Written by: Samuel Sturgis
By now, everyone should be familiar with the Affordable Care Act. How could they not be? For years since its enactment, it has leapt from twitter feeds, news headlines, and scholarly articles like it was going out of style—and the truth is, it may be.
Many people claim to be experts on the Act, but surprisingly few know its history, and perhaps fewer still understand the razor’s edge upon which it currently stands. The debate surrounding the Affordable Care Act (ACA) is as vitriolic as it is complex, but an understanding of the current debate is surprisingly simple—at least on its face. It is an issue that hinges upon severability—a doctrine as overlooked as it is misunderstood.
To clear it up, we will first examine the litigation background of the individual mandate, explaining where it currently sits. Next, we will seek to understand exactly what traditional severability doctrine is and how a recent Supreme Court case has primed its analysis for the upcoming challenge. With that in mind, we will look at the current question facing the Court and briefly examine potential outcomes.
How About a Little Background?
In 2010 Congress enacted the Patient Protection and Affordable Care Act, referred to as the Affordable Care Act (“ACA”), with the goal of providing affordable healthcare to all Americans. Integral to that Act was the inclusion of what has commonly been called the individual mandate, which requires Americans to purchase and maintain minimum levels of health insurance. (King King v. Burwell, 135 S. Ct. 2480, 2485 (2015)). The provision has been the subject of much contention, and numerous lawsuits have been filed challenging its constitutionality. (See, e.g., Liberty University v. Geithner, 671 F.3d 391 (4th Cir. 2011); NFIB v. Sebelius, 567 U.S. 519 (2012)).
One of these challenges, NFIB v. Sebelius, 567 U.S. 519, 597 (2012), resulted in a holding by the United States Supreme Court that the mandate was too broad an exercise of power to be upheld within Congress’s traditional Commerce Clause authority. But the Act did not die there; the Court went on to uphold the mandate as a valid exercise of Congress’s authority to lay and collect taxes. This finding was based in large part, if not entirely, upon the provision’s ability to collect revenue—a justification which was shaky at best. (NFIB v. Sebelius, 567 U.S. 519, 573 (2012)).
In 2017, however, the Tax Cuts and Jobs Act (TCJA) eliminated the operative portions of the individual mandate by getting rid of the tax penalty. (Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, 131 Stat. 2054, 2092, §11081 (2017)). With the legs cut from underneath it, the mandate’s validity has again loomed large. Many argue that the elimination of the individual mandate’s capacity to generate revenue effectively makes the ACA unconstitutional. Indeed, Chief Justice Roberts’ opinion in NFIB appears to support this notion. Accordingly, Texas and seventeen other states have banded together to challenge the individual mandate’s constitutionality. California, along with fifteen other states and the District of Columbia, have intervened to defend it. (Texas v. United States, 945 F.3d 355 (5th Cir. 2019)).
The Fifth Circuit heard the case, finding that the individual mandate is unconstitutional but holding that it was severable from the rest of the act. Accordingly, though the mandate itself was deemed invalid, the rest of the ACA remained intact. This decision was appealed to the United States Supreme Court, where the individual mandate has managed once again to find itself in the spotlight.
Where Are We Now?
At this point, it is safe to assume that the individual mandate itself will be found unconstitutional—it can no longer be rationalized as a tax since it fails to collect revenue, and the Court has already made clear that it fails under the Commerce Clause. But assuming that the mandate is found unconstitutional, what then?
The real lynchpin is severability—whether the remainder of the ACA should be left on the books once the individual mandate has been torn out. On its face, this seems like a relatively simple inquiry. But a single look at the intricacies of the ACA reveals that the question is anything but straightforward. The answer will depend on how the current Supreme Court views severability doctrines.
But What Exactly Is Severability?
During its recently completed 2019 term, the Court decided a case that may shed some light on its current severability leanings. In Barr v. American Association of Political Consultants, Inc., 140 S. Ct. 2335 (2020), the Court was tasked with determining whether an amendment to the Telephone Consumer Protection Act (TCPA) was unconstitutional. The TCPA, in its original form, banned the majority of automated telemarketer calls. But twenty-four years later, the Obama Administration amended the ban to make an exception for calls made solely to collect government debt. Known as the “government debt exception clause,” this amendment was ultimately found unconstitutional, but the Court still had to decide whether the rest of the act would survive. (Political Consultants, Inc., 140 S. Ct. 2335 (2020)).
Though the case could have been decided by wading only a few steps into severability doctrine, Justice Kavanaugh’s majority opinion slogs fairly deep into its murk, underscoring a desire to clarify traditional principles should the topic arise again (a likely prospect). Generally speaking, Kavanaugh emphasized that a traditional severability approach involves two steps:
First, a court should look for Congress’s express intent by determining whether there is a severability or nonseverability clause. When Congress enacts a statute, it often dispels confusion by including a severability clause, which makes it clear that should a single provision of the act be found unconstitutional, the rest of the law will nonetheless remain on the books. Congress may convey the opposite intent by including a nonseverability clause—essentially dooming the entire law if one portion is held unconstitutional. According to Kavanaugh, the inclusion of such a clause makes the judicial inquiry straightforward. If Congress has made its intent clear, the Court should adhere to it. However, should Congress fail to include an express clause, courts are left with a difficult decision. (Political Consultants, Inc., 140 S. Ct. 2335 (2020)).
Traditionally, courts will attempt to “limit the solution to the problem, severing any problematic portions while leaving the remainder intact.” (Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 477, 508 (2010)). Essentially, in the absence of express Congressional intent to the contrary, the Court should presume severability and “refrain from invalidating more of the statute than is necessary.” (Reagan v. Time, Inc., 468 U.S. 641, 652-653 (1984)). This presumption has two main benefits: It helps the Court to “avoid judicial policymaking or de facto judicial legislation,” and it avoids issues of standing that could arise by allowing plaintiffs who have standing to challenge one provision of a law to thereby invalidate the law in its entirety. (Political Consultants, Inc., 140 S. Ct. at 2351). But the presumption toward severability is not without limits, and to decide whether an offending provision is ultimately severable from the rest of the act, a court must satisfy step two of traditional severability analysis.
To find a provision severable, the second step of severability analysis requires that a reviewing court satisfy itself that (1) the law is capable of functioning independently and (2) that Congress would have chosen to pass the law without the offending provision rather than to pass no law at all. (Alaska Airlines v. Brock, 480 U.S. 678 (1987)). It is this inquiry which forms the touchstone in the current dispute over the ACA.
Traditional Severability Applied—What Can We Expect?
Unlike the TCPA, the Affordable Care Act’s 2010 passage did not include a severability clause. Thus, in the absence of Congressional specificity, the Court should assume that Congress intended the mandate to be severable. But before that presumption is applied, the Court must satisfy step two of the analysis. The question, therefore, becomes (1) whether the ACA is capable of functioning independently of the individual mandate, and (2) whether Congress would have chosen to pass the law without the offending provision rather than to have passed no law at all.
It seems doubtful that either requirement will be met. For one thing, the ability of the ACA to function independently has already received significant criticism in NFIB, where Justice Ginsburg, in her partial concurrence, specifically emphasized the necessity of the individual mandate in keeping premiums low and workable. (NFIB v. Sebelius, 567 U.S. 519, 597-99 (2012) (noting that, of the seven states that have tried to implement similar systems of healthcare, Massachusetts alone had succeeded in keeping down premiums—and that only by implementing an individual mandate of its own)). If significant portions of the population are able to avoid purchasing insurance, then premiums are forced up as the pool of distributed risk becomes smaller and smaller. Not only does this call into question the effectiveness of the sans-mandate ACA, it undermines Congressional intent in the first place. The individual mandate is crucial to maintaining reasonably affordable premiums, so if the ACA cannot provide affordable insurance, would Congress ever have enacted it to begin with? Given the inextricability of the individual mandate, it seems highly unlikely.
So how will the Court decide? Will a single bad branch doom the entire tree? Even after Kavanaugh’s opinion in Political Consultants, it is hard to say, particularly in light of the vast and multifaceted nature of the underlying Act. My own guess at the outcome is nothing more than that—a guess. But perhaps now, when you sit down to lunch with your friends and feel a hot debate brewing over healthcare, you can, in one deft move, sidestep a landmine of unwanted opinions and impress your compatriots with your deep knowledge of the mystical doctrine of severability.
And when the Supreme Court finally does hand down their opinion, which they are expected to do before the Summer 2021 terms ends, who knows—it might even make sense.