VIRGINIA, SEVERANCE AND SECTION 1501: BRUCE KESLER
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Virginia, Severance & Section 1501
A major question is, what are the effects of the Virginia federal district court ruling that the individual mandate within ObamaCare (officially titled PPACA) is unconstitutional?
For now, and even if the Virginia ruling is eventually sustained by the US Supreme Court, the effects are relatively minor. The ruling took a conservative stance on severance, allowing the rest of the law to stand. The impact of the individual mandate on the other parts of the PPACA, although arguably substantial, is actually weak.
However, revealed are, once again, several of the serious failings of the PPACA, which if implemented can mean far higher insurance premiums and, perhaps, the implosion of the private insurance industry – and individual choice — in near the condition it is today.
The Ruling: Section 1501 of PPACA mandates that individuals purchase medical insurance or face penalties via the IRS. The Va federal judge finds this goes well beyond any previous extension of the Constitution by requiring a behavior that otherwise wouldn’t occur, commenting that the possible extensions of federal power would then be endless. Two other federal district courts did find this constitutional. Other challenges are in process of first hearing, most notably the one in Florida federal district court brought by 20 states and expected to get a favorable ruling, as well as appeals of preliminary judgments elsewhere. The Virginia judge did not grant an injunction on the individual mandate, as he expects the Supreme Court to deal with it before it becomes effective.
Severance: A severance clause in a law holds that if any part is found unlawful, the rest of the law will stand. This clause was removed from PPACA by its drafters. PPACA supporters and most lawyers didn’t think any of PPACA would be found unconstitutional. But, the Virginia judge took a conservative stance toward severance, “the time-honored rule to sever with circumspection…Accordingly, the Court will sever only Section 1501 and directly-dependent provisions which make specific reference to Section 1501.”
A pdf search of PPACA finds no other such key provisions. The Obama administration argued that many other provisions of PPACA are seriously impacted but although implicit in the crafting of PPACA such language is not in PPACA.
The Individual Mandate: By itself, and particularly because of its ramifications, the individual mandate is a major infringement upon individual freedoms. Unless the penalties for not buying insurance are significantly increased, however, the low penalties in PPACA are insufficient to impel buying before medical insurance is needed to pay for care. Thus, whether the mandate is upheld in future court actions or not, the provisions in PPACA that guarantee purchase regardless of prior medical conditions and that level premiums (community rating) across insureds will result in major increases in premiums for most. The expected result is that the private insurance industry will be unable to bear the financial burden and the government – all taxpayers — will become the insurer and risk-taker.
The major insurance companies supported the individual mandate, with the argument that otherwise the guarantee issue and premium leveling provisions would be ruinous unless the risk is wider-spread. However, as with their initial support of HillaryCare in 1993, they believe they will profit nonetheless as claims processors, passing the insurance risk on to taxpayers. From their standpoint, becoming profitable risk-free public utilities is a good thing, the rest of us be darned.
The Left’s Talking Points calls the Va ruling “amazing” and admits “A year ago, no one took seriously the idea that a federal health care mandate was unconstitutional.” At least, no one on the Left.
Remedies: Possibly, the US Supreme Court will also find the individual mandate unconstitutional. Next week, hearings begin in the Florida federal district court on the broader challenge brought by 20 states, beyond the individual mandate, that the Medicaid expansion and its cost burden on the states’ heavy deficits, which will reduce other public services, violates the 10th Amendment reserving to the states powers not enumerated in the Constitution. The Florida court may, as well, take a more literal reading on the explicit removal of the severance clause from PPACA, thus invalidating other related provisions, especially guarantee issue and leveling premiums across insureds.
Before that, the new Congress may act to repeal all of PPACA, which the President would veto. Or, some compromises may be found that would reduce the severe impacts of guarantee issue, leveling premiums, Medicaid, and other hot buttons.
Meanwhile, as ABC/Washington Post reports of its polling and Rasmussen of its, public support for PPACA continues to sink to new lows. The new Congress is aware, and President Obama may not be able to ignore that as more becomes known and public support continues to sink rather than rising as he and former House Speaker Pelosi predicted.
There’s plenty more at Memeorandum, but the key matters will be the findings of other courts, the Congress and President Obama – at least during his administration – finding common ways to reduce the negative impacts of PPACA, and the public keeping the pressure on.
You may want to revisit my lengthy analysis last March about other Top Ten Reasons For ObamaCare Are Based On False Information.
Posted by Bruce Kesler at 19:26
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