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The Six Possible Supreme Court 'Obamacare' Outcomes

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The Court could find that -- whether as an exercise of commerce clause powers or taxing power -- Congress is within Constitutional limits to penalize uninsured people who fail to purchase coverage. If, as expected, they also uphold the Medicaid expansion, then the law stands. No change. The legal dispute over the law will have yielded nothing.

Strike The Mandate

If the Court determines that the mandate violates the Constitution, it can "sever" the mandate from the rest of the law. The rest of the law would stand, and implementation of it would continue. This outcome would leave it up to Congress and the states to deal with the "adverse selection" problem -- without a mandate, experts and industry insiders believe young and healthy people would avoid purchasing insurance until stricken by illness or injury, leaving older, sicker people in the risk pool. Premiums would spike and the market could ultimately collapse. Some experts doubt the policy would completely fail. But lawmakers would be under intense pressure from the insurance industry to forestall the potential calamity. Since the law's main provisions don't take effect until 2014, Congress could pass a slightly different, Constitutionally bulletproof version of the mandate, or some other incentive for everybody to purchase insurance. States could pass their own mandates, like the one in Massachusetts. But either way the health care reform saga would enter a new chapter.

Strike The Mandate And Coverage Guarantee

Though the Obama administration obviously wants the Court to uphold the mandate, it has argued that if the justices throw it out, they should also throw out the measures ending insurance company discrimination against people with pre-existing medical conditions. This would avoid the adverse selection problem, but it would also hollow out the law. Instead of creating a universal health care system, it would instead be a program that provided subsidies to uninsured people who were healthy and interested enough to seek insurance. Congress and the states could seek to reanimate the law, but they wouldn't be under as intense pressure from the insurance industry to do so.

Strike The Law

This is the doomsday scenario for the Obama administration. It would also be an intensely political move by the court's five conservative justices. Most big legislation includes what's known as a "severability clause," to protect the bulk of statutes should the Court rule individual measures or titles unconstitutional. Democrats neglected to include such a clause in the health care law. So the challengers have asked the Court to junk the whole thing if a majority of justices determine the mandate to be unconstitutional. Even if a law lacks a severability clause, judges typically presume severability, so it would be an astonishing move for the Court to void the entire act. But it's still possible.

Punt

An obscure old law prevents taxpayers from challenging the legality of taxes that haven't yet been assessed against them. During oral arguments this spring, the Court invited outside counsel to make the case that the challenge to the health care law is invalid, since the mandate, and the penalty for failing to comply with it, won't take effect until 2014. Justices seemed to dismiss this interpretation. But if they buy it, they could in theory put this entire controversy off for another year and a half.

Medicaid Rollback

Perhaps the most radical step the Court could take would be to void the law's requirement that state expand Medicaid to cover people up to 133 percent of the federal poverty line. Congress uses what's known as the spending power to entice states to enact policies they might not otherwise enact and that can't be forced upon them. Medicaid operates as a matching program: the federal government offers states a lot of money to provide health care to the poor, and in exchange, states are required to pony up the difference, and to meet certain requirements. Congress uses this form of enticement to expand and change myriad federal-state programs, and in the health care law, they essentially give states the choice to expand Medicaid dramatically or opt out of the program altogether. Challengers argue that this particular use of the spending power goes beyond enticement and constitutes unconstitutional extortion. Radical critics think the entire practice is a form of subterfuge -- a backdoor means of imposing national policy when Congress lacks the Constitutional power to enact legislation at the federal level. Though a majority of Justices appeared hostile to this argument, if the Court's five conservatives decide they agree with it, they will not only wipe out at least half of the law's coverage expansion. They'll also, at the very least, invite scores of challenges to other statutes -- from civil rights laws to transportation funding and beyond. An over-broad ruling would render scores of programs unconstitutional by fiat, or perhaps prevent Congress from ever changing the programs like this once first enacted. It would be monumentally disruptive and perhaps provoke a genuine constitutional crisis. For that reason, most experts believe this is the least likely of all possible outcomes.

About The Author

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Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com