Wednesday guide to the health-care case

From the Economist - Two issues for Wednesday:  First issue: "SEVERABILITY" Question: If the individual mandate falls, must the rest of the law fall too? The court will devote 90 minutes to this argument. Background: The mandate is the most prominent piece of Mr Obama’s health reform. However the law is gargantuan. Its 2,700 pages cover everything from calorie counts on menus to drug rebates for the elderly. Mr Obama’s argument: Should the mandate be overturned, only two other provisions should fall with it. The reform requires insurers to cover those with pre-existing conditions and bars them from hiking fees for the ill. Mr Obama’s lawyers concede that the mandate is necessary for these requirements to work—without the mandate, individuals would simply wait until they got sick to buy insurance. This would prove disastrous for insurers. However the rest of the law should stand. The states may not fight provisions of the health law that do not apply to them. Challengers’ argument: Health reform sought to achieve near universal health coverage without increasing the deficit. The mandate was the main way to do this, but the entire law served this goal. If the mandate falls, the entire law should fall, too. Court-appointed lawyer’s argument: The Supreme Court appointed an impartial lawyer, Bartow Farr, to argue that the rest of the law should remain if the mandate falls. Mr Farr contends that the provisions outside of the mandate are “perfectly lawful”. Congress would rather have the law without the mandate than no health law at all. Analysis: The insurance industry supported the law because of the mandate. The requirement that individuals buy insurance balanced the myriad, onerous rules on insurers. The Eleventh Circuit’s ruling was insurers’ worst nightmare. The appellate court struck down the mandate but upheld every other part of the law.
Second issue for Wednesday: MEDICAID Question: Is Congress’s expansion of Medicaid unduly coercive to the states? The court will hear one hour of arguments on this topic. Background: Medicaid provides health care to the poor. It is paid for by both the federal government and the states. However Washington foots most of the bill, providing 50% to 83% of funding for each state’s Medicaid programme. Beginning in 2014, the health law will expand Medicaid to childless adults with incomes of up to 138% of the federal poverty line. Mr Obama’s argument: This is not the first time that the federal government has expanded eligibility for Medicaid. The government may attach requirements to the aid that it provides. Strike down this expansion as coercive and other federal requirements would be similarly vulnerable. Besides, the federal government will pay for most of the expansion—100% in 2014, tapering to 90% by 2020. Challengers’ argument: The law’s expansion of Medicaid is unduly coercive. Technically, states could refuse the government’s new terms for Medicaid. But the federal government’s support for Medicaid is so large that refusing Washington’s help is impractical. States have no choice but to acquiesce to the government’s terms, even though they are strapped for cash. Analysis: No lower court sided with the states, making this challenge the least likely to succeed. However the Supreme Court surprised observers by agreeing to hear this issue in the first place, so another surprise may come in June.


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