2 Key Justices Indicate They Might Keep ACA Without Penalty

“Severability” was the key word as the U.S. Supreme Court heard oral arguments Tuesday on whether the Affordable Care Act is unconstitutional without the individual mandate penalty.

Meanwhile, two key U.S. Supreme Court justices indicated they are inclined to keep most of the Affordable Care Act intact even if the court strikes down the provision requiring people to have insurance.

Chief Justice John Roberts and Justice Brett Kavanaugh suggested they won’t vote to strike down the entire health care law if the individual mandate penalty section is ruled unconstitutional.

“I tend to agree with you that it’s a very straightforward case for severability under our precedents, meaning that we would excise the mandate and leave the rest of the act in place,” Kavanaugh said during arguments.

The Trump administration joined several Republican-led states in seeking to get the court to strike down Obamacare.

The ACA’s mandate that everyone have health insurance originally carried a tax penalty for noncompliance. A Republican-controlled Congress dropped that tax to zero in 2017, and opponents now say the whole ACA must be invalidated.

“I think it’s hard for you to argue that Congress intended the entire act to fall if the mandate were struck down when the same Congress that lowered the penalty to zero did not even try to repeal the rest of the act,” Roberts said.

Joel Ario, managing director of Manatt Health, told InsuranceNewsNet that if the court says the mandate is unconstitutional, “then the question becomes severability – whether the law can stand without the mandate.”

Ario said he believes the issue “is one of congressional intent, not a constitutional question.”

“What the congressional intent was in 2017, they took the mandate down but left the rest of the law intact. They did not throw out the entire law.”

Another issue is one of standing – whether the GOP-led states that brought the challenge have the legal standing to do it in the first place. Justice Clarence Thomas was among those who raised the issue of standing.

"I assume that in most places there is no penalty for wearing a face mask, or a mask, during Covid but there is some degree of opprobrium if one does not wear it in certain settings," Thomas asked California Solicitor General Michael Mongan. "What if someone violates that command, let's say it's in similar terms to the mandate here but no penalty, would they have standing to challenge the mandate to wear a mask?"

In addition, the case raises the issue of whether anyone is injured or the law is gutted by eliminating the tax penalty. Justice Samuel Alito alluded to the fact that the individual market has held up despite Congress' zeroing out the penalty.

"At the time of the first case, there was strong reason to believe that the individual mandate was like a part in an airplane that was essential to keep the plane flying, so that if that part was taken out the plane would crash," he said to Jeffrey Wall, acting solicitor general.

"But now the part has been taken out and the plane has not crashed," Alito added. "So if we were to decide this case the way you advocate, how would we explain why the individual mandate in its present form is essential to the operation of the act?"

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.