority in enacting the part of the law that requires most Americans to either have health insurance starting in 2014 or pay a penalty, does that invalidate the rest of the law? And if not, how much, if any, of the rest of the law should it strike down?

The concept is called "severability." Often Congress includes severability clauses in the laws it passes — something to the effect of "if any part of this law should be declared void or unconstitutional" then "the remaining parts thereof shall be in no manner affected thereby but shall remain in full force and effect."

But in some cases, such as with the Affordable Care Act, Congress does not include severability language. In those cases, judges normally strike down only the offending parts of a law, leaving as much of the rest as possible.

That's what happened with one of the appeals courts that heard this lawsuit, in Atlanta. It struck down only the mandate, but the lower court judge actually said the entire law must be invalidated.

The Obama administration has argued a third position. It says if the mandate falls, so must two other positions that are "inextricably linked" to the requirement: Those are the provisions requiring insurance companies to sell to everyone, including those with pre-existing health conditions (a provision that enjoys widespread public support), and not charge higher premiums to those who are sick.

That's because the insurance industry says it will go broke if people can wait until they are sick to buy insurance.

"Eight states enacted various forms of guaranteed issue and community rating in the 1990s without covering everyone, and these reforms resulted in a rise in insurance premiums, a reduction of individual insurance enrollment and no significant decrease in the number of uninsured," said Karen Ignagni, president and CEO of the industry trade group America's Health Insurance Plans.