The Eleventh Circuit’s 2-1 ruling holding the individual mandate unconstitutional, but severable from the remainder of the Affordable Care Act, should come as no surprise to close observers (or careful auditors) of the oral arguments in the case. In fact the ruling was portended by Judge Hull’s first question (if memory serves correctly), which was not about the constitutional merits, but about severability. In any event, here are some initial reactions:
(1) This decision makes Supreme Court review inevitable, most likely in this case.
(2) While most have speculated that the Supreme Court will decide the constitutionality of the individual mandate by the end of June 2012, this decision makes that timing prediction significantly more likely, almost a virtual certainty.
(3) The ruling has no implications for the jurisdictional obstacles facing Virginia in Virginia v. Sebelius. The Eleventh Circuit ruled that it did not need to decide whether the States were proper challengers to the individual mandate because at least one party — a private individual — did have standing.
(4) The ruling likely has very limited implications for the constitutional merits of the Fourth Circuit’s rulings in Liberty University v. Geithner or Virginia v. Sebelius. Given the tenor of oral argument in the Fourth Circuit, it is widely expected that the Fourth Circuit will rule against the constitutional challenge. The Fourth Circuit opinions will have the benefit of being able to address both the Sixth and Eleventh Circuits’ analyses, if the judges so choose.
(5) If the Eleventh Circuit’s ruling were to be affirmed by the Supreme Court, Congress would need to respond. The Eleventh Circuit’s severability analysis (which I believe reaches the right result) creates a terrible scenario for health insurers. The guaranteed issue and community ratings provisions remain, but the individual mandate is no longer operative to force healthy people into the insurance pool. Congress could legislate around this difficulty in a number of ways. The important practical point for present purposes, though, is that Congress would have to do something. Because the results of congressional action are so unpredictable, expect America’s Health Insurance Plans and the Chamber of Commerce (which filed an amicus curiae brief arguing for inseverability) to ratchet up pressure on the severability analysis. As AHIP made clear in its amicus curiae brief (filed in the Fourth Circuit), either (i) a decision upholding the individual mandate as constitution, or (ii) a decision holding the individual mandate unconstitutional and inseverable from the insurance-related provisions, would be preferable to the Eleventh Circuit’s holding of unconstitutional but severable.