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Court appears split on future of health law if mandate is out

Questions focus on expanded care not cited in case

ALEX WONG/GETTY IMAGES

Supporters and opponents of the health care lawcontinued to demonstrate outside the Supreme Court on Wednesday.

WASHINGTON - A Supreme Court clearly divided over the constitutionality of President Obama’s health care law appeared split as well on Wednesday over whether parts of the law should stand if the court rejects its core mandate that nearly all Americans obtain insurance.

Hanging in the balance would be popular provisions of the Patient Protection and Affordable Care Act, such as guaranteed coverage for young people under their parents’ policies, relief for seniors’ prescription-drug costs - and the fate of the law’s expansion of Medicaid to 16 million low-income Americans.

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For Justice Elena Kagan, the question boiled down to “is half a loaf better than no loaf?’’

Paul Clement, a lawyer representing 26 states suing the federal government, argued that the entire law should go if the mandate falls. Congress, he said, should be granted a clean slate to fix the country’s burgeoning health care problems, which include skyrocketing costs and tens of millions of uninsured.

For Clement and those opposed to the law, there are instances in which half a loaf is worse.

“I would think you’re going to have to take the bitter with the sweet,’’ Clement said. If Congress’s goal in passing the 2010 reform was to provide patient protection and affordable care, as its title suggests, then, “I don’t think it works to just take the things that save money and cut out the things that are going to make premiums more expensive.’’

Deputy Solicitor General Edwin Kneedler, representing the government, argued that the law’s key provisions - barring insurance companies from discriminating against patients with preexisting medical conditions by not insuring them or charging them prohibitively high rates - could not work without the mandate and would have to be struck down if the court deems the mandate unconstitutional.

But, he said, the rest of the law - most of which has nothing to do with the mandate - should stand.

The 90-minute morning debate highlighted the uncertain future of Obama’s signature domestic achievement and how much could be at risk if the court finds that Congress overstepped its powers when it passed the law.

Everything from tax credits for small businesses for increasing subsidies for employees’ health insurance, to making chain restaurants disclose the calorie counts of standard menu items, has been put on the line - even though no challenges have been brought forth on these provisions’ constitutionality.

“There are so many things in this act that is unquestionably OK,’’ Justice Ruth Bader Ginsburg told Clement. “So why should we say it’s a choice between a wrecking operation, which is what you are requesting, or a salvage job? . . . The more conservative approach would be salvage rather than throwing out everything.’’

Clement said allowing certain provisions to stand - even if they appear unrelated to the mandate - would be akin to going down a rabbit hole, because everything is ultimately connected. The mandate ties directly to the heart of the law - to expand affordable health care for the financially needy and sickly.

That, he said, is interconnected to the health care exchanges, which connect to the tax credits, which ultimately are linked to Medicaid.

“If you follow that through what you end up with at the end of that process is just sort of a hollow shell,’’ Clement said. “You can’t possibly think that Congress would have passed that hollow shell without the heart of the act.’’

Chief Justice John Roberts Jr. disagreed, arguing that Congress would indeed have passed many of the provisions as a matter of course because many were simply routine reauthorizations of appropriations passed for the last decade.

Kneedler urged the justices not to trash the entire law if they find the mandate unconstitutional. Instead, he said, they should leave it up to Congress to decide what to do with any remaining portions - a prospect Justice Antonin Scalia said he found unrealistic given political realities.

“My approach would say if you take the heart out of the statute, the statute’s gone,’’ Scalia said.

While the Medicaid question has largely been overshadowed by the constitutionality of the individual mandate that was argued on Tuesday, the future of insurance coverage for millions of uninsured low-income Americans is at risk.

During Wednesday’s afternoon session - which focused on the Medicaid portion of the bill - several justices expressed skepticism that making states expand Medicaid coverage amounts to coercion, as the states suing the federal government argued.

Clement said the Medicaid expansion is unconstitutional because Congress ties federal funding for the program to the condition that states enroll millions of new individuals who did not previously qualify.

The federal government has said it will cover 100 percent of the states’ costs of coverage expansion starting in 2014, and gradually decrease the federal share to 90 percent by 2020.

“Why is a big gift from the federal government a matter of coercion?’’ Kagan asked, after interrupting Clement less than a minute into his opening argument. “The federal government is here saying, ‘We are giving you a boatload of money . . . for you to take and spend on poor people’s health care.’ It doesn’t sound coercive to me, I have to tell you.’’

States have no choice but to comply with the expansion because of the large amount of money at stake, Clement said. All previous federal money for Medicaid is at risk, not just money tied to the new program, he argued.

Justice Stephen Breyer challenged that, asking Clement to cite the statute that specifies that penalty. When he could not, Breyer himself dug out the statute and read it word for word, concluding that it would be up to the secretary of Health and Human Services to decide how much funding to cut. In Medicaid’s 47-year history, there has not been a single instance of the federal government withdrawing money from the program, he said.

Ginsburg pointed out that a number of states have filed briefs supporting the Medicaid expansion.

“You are saying that because you represent a sizable number of states, you can destroy this whole program, even though there may be as many states that want it, that don’t feel coerced, that think this is a good thing?’’ she said.

Currently only certain groups that meet certain poverty thresholds, including pregnant women, children, and the disabled, are covered by Medicaid.

The 2010 federal law would expand coverage to nearly everyone under 65 with household incomes at or below 133 percent of the federal poverty line.

“If this case goes through, you kind of wonder why the rest of the Medicaid program is constitutional?’’ said Kevin Outterson, a Boston University Law School professor who has filed several amicus briefs in support of the law. “If they ruled on Medicaid in a negative way, it would imperil a lot of other federal legislation that makes similar sorts of good deals.’’

Tracy Jan can be reached at tjan@globe.com.

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