Policy Documents

Research & Commentary: Severability and Obamacare

Benjamin Domenech ā€“
August 26, 2010

Recent hearings in Virginia regarding the commonwealth’s case against the individual health insurance mandate in President Barack Obama’s health care reform raised important questions hinging on the issue of constitutional severability. If the Supreme Court rules the individual mandate unconstitutional, will it render the entire law unconstitutional, or just a portion of it?

One way for Congress to prevent the striking down of large pieces of legislation is to include a severability clause, an instruction that allows for portions of a law to be “severed” from the whole, preventing court rulings against aspects of a law from rendering the entire law unconstitutional.

During the legislative process, the House version of health care reform included a severability clause at several points, but that clause was not in the version the House passed. The Senate bill never included such a clause. Some Capitol Hill staffers maintain the lack of the clause was merely an accident or oversight that would have been corrected in a conference meeting, but because the bill was passed via the reconciliation process, that never occurred. In any case, the bill Obama signed did not have the clause.

Our research suggests the Virginia case against the individual mandate, if successful, will probably not result in the entire law being declared unconstitutional. A decision against the individual mandate, however, is likely to gut the new regime, rendering it unworkable in many key aspects. Congress would then be compelled to address the issue of health reform again.

The following articles offer information about severability and the Obamacare law.

Legal Severability and the Case Against Obamacarehttp://www.healthpolicy-news.org/article/28274Maureen Martin, senior fellow for legal affairs of The Heartland Institute, outlines the history of Supreme Court decisions on severability questions, showing that in this case, striking down the individual mandate could have more limited results: “On numerous occasions the Court has ‘severed’ an unconstitutional provision from legislation even though Congress omitted a severability clause. In 1996, for example, the Court held: ‘Although the 1992 Act contains no express ‘severability clause,’ we can find the Act’s ‘severability’ intention in its structure and purpose.’” Martin also spoke about her column and the legal issues in a podcast for Health Care News: http://www.healthpolicy-news.org/audio.html.

Virginia Ruling on Standing to Challenge Individual Mandatehttp://www.healthpolicy-news.org/article/28275Virginia Judge Henry Hudson rules the individual mandate is not a simple question, and one that deserves to be litigated: “No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce. Given the presence of some authority arguably supporting the theory underlying each side’s position, this Court cannot conclude at this time stage that the Complaint fails to state a cause of action.”

Thoughts on the Federal District Court Ruling Refusing to Dismiss the Virginia Health Care Lawsuithttp://volokh.com/2010/08/02/thoughts-on-the-federal-district-court-ruling-refusing-to-dismiss-the-virginia-health-care-lawsuit/Attorney Ilya Somin weighs in on the Virginia case: “Hudson’s ruling is a victory for Virginia and others who contend that the individual mandate is unconstitutional. It also makes it more difficult to argue that the state lawsuits against the mandate are merely political grandstanding with no basis in serious legal argument.” Somin previously wrote on Commerce Clause and taxation justifications for the individual mandate here: http://www.fed-soc.org/publications/pubid.1822/pub_detail.asp.

Obamacare and the Constitution: An Updatehttp://online.wsj.com/article/SB10001424052748703545604575407160833226350.htmlBetsy McCaughey, former lieutenant governor of New York, writes in The Wall Street Journal on the ramifications of the current legal challenge: “Most complex legislation states that if one part of the law is struck down, other parts remain enforceable. But authors of ObamaCare chose to omit that clause, suggesting that the health overhaul won’t work without mandatory insurance. The law’s defenders say the requirement that everyone purchase health insurance will solve a national problem by reducing the number of uninsured and spreading the cost of care over a larger insurance pool.” A similar view is espoused in this editorial in Investor’s Business Daily: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=534458.

Severability and Obamacarehttp://www.redstate.com/ben_domenech/2010/08/17/severability-and-obamacare/The Heartland Institute’s Benjamin Domenech contends the Court will ultimately give a narrower ruling because the vast majority of President Barack Obama’s legislation does not follow from the individual mandate, but such a ruling will have immense consequences anyway: “[T]he overwhelming portion of this legislation is not tied directly to the individual mandate. Yet even if the Court behaved in the same way when deciding the constitutionality of the individual mandate, in practical terms, judging the mandate unconstitutional would set off a domino effect throughout the insurance industry. The mandate is the only thing which made other anti-market regulatory demands (such as guaranteed issue and community rating) workable for the industry. Despite Howard Dean’s argument that the individual mandate is unimportant in the larger scheme of things, removing it and leaving other requirements intact would bring the entire insurance industry to the point of collapse.”

For further information on this subject, visit the Health Care News Web site at http://www.healthpolicy-news.org or The Heartland Institute’s Web site at http://www.heartland.org.

Nothing in this message is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. If you have any questions about this issue or the Health Care News Web site, contact Managing Editor Ben Domenech at 312/377-4000 or bdomenech@heartland.org.