4:43 p.m. With their work complete, the justices can now begin their three-month summer break. Where are they headed? Blooomberg Law has a full report:

3:44 p.m. Republicans in states that sued to overturn the health care law now have a difficult choice, Bloomberg News reports:

If the states go along with an expansion of the Medicaid program, they get federal money that covers the bulk of the costs. In doing so, they would also have to embrace a portion of a law that they rejected as unconstitutional or too costly.

The law was designed to open the state-run program to an estimated 17 million low-income Americans by forcing states to reduce income limits for those who can qualify. The court modified the measure by saying the federal government can’t threaten to withhold existing money from states that don’t fully comply with the Medicaid expansion.

3:31 p.m. Bloomberg News’ Kate Andersen Brower has an inside look at how President Obama found out about today’s decisions:

According to an administration official who briefed reporters, Obama was standing in what is known as the “outer oval,” a small room outside the Oval office, and stood watching four cable news stations on a single split screen. At first he saw the erroneous reports that his signature legislative achievement was knocked down. According to another official. he had a “quizzical” look on his face but remained calm. CNN and Fox mistakenly initially reported the rule had been struck down.

Two minutes later, Obama’s White House counsel Kathryn Ruemmler walked into the outer oval, game him two thumbs up and told him it was upheld. White House Chief of Staff Jack Lew was also there.

Obama smiled and hugged Ruemmler — trusting her over the false reports.

3:15 p.m. The knives are coming out for Chief Justice John Roberts in the conservative precincts of the blogosphere, Marketwatch reports.

At web sites such as Redstate, Free Republic and National Review, many commentators accused Roberts of caving in to liberal pressure and being a traitor to the conservative cause. They worry he’ll turn into another David Souter, a Republican judge who became liberal after joining the high court.

3:12 p.m. NPR rounds up the reactions of legal scholars, which are best summarized by the phrase: “many people were stunned.”

3:01 p.m. Businessweek’s Paul Barrett, who covered John Roberts when Roberts was deputy solicitor general in the administration of George H.W. Bush, writes that the Roberts of today’s decision is the Roberts he knew back at the Department of Justice:

Roberts pushed the health overhaul back into the political arena: across the street to Congress and down Pennsylvania Avenue to the White House. He did lead the court in limiting the ACA’s extension of the Medicaid program for the poor by saying that the federal government can’t threaten to withhold existing money from states that don’t fully comply with federal rules. His conclusions about the limits of congressional authority under the Commerce Clause will make lawmakers think more carefully about exercising that muscle in the future. And he has pulled the court back to the periphery of what will be a heated clash between Obama and Romney over whether and how to extend insurance coverage to the tens of millions on Americans who currently lack it.

2:30 p.m. SCOTUSblog’s Tom Goldstein sees a ray of sunshine in today’s decision for conservatives. The court’s ruling on Medicaid eligibility may have given states rights advocates an opportunity to challenge other statutes, he says. The court found that Congress can’t take away all of a state’s federal Medicaid money if they do not comply with the health care law’s conditions. Tying compliance under one statute to the loss of other, unrelated money is a frequent technique Congress uses, Goldstein tells Bloomberg Law’s Spencer Mazyck. “The net, long-term historic effect may be, ironically, very pro states rights,” Goldstein says.

2:20 p.m. CNN’s Jeffrey Toobin attracted a lot of attention during the oral arguments when he said “This was a train wreck for the Obama Administration.”

But today he “announced apologetically on CNN that it was ‘a day for me to eat a bit of crow,’” Politico reports. “The same accountablity we demand of others we should demand of ourselves: I acknowledge that I got it wrong,” he said. “I was highly critical of Verrilli’s argument, and Verrilli’s argument won the case.”

2:14 p.m. A number of legislators — both Democrats and Republicans — also tweeted before they had a correct understanding of the court’s ruling. National Journal archived the tweets.

2:11 p.m. Both CNN and Fox News repeatedly botched their reporting of the court’s ruling, saying the individual mandate had been struck down. Politico has the video evidence.

2:03 p.m. In an online poll that has garnered more than 140,000 votes so far, MSNBC is finding a largely supportive public reaction to today’s ruling. Asked “Do you agree with this ruling?” respondents replied:

• 58%: Yes. Roberts provides a rational, nuanced decision in upholding the law.
• 38.6%: No. The reasoning in this decision is fractured and incorrect.
• 3.4%: I don’t know. I’ll have to read the whole decision, along with the concurring and dissenting decisions, before I decide myself.

1:44 p.m. Republican presidential candidate Mitt Romney said that the health care reform law the Supreme Court upheld is a “job killer ” he will repeal and replace.

1:39 p.m. President Obama said the country can’t afford to refight the political battles of two years ago:

1:21 p.m. After oral arguments, most experts were predicting the court would invalidate the individual mandate. But experts from Bloomberg Industries, Bloomberg Government and Bloomberg View all called the decision correctly in a program taped days after the March arguments. Bloomberg View’s Paula Dwyer went so far as to predict it would be a 5-4 decision, with Chief Justice Roberts writing the majority:

1:07 p.m. A look behind the scenes of President Obama’s East Room remarks on health care, from Bloomberg News’ Kate Andersen Brower:

Reporters were told not to bring any communications devices into the East Room.

Aside from cameras and TV producers only five reporters, who make up the so-called pool, were allowed in: Bloomberg, the AP, Reuters, AFP, and a rotating representative from a print outlet. Reporters sat on gold chairs approximately 25 feet from the podium where Obama spoke.

Administration officials sat on the opposite side of the room, including White House press secretary Jay Carney, Obama senior adviser Valerie Jarrett, Obama’s Chief of Staff Jack Lew, and HHS Secretary Kathleen Sebelius. At the end of the president’s remarks some of the officials patted each other on the back and smiled.

Normally when the president speaks at the White House reporters are standing and allowed to bring recorders, blackberries and cell phones. And occasionally shout a question. Today the president’s announcement was done in a setting akin to when he told the nation that Osama bin Laden was dead.

1:00 p.m. Those who were inside the courtroom this morning — including Bloomberg News’ Bill McQuillen — may think that Chief Justice Roberts pulled a bait-and-switch. McQuillen’s report:

Among the last people to know the U.S. Supreme Court upheld the core of President Barack Obama’s health-care overhaul may have been the actual spectators in the courtroom.

While the full opinion had been distributed outside the courtroom and journalists were reporting the decision, spectators — including retired Justice John Paul Stevens and two Republican opponents of the law, Senator Orrin Hatch of Utah and Representative Michele Bachmann of Minnesota — were inside, hanging on every word of Chief Justice John Roberts. For the first few minutes, the spectators, stripped of iPhones, BlackBerrys and other electronic devices, must have thought they were hearing Roberts throw out the law.

Roberts began by saying the requirement that individuals get health insurance was an unconstitutional expansion of the Commerce Clause. The law went too far in governing inactivity, he said.  U.S. Solicitor General Donald Verrilli, vilified in March for his arguments before the court, sat just feet away from Roberts as the chief justice said the government cannot compel citizens to buy health care.

For about ten minutes, Verrilli and the rest of the audience listened, until Roberts switched gears. Though Obama had gone to lengths to avoid calling the insurance requirement a tax, “it certainly looks like a tax,” Roberts said. He said Congress had the authority to impose the insurance requirement under its power to levy taxes, affirming the health-care law’s constitutionality.

Justice Elena Kagan, sitting at the far end of the bench at Roberts’s left, and Justice Sonia Sotomayor, at his far right, watched him read the opinion. The other justices looked straight ahead, with Samuel Alito drinking from a coffee cup and Clarence Thomas scooting his seat a foot behind everyone else and slouching in his chair.

12:48 p.m. From Bloomberg News reporter Anna Edney, opposing views of today’s decision from the crowd outside the court.

Barbara Tirrell identified herself as a Obama supporter and actress from New York City who is working at Arena Stage in Washington, DC:

Linda Dorr described herself as a Tea Party patriot from Laguna Beach, California:

12:35 p.m. Here’s how several leading online news sources are playing the health care story at midday:

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12:21 p.m. President Obama, speaking at the White House, said the decision was “a victory” for all Americas. The decision means all of the health care law’s “benefits and protections will continue,” he said.

12:10 p.m. Bloomberg TV producer Austen Williams reports things got a little dicey outside the court after the decisions were issued. There were  “lots of shoves and hard nudges between cameramen fighting for a spot to get close to lawmakers, as well as between Tea Party protesters and cameramen.” Williams, who took an elbow to the face, reports there were some colorful words exchanged in the scrum.

11:46 a.m. More from the dissent jointly authored by Justices Kennedy, Scalia, Thomas and Alito:

“If this provision “regulates” anything, it is the failure to maintain minimum essential coverage. One might argue that it regulates that failure by requiring it to be accompanied by payment of a penalty. But that failure — that abstention from commerce — is not “Commerce.” To be sure, purchasing insurance is ”Commerce”; but one does not regulate commerce that does not exist by compelling its existence.”

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“If all inactivity affecting commerce is commerce, commerce is everything.”

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“We never have classified as a tax an exaction imposed for violation of the law, and so too, we never have classified as a tax an exaction described in the legislation itself as a penalty . . . [And] we have never — never — treated as a tax an exaction which faces up to the critical difference betweena tax and a penalty, and explicitly denominates the exaction a ‘penalty.’”

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“And the nail in the coffin is that the mandate and penalty are located in Title I of the Act, its operative core, rather than where a tax would be found — in Title IX, containing the Act’s “Revenue Provisions.” In sum, “the terms of [the] act rende[r] it unavoidable,” Parsons v. Bedford, 3 Pet. 433, 448 (1830), that Congress imposed a regulatory penalty, not a tax.”

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“Whether federal spending legislation crosses the line from enticement to coercion is often difficult to determine, and courts should not conclude that legislation is unconstitutional on this ground unless the coercive nature of an offer is unmistakably clear. In this case, however, there can be no doubt. In structuring the ACA, Congress unambiguously signaled its belief that every State would have no real choice but to go along with the Medicaid Expansion. If the anticoercion rule does not apply in this case,then there is no such rule.”

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These decision excerpts, and those that preceded, came from Bloomberg Law analyst Rachael Krueger.

11:27 a.m. More from Justice Ginsburg’s opinion, which was joined in whole or in part by Justices Breyer, Kagan and Sotomayor:

“Rather than evaluating the constitutionality of the minimum coverage provision in the manner established by our precedents, the Chief Justice relies on a newly minted constitutional doctrine. The commerce power does not, the Chief Justice announces, permit Congress to “compe[l] individuals to become active in commerceby purchasing a product.” … The Chief Justice’s novel constraint on Congress’ commerce power gains no force from our precedent and for that reason alone warrants disapprobation.”

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“In sum, Congress passed the minimum coverage provision as a key component of the ACA to address an economic and social problem that has plagued the Nation for decades: the large number of U. S. residents who are unable or unwilling to obtain health insurance. Whatever one thinks of the policy decision Congress made, it was Congress’ prerogative to make it. Reviewed with appropriate deference, the minimum coverage provision, allied to the guaranteed-issue and community-rating prescriptions, should survive measurement under the Commerce and Necessary and Proper Clauses.”

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“A majority of the Court, however, buys the argument that prospective withholding of funds formerly available exceeds Congress’ spending power. Given that holding, I entirely agree with the Chief Justice as to the appropriate remedy. It is to bar the withholding found impermissible—not, as the joint dissenters would have it, to scrap the expansion altogether, see post, at 46–48. The dissenters’ view that the ACA must fall in its entirety is a radical departure from the Court’s normal course. When a constitutional infirmity mars a statute, the Court ordinarily removes the infirmity. It undertakes a salvage operation; it does not demolish the legislation.”

11:10 a.m. On the broccoli beat, Bloomberg Law’s Josh Block finds that the word was mentioned a dozen times in the court’s opinions. There were three mentions by Chief Justice Roberts, five by Justice Ginsburg and four in the dissenting opinion.

The most appetizing quotes are:

From Justice Ginsburg: As an example of the type of regulation he fears, the Chief Justice cites a Government mandate to purchase green vegetables. Ante, at 22–23. One could call this concern “the broccoli horrible.”

From the dissent: But those differences do not show that the failure to enter the health-insurance market, unlike the failure to buy cars and broccoli, is an activity that Congress can “regulate.” (Of course one day the failure of some of the public to purchase American cars may endanger the existence of domestic automobile manufacturers; or the failure of some to eat broccoli may be found to deprive them of a newly discovered cancer fighting chemical which only that food contains, producing health-care costs that are a burden on the rest of us — in which case, under the theory of Justice Ginsburg’s dissent, moving against those in activities will also come within the Federal Government’s unenumerated problem solving powers.)

[Emphasis ours]

11:09 a.m. More from Chief Justice Roberts’ majority opinion:

“The text of a statute can sometimes have more than one possible meaning. To take a familiar example, a law that reads “no vehicles in the park” might, or might not, ban bicycles in the park. And it is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so.”

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“Although the payment will raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods in order to foster the growth of domestic industry.”

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“Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance. See Congressional Budget Office, supra, at 71. We would expect Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.”

10:55 a.m. SCOTUSblog’s take on how the decision changes the fundamentals of constitutional law: “The rejection of the Commerce Clause and Nec. and Proper Clause should be understood as a major blow to Congress’s authority to pass social welfare laws. Using the tax code — especially in the current political environment — to promote social welfare is going to be a very chancy proposition.”

10:49 a.m. From the dissent jointly authored by Justices Kennedy, Scalia, Alito and Thomas: “If the industry does not respond by increasing premiums, it is not likely to survive. And if the industry does increase premiums, then there is a serious risk that its products — insurance plans — will become economically undesirable for many and prohibitively ex- pensive for the rest.

10:45 a.m. Justice Ginsburg, responding to Roberts’ view of the Commerce Clause power:

“The Chief Justice’s crabbed reading of the Commerce Clause harks back to the era in which the Court routinely thwarted Congress’ efforts to regulate the national economy in the interest of those who labor to sustain it.”

10:43 a.m. Chief Justice Roberts, in the court’s opinion, finding the Commerce Clause does not authorize the health care law:

“Just as the individual mandate cannot be sustained as a law regulating the substantial effects of the failure to purchase health insurance, neither can it be upheld as a “necessary and proper” component of the insurance reforms. The commerce power thus does not authorize the mandate.”

10:38 a.m. Here are the opinions in the health care cases.

10:34 a.m. Bloomberg News reports that the four justices in dissent wrote:  “The fragmentation of power produced by the structure of our government is central to liberty, and when we destroy it, we place liberty at peril.  Today’s decision should have vindicated, should have taught, this truth: instead, our judgment today has disregarded it.”

10:31 a.m. Bloomberg News’ initial story is online. Updates to come.

10:27 a.m. SCOTUSblog is reporting:

Justice Ginsburg makes clear that the vote is 5-4 on sustaining the mandate as a form of tax. Her opinion, for herself and Sotomayor, Breyer and Kagan, joins the key section of Roberts opinion on that point. She would go further and uphold the mandate under the Commerce Clause, which Roberts wouldn’t. Her opinion on Commerce does not control.

10:22 a.m. SCOTUSblog describes this as the “money quote” regarding the mandate:  “Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it”

The blog says the key passage about the expansion of Medicaid, also from Justice Roberts, is: “Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.”

10:20 a.m. Writing for the court, Chief Justice Roberts said “It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income but choose to go without health insurance.”

10:16 a.m. Scalia, Kennedy, Thomas, and Alito dissenting on the mandate, Retuers reports.Still no decision on the court’s website.

10:14 a.m. SCOTUSblog says “The bottom line: the entire ACA is upheld, with the exception that the federal government’s power to terminate states’ Medicaid funds is narrowly read.”

10:11 a.m. Chief Justice Roberts authored the court’s majority opinion, the Wall Street Journal reports. Bloomberg has the stocks to watch:
• Watch AGP, CNC, MOH
• Watch managed-care groups including AET, CI, UNH, WLP
• Decision removes “risk of worst case scenario,” stocks likely to gain, Credit Suisse’s Charles Boorady said in June 19 note
• Hospitals also rise; watch CYH, HCA, HMA LPNY, THC, UHS

10:09 a.m. Medicaid expansion is limited by the court, Bloomberg News reports.

10:08 a.m.  The individual mandate survives as a tax, reports SCOTUSblog.

10:07 a.m. The health care law has been upheld by the court, Bloomberg News reports.

10:06 a.m. Here’s the opinion in Alvarez.

10:05 a.m. In Alvarez, Kennedy authored the court’s opinion. Alito, Scalia, and Thomas dissent.

10:03 a.m. In United States v. Alvarez, the court has found that a federal law that makes it a crime to lie about receiving military medals or honors does violate the First Amendment’s guarantee of the right to free speech.

10:00 a.m. Reuters is reporting plenty of seats remain open in the courtroom. Interesting.

9:55 a.m. A take from Reuters and the NY Times from inside the press room, as we await the start of today’s session in five minutes:

9:50 a.m. Bloomberg News’ Supreme Court reporter Greg Storh has this inside look at what will be going on in the courtroom and the press room in just 10 minutes:

[The court] announces the opinions from the bench beginning at 10 a.m., Washington time. As soon as Chief Justice John Roberts says an opinion is about to be issued, court employees begin handing out copies to reporters [in the press room]. That means the first word of the health care decision will probably come from news reports. As with arguments, the court doesn’t permit video or live audio coverage of its opinion announcements. The court will post a copy of the decision on its website soon after it is issued.

The people in the courtroom may be among the last to know the outcome. The justice who wrote the opinion will give a summary — and may not say immediately what the bottom line is.

9:45 a.m. There are two other decisions the court is expected to hand down today (descriptions from SCOTUSblog):

United States v. Alvarez: Whether a federal law that makes it a crime to lie about receiving military medals or honors violates the First Amendment’s guarantee of the right to free speech.

First American Financial Corp. v. Edwards: Whether lawsuits under the Real Estate Settlement Procedures Act, which allows homebuyers to sue banks and title companies when they pay kickbacks for the closing of a mortgage loan, are constitutional if the kickback does not affect the price or quality of the services provided?

Those two rulings are expected to be handed down first, which would probably push back the announcement in the health care cases to between 10:10 and 10:20 a.m.

9:37 a.m. Bettors using the online prediction market Intrade – where individuals can bet on political events – are wagering the U.S. Supreme Court will vote to strike down the Obama health care reform law’s requirement that individuals purchase health insurance or pay a penalty.

There is a 66.6 percent chance the mandate will be invalidated, bettors are predicting, up considerably from the 36.9 percent chance prior to the case’s oral arguments.

9:30 a.m. If the individual mandate is struck, some have argued that without the influx of young, healthy Americans paying premiums that would serve to cover the costs of older, sicker Americans, health care for all won’t work. But there may be another way, Bloomberg Government suggests.

Its analysis found that requiring individuals to be enrolled automatically in their employers’ health insurance plans, but having the option to opt out of the plans, would generate $20 billion in new insurance revenue. And the auto enrollment may even be viewed as required by the existing law, the study found.

9:28 a.m. Health care provider stocks are performing better than those of medical plans, but that relative performance is likely to reverse once the health care cases are decided today, according to analysts at Jefferies & Co., Bloomberg News reports.

“Providers face a very tough road ahead,” the Jefferies analysts wrote in a report [Thursday]. They cited pressure from commercial health plans to limit costs, election “noise” from presidential and congressional candidates, and risks tied to Medicare rates and government finances.

Health-maintenance organizations and other payers have a more favorable outlook, the report said, because they stand to benefit from relatively low demand for medical care along with efforts to reduce expenses.

Here’s how the stocks of providers and payers have performed since oral arguments in late March:

9:13 a.m. If only the individual mandate is struck down, could that be the worst of all possible worlds for investors in health care stocks? ISI Group says yes, and Bloomberg TV’s Adam Johnson breaks it down:

8:58 a.m. If the court’s end-of-term rush to release its highest profile opinions leaves you a little breathless, you have good company. Harvard Law Professor Noah Feldman, writing June 17th on Bloomberg View, noted that the court had yet to issue its five most important decisions. Too many will be issued on the same day, resulting in some of them getting  buried in the media coverage, he said:

The court would have done the nation a service by stringing out these five decisions over the course of June, guaranteeing that each got the scrutiny it deserved. That it chose not to suggests the court may be a little worried about a world in which its approval rating stands at 44 percent and some three-quarters of respondents believe (correctly, I’d say) that a justice’s personal opinion matters in deciding important cases.

8:54 a.m. Reporting from in front of the court this morning, Bloomberg TV’s Megan Hughes notes that the decision will be as much a part of Chief Justice John Roberts’ legacy as that of President Obama:

8:49 a.m. The decision is more than an hour away, but the fundraising based on it has already begun, Mark Silva reports on Bloomberg’s Political Capital blog:

Whichever way the Supreme Court rules this morning on President Barack Obama’s Patient Protection and Affordable Care Act, the fundraising is underway.

“We don’t know what will happen this morning,” Obama campaign manger Jim Messina writes in an e-mail to supporters this morning. “But no matter what, today is an important day to have Barack Obama’s back.  If you’re with him, donate now — before this week’s critical fundraising deadline.”

8:46 a.m. Bloomberg BNA’s Tom Taylor reports there are belly dancers in front of the court. And he has the picture to prove it:

8:40 a.m. The smart money continues to bet that Justice Anthony Kennedy will be the court’s swing vote on health care. On June 14, Bloomberg News’ Greg Stohr reported that:

“Justice Kennedy is the axis around which the court spins in a case like this,” said Tom Goldstein, an appellate lawyer whose SCOTUSblog website, sponsored by Bloomberg Law, tracks the court. “On this closely divided court, someone inevitably has to be the center vote, and he is consistently it.”

For Kennedy, the answer may turn on whether he sees the law as too intrusive, particularly the requirement that Americans either get insurance or pay a penalty. The 75-year-old justice has long described individual freedom as his paramount constitutional value — whether the underlying issue is abortion, gay sex, detainee rights or federal power.

How will Kennedy swing? Clues may lurk in the questions he asked and the comments he made during oral arguments in March:

8:22 a.m. While most experts are predicting the court will invalidate the individual mandate, SCOTUS Blog founder and High Court litigator Tom Goldstein is predicting the mandate will be upheld. He writes on his blog, which is sponsored by Bloomberg Law:

In the end, based on the entire mix of information I have, I think the mandate will not be struck down tomorrow.  (I don’t have any inside information, nor does anyone else.)  My prediction includes the possibility that there will not be a single majority opinion for the theory on which the mandate is upheld, and even the thin possibility that the Court will not have a majority to find the mandate constitutional.

My level of confidence isn’t overwhelming, but it’s good enough to give a concrete prediction.  We’ll see.

The call can be seen as a savvy marketing move. If he’s right, he’ll be hailed by reporters as the court’s ultimate soothsayer. If he’s wrong, the prediction will probably be quickly forgotten. Either way, expect to see Goldstein all over the media and the blogosphere – including this blog – after the ruling comes down.

The blog, now in its 10^th year, has become the media darling of the health care cases. It’s been profiled in Forbes magazine, on NPR, and in the Washington Post, among many other outlets. And White House spokesman Jay Carney said the President would be holed up in the press secretary’s office this morning, getting his first reports of the decision from the blog and mainstream media. When journalists talk about alternative sources of the news, it’s operations like SCOTUSblog that point the way to what can be done on a comparatively small budget by experts/bloggers.

Goldstein has invested $25,000 in the blog’s technological infrastructure in recent weeks so it can handle the load of visitors this morning. They’ve got their fingers crossed on Twitter that it doesn’t crash:

8:09 a.m. A Bloomberg News survey of constitutional law professors at the nation’s top 12 law schools has found that 19 of 21 believe the court should uphold the individual mandate, requiring all Americans to buy health insurance or pay a penalty, but only eight of the professors believe the court will do so.  A wide majority — 15 of 21 — believe the court won’t toss the entire law, even if the mandate is struck down.

Striking the mandate could harm the court’s reputation as an impartial institution, the professors said:

Eighteen of the 21 professors said the court’s credibility will be damaged if the insurance requirement — which passed Congress without a single Republican vote — is ruled unconstitutional by a 5-4 majority of justices appointed by Republican presidents.

8:05 a.m. One thing we’ll learn this morning is what, if anything, broccoli has to do with the Obama health care reform law.

Opponents of the measure have famously suggested that if the federal government can force Americans to buy health insurance, they can force us to buy broccoli too. Justice Antonin Scalia picked up on the meme during oral arguments, asking the Obama administration’s lawyer Donald Verrilli, “Could you define the market — everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli.”

We’ve detailed Bloomberg Law analyst Josh Block to the broccoli beat. He’ll be combing through the opinions looking for references to the green vegetable. Check back after 10:00 a.m. for full broccoli coverage.

8:00 a.m. Bloomberg TV producer Judy Lyons reports about 150 people in the spectator line this morning, with more students and tourists, and fewer interested parties, that were in line for the March oral arguments.

7:45 a.m. The nation’s highest court will render its decision today, but the court of public opinion has already spoken about health care, the Christian Science Monitor reports. Americans recognize there are problems with the health care system, but remain deeply divided about the solutions, it says:

What’s clearest about public opinion may be this: In their concern about issues of access and rising costs, Americans don’t want Washington to do nothing. If the court strikes down the whole Affordable Care Act, fully 77 percent of Americans in the new AP/GfK poll said Congress should start on a new bill, not leave the health-care system as it is.

7:38 a.m. Here’s a wide shot of the media scrum in front of the court’s steps, from Instagram user Indianz:

7:30 a.m. To cut through the confusion of the initial minutes after a decision is issued, we’ll be looking for the answers to these four questions:

1. Is the court barred from deciding the case until 2014, when the penalty for not buying health insurance goes into effect?
2. Is the individual mandate, requiring all Americans to buy health insurance or pay a penalty, constitutional?
3. If the mandate is not constitutional, how much of the rest of the law must be struck down?
4. Can Congress force the states to expand Medicaid?

Here’s the health care cases in a 90-second nutshell, from Bloomberg Law:

7:15 a.m. If the court’s decision is at all complex — and given the number of issues it’s considering, that’s highly likely — it will be interesting to see how quickly reporters can make sense of what the ruling actually is. Those of you with long memories may recall one of the Supreme Court Press Corps’ worst moments, when it tried to determine on live TV what the heck the court decided in Bush v. Gore. For a refresher, take a look at this video, starting at the 1-minute mark:

Indeed, you only have to look back to Monday’s decision on Arizona’s immigration law to see how difficult it is for the media to parse an “affirmed in part, reversed in part” decision. Politico reported about the confusion and also looked at the lighter side of the confusion on Twitter, including this response:

The minutes it takes to sort out the decision is a period of particular danger for politicians, the New York Times reports:

The momentary chaos could be downright dangerous for political candidates who move too quickly to embrace or condemn the court’s actions. A stray statement made before all the facts are understood could easily come back to haunt a political candidate.

In the end, the political danger is likely to prompt a period of awkward silence from both camps in the first few hours after the ruling. That will give the campaigns a chance to digest the ruling, examine the opinions and come up with statements that are least likely to get them in trouble.

7:08 a.m. The Supreme Court is not the most digitally advanced arm of the federal government. The first people to know what today’s decisions are will be the reporters in the court’s press room, who will be handed paper copies of the rulings.

Forbes magazine asks “Is SupremeCourt.gov the Worst Federal Website?”:

At a time when President Obama’s Open Government Initiative has led to a new push for transparency and major overhauls of federal websites, SCOTUS is still shrouded in mystery, offline and on-.

Looking at the Court’s site the night before the Affordable Care Act decision is to be handed down, there’s nothing that suggests what’s coming tomorrow or even an easy way to learn the time of the announcement. The site’s design and style pale next to websites managed by the government’s executive (WhiteHouse.gov) and legislative (House.gov) branch.

6:57 a.m. Here’s a look at the overnight scene at the court, posted by Twitter user Robyn Nolan at 4:09 a.m.:

And Huffington Post senior political reporter Jon Ward tweeted at 6:00 a.m. that by 4:30 a.m., all the TV crew stand-up locations in front of the court’s steps were taken:

6:56 a.m. For those of us who report about and analyze the law, this is our Super Bowl. And at the Chicago Sun-Times, the nerves are showing.

Eagle-eyed journalist Dan Catchpole at Washington’s Yakima Herald-Republic noticed early yesterday evening night that the Chicago paper had posted to its website its draft copy for the health care story, with four different headline treatments:

Needless to say, it has since been taken down. Mistakes like this have a long history in Chicago. It was the Chicago Tribune that published the infamous Dewey Defeats Truman headline in 1948.

6:55 a.m. Welcome to Decision Day in the Supreme Court’s health care cases. We’ll be live blogging the whole day, starting now with context and on-the-scene reports from outside the court building, through the announcement of the decisions shortly after 10:00 a.m. ET, and into the late afternoon as analysis rolls in from across the political spectrum.

We’ll be looking at the legal, business and political angles of the story, with reports from Bloomberg’s army of reporters and analysts, along with the best coverage from other mainstream media outlets and the blogosphere.

And we start with a caveat – we say it’s Decision Day, but it may not be. The court is free to hold the case over until the start of its next term in October, either because it hasn’t been able to complete its work or because it wants additional briefing or oral argument on a particular issue related to the cases. It’s highly unlikely it will do so, but it’s not unheard of. The landmark Brown v. Board of Education, for instance, was argued on December 9-11, 1952, then reargued on December 7-9, 1953. A decision was finally issued on May 17, 1954.

Original post is Live Blog: Health Care Cases Decision Day by Health Care at the High Court.

Chief Justice John Roberts did little to show his hand during this week’s health care reform law oral arguments. And that puts him in a position to define the Roberts Court in one of its biggest cases, pundits and reporters are suggesting.

Writing on Politico, Jeffrey Rosen, a law professor at The George Washington University, says:

If Roberts presides over a court that strikes down health care reform by a 5-4 vote, his ambition of transcending politics on the Supreme Court will have to be judged a failure.

If, by contrast, Roberts can find a way of helping his conservative colleagues to overcome their political convictions and uphold health care reform on narrow grounds, even his critics will have to admit that he has achieved a real success.

Reuters reporter Joan Biskupic writes that Roberts, along with “the usual swing-vote justice, Anthony Kennedy, seemed right in the middle of the two ideological wings. Whichever way Roberts goes, legal analysts on both sides of the case predict, the chief justice is likely to write the main opinion for the court.”

The chief seemed to be viewing the case in broad historical terms, Biskupic says:

Throughout the arguments this week, he referred to historic milestones, including of the New-Deal era when the justices bolstered federal power. Overall, he suggested from his questions he was weighing whether a decision to strike down the individual mandate would be a break from past court cases or be in sync with them. Whether that means he is with the Obama administration or against it, is still a matter of speculation.

Original post is It’s Roberts’ Moment to Define His Court by Health Care at the High Court.

We gathered four of the smartest legal observers around and asked them — before this week’s arguments in the health care reform cases took place — whether the cases would result in truly landmark decisions. Would the opinions alter the court’s jurisprudence in a fundamental way, with applications well beyond the subject matter of health care? Their answers were surprising.

Original post is Will Health Care Cases Bring Landmark Decisions? by Health Care at the High Court.

The GOP ad released online earlier this week makes it appear Solicitor General Donald Verrilli gave a worse presentation than he did, a Bloomberg News analysis of the ad and the court’s official audio recording shows. The full story follows:

Republicans Alter U.S. Supreme Court Audio in Obama Web Attack

By Julie Hirschfeld Davis and Greg Stohr

March 29 (Bloomberg) — A Republican Party web-based advertisement uses altered audio from U.S. Supreme Court oral arguments to attack President Barack Obama’s health-care law.

In a spot circulated yesterday, the Republican National Committee excerpts the opening seconds of the March 27 presentation of Obama’s top Supreme Court lawyer, Solicitor General Donald Verrilli, in which he is heard struggling for words and twice stopping to drink water.

“Obamacare,” the ad concludes, in words shown against a photograph of the high court. “It’s a tough sell.”

A review of a transcript and recordings of those moments shows that Verrilli took a sip of water just once, paused for a much briefer period, and completed his thought, rather than stuttering and trailing off as heard in the doctored version.

The RNC points to Verrilli’s halting performance as evidence that the 2010 law he is arguing to uphold — the marquee item on Obama’s domestic agenda and a favorite line of attack for Republican candidates seeking to defeat him in the November elections — is invalid.

“It seems that Obama’s lawyer hit a bit of a snag trying to defend the constitutionality of Obama’s health care takeover,” the RNC said in a statement accompanying the ad. “Maybe he’s beginning to realize something the American people already know: It’s hard to defend a law that is indefensible.”

Recordings of the court proceedings reviewed by Bloomberg News reveal that the audio has been edited. While Verrilli paused once to drink water during the opening moments of his presentation, he stopped talking for only a few seconds before continuing with his argument. In the RNC ad, he pauses for about 20 seconds, seeming to lose his train of thought.

The RNC’s transcript of Verrilli’s delivery, circulated with the web ad, is as follows: “For more than 80 percent of Americans, the ah insurance system does provide effective access [pause]. Excuse me. Ah [cough] it ah be-be because the ah the ah the [pause]. Excuse me.”

In the actual proceedings, Verrilli finishes his thought. “For more than 80 percent of Americans, the, ah, insurance system does provide effective access,” Verrilli says, pausing briefly and saying, “Excuse me.” He quickly continues, “But for more than 40 million who do not have access to health insurance, either through their employer or through government programs such as Medicare or Medicaid, the system does not work.”

Sean Spicer, an RNC spokesman did not immediately respond to a request for comment on the ad. Tracy Schmaler, a Justice Department spokeswoman, declined to comment. The solicitor general’s office is part of the Justice Department.

The Democratic National Committee declined to comment on the video, and requests for a comment by Obama’s re-election campaign received no immediate response.

Original post is GOP Ad Uses Doctored SCOTUS Audio by Health Care at the High Court.

The Wall Street Journal, Politico and The Week magazine all provide five key takeaways from yesterday’s final day of arguments in the Obama health care reform cases. But they’re not the same five:

Wall Street Journal

1. The Court Won’t Wait
2. Government Bore the Brunt
3. Watch the Swing Vote…
4. …And Possible Wild Card
5. It’s All About the Mandate

Politico

1. This may get ugly
2. This isn’t performance art
3. Clouds and fog on the third day of arguments
4. Maybe there’s a reason they’re not on TV
5. The ruling could be a huge mess

The Week

1. The justices are torn over throwing out all of ObamaCare
2. Some justices think it would be crazy to reread the bill
3. A Medicaid expansion might be in danger
4. The White House’s lawyer got slammed
5. Clarence Thomas still isn’t talking

Original post is 5 Health Care Takeaways X 3 by Health Care at the High Court.

Bloomberg News’ Mike Dorning reports the Supreme Court’s ruling on health care — expected in late June — will have a significant impact on the Presidential election campaign:

Striking down the health-care overhaul that President Barack Obama pushed through Congress would be a blow to the legacy of a president who used to teach constitutional law and who pursued the health legislation at a heavy political cost — the Democrats lost control of the House in the next election.

It also may bring into sharp relief the nation’s partisan divide. The law passed Congress on a party line vote, and the court may also divide between its Republican and Democratic appointees when it rules.

Still, in a testament to the depth of voter concern about the economy, academic experts and political strategists say they expect the decision to generate mostly short-term turmoil rather than a sea-change in the presidential race.

In the Wall Street Journal, Janet Adamy, Jess Bravin and Anna Wilde Mathews report that if all or part of the law is struck down:

Insurers would have to ditch changes to their businesses designed to bring in millions of new customers. Provisions that have already gone into effect, including letting children stay on their parents’ insurance plans until they turn 26, would no longer be required.

Companies facing the law’s requirements would be reprieved, including health firms set to pay new taxes and businesses that would have been required to insure their employees or pay a fee.

Original post is Candidates & Business Have Much Riding on Health Care Outcome by Health Care at the High Court.

Slate’s Supreme Court correspondent Dahlia Lithwick throws up her hands at the end of three days of oral arguments, no more clear about what the court will decide than she was going into the sessions:

Original post is What Will the Court Decide? Who the Heck Knows. by Health Care at the High Court.

Original post is Listen to the Justices’ Own Words by Health Care at the High Court.

The U.S. Supreme Court yesterday entertained final oral arguments in the case that will determine the fate of the landmark federal health care reform law, considering two questions regarding how much of the statute will survive if the court strikes the individual mandate (NFIB v. Sebelius , U.S., No. 11-393, oral argument 3/28/12; Florida v. HHS , U.S., No. 11-400, oral argument 3/28/12).

In the morning session, the high court heard from attorneys on whether, if the individual mandate is declared unconstitutional, it should be decoupled from the remainder of the Patient Protection and Affordable Care Act, so that the remainder of the law can take effect as planned. In the afternoon, the justices heard arguments on the validity of another PPACA provision that requires the states to expand their Medicaid rolls.

In both sessions, the justices seemed to break down along political lines, with Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia M. Sotomayor, and Elena Kagan appearing to favor arguments for severability and against finding the Medicaid provision unduly coercive, while Justices Antonin Scalia and Samuel A. Alito Jr. appeared to be set against severability and the Medicaid provision. Chief Justice John G. Roberts Jr. and Justice Anthony M. Kennedy were harder to read, but appeared to be siding with Scalia and Alito. Justice Clarence Thomas did not ask any questions.

Depends on Mandate

The resolution of both issues argued on the final day depends to an extent on the outcome of the main issue in the case: whether the individual mandate, which would require virtually all U.S. citizens to purchase health insurance or pay a penalty, is constitutional.

The parties challenging the mandate, 26 states and a group of private plaintiffs consisting of the National Federation of Independent Business and several individuals, March 27 argued that Congress exceeded its enumerated constitutional powers in adopting the mandate. The government, in opposition, said three constitutional clauses–the commerce clause, the necessary and proper clause, and the taxing and spending clause–all conferred authority on Congress to require citizens to buy health insurance (59 HCDR, 3/28/12).

Assuming the high court agrees with the challengers, it will have to reach the next issue–the severability question. The U.S. Court of Appeals for the Eleventh Circuit, from which the case came, held the mandate unconstitutional, but said it was the only provision that need be stricken from the larger law (157 HCDR, 8/15/11)(20 HLR 1243, 8/18/11).

The Eleventh Circuit also held valid PPACA’s Medicaid expansion provision, which requires states to expand Medicaid eligibility requirements or risk losing all federal Medicaid funds. If the Supreme Court holds the individual mandate valid, or says the individual mandate is valid but severable, then it also will have to decide the Medicaid issue.

Can PPACA Stand Without Mandate?

The states’ attorney, Paul D. Clement, of Bancroft PLLC in Washington, stated categorically that PPACA cannot stand without the individual mandate. The mandate is “essential” to the two purposes of the act–to provide for patient protection and access to affordable care.

Sotomayor immediately challenged Clement, saying that his position that the individual mandate was the “heart” of the law may or may not be true. Other states have implemented guaranteed issue and community rating provisions without a mandate, she said, referring to PPACA provisions that prohibit insurers from denying coverage to people with pre-existing conditions and require insurers to charge those people no more for their policies than is charged to other people within the community.

Sotomayor also asked, “Why not leave it to Congress to fix?”

Clement replied that Congress had the examples of those states and still concluded that the individual mandate was needed to make the guaranteed issue and community provisions work. It was Congress, not him, that declared the individual mandate “essential” to the law, Clement insisted.

In response to the justice’s second question, Clement asked one of his own: “What task do you want to give Congress?” In other words, he said, does the court want Congress to rewrite the entire statute or simply patch up what remains once the individual mandate is gone? The latter, he later said, could leave Congress floundering for years, as it has with other laws that have been stricken only in part.

Scalia interjected that Congress cannot necessarily be trusted to fix the law–there is such a thing as “legislative inertia,” he said.

Clement agreed, asking the court to consider the best solution in light of that reality.

Standard to Be Applied

Scalia quizzed Clement on the standard the court must apply when deciding severability questions. Is the question for the court, whether Congress would have enacted the law without the controversial provision or whether, in the absence of that provision, the law could work as Congress intended, he asked.

In PPACA in particular, Scalia said, many provisions paved the way for the legislation’s passage–whether through courting votes or through a sense that they were essential to the statutory goals. He raised the so-called Cornhusker kickback as an example, in which a deal was made with Sen. Ben Nelson (D) of Nebraska during consideration of the bill to win his vote for PPACA.

“It can’t be right to say” that if the court strikes the Cornhusker kickback, the entire statute is invalid, he said.

Putting the argument more simply, Kagan asked: “Would Congress prefer half a loaf to none?”

“There are situations where half a loaf is worse,” Clement replied.

Kagan asserted that the Supreme Court has never held that the test for severability is whether a statute would operate as Congress intended without the disputed provision. Later, Sotomayor said no statute could ever operate as Congress intended if it were missing a piece.

Kennedy, too, pressed Clement to identify the correct standard. Is a provision not severable if Congress would not have passed the law without it, or is it not severable if the law would not work as Congress intended absent the provision, he asked.

Clement insisted that the court has used both standards in the past. But “what test should we apply,” Kennedy asked. Clement responded that the court should use an objective, textually based approach under which it would have to find against severability.

Lots of Unrelated Provisions

Ginsburg pointed out to Clement that there are “so many things in this act that are perfectly OK” and unrelated to the individual mandate. Why make Congress redo all those provisions, she asked.

It is “a choice between a wrecking operation and a salvage job,” she said.

Clement said he believed there was a strong case for invalidating numerous PPACA provisions, but in any event, striking the mandate would leave the remainder of the statute “a hollow shell.”

Breyer also noted that PPACA contains numerous provisions unrelated to the individual mandate, such as provisions required employers to set aside rooms for breastfeeding mothers. “What do you suggest we do,” he asked Clement. Should the court spend a year reading the 2,700-page law and determining which provisions survive and which do not?

Roberts asked Clement for a fall-back argument. Clement insisted, however, that it might be better to give Congress “a clean slate” upon which to work.

Half a Loaf

Deputy Solicitor General Edwin S. Kneedler, arguing for the government, began by insisting that there is no need for the court to reach the severability question because the individual mandate is constitutional. In the event the court holds otherwise, however, he told the justices the act is partially severable. If the individual mandate falls, then the guaranteed issue and community rating provisions must fall with it, he said.

Ginsburg asked Kneedler if the court was the proper party to decide that–or whether it really was an issue for Congress to determine what provisions could work without the individual mandate. Congress should decide as to most provisions, Kneedler said.

But Scalia asked: “Isn’t it unrealistic to send it back to Congress?” Many PPACA provisions already are in effect, he noted. Congress would have to reconcile a PPACA without the individual mandate with those other provisions regardless of whether the court strikes the whole law, he said.

Kneedler asserted that the doctrine of judicial restraint should preclude the court from overreaching in this instance. Kennedy, however, argued that it might be a greater violation of the doctrine of judicial restraint for the court to strike only the individual mandate. After all, if only the individual mandate falls, then the rest of the provisions remain, putting pressure on insurers to provide services for which they may not receive compensation, he said.

That could be “a more extreme use of judicial power” than refusing to sever the mandate, Kennedy said.

Scalia later asked Kneedler whether he really expected the court to go through the law line-by-line to pick and choose constitutional provisions. That would be “totally unrealistic,” he said.

Kneedler said that would not be necessary, as there was a “sharp dividing line” in PPACA between the individual mandate, the guaranteed issue, and the community rating provisions–on the one hand–and the remainder of the statute on the other. Roberts pressed him to identify that line.

Economic Considerations

Alito asked Kneedler to address the economic implications of striking the individual mandate. What would happen to the insurance industry if it were required to abide by the remaining PPACA provisions, but was not being subsidized by the individual mandate, he asked.

Kneedler responded that the economics of the issue should not concern the court, but Kennedy also insisted it was a legitimate consideration. If the individual mandate falls, one can assume there will be no money to help insurers cover the costs for individuals with pre-existing conditions, yet they still will be obligated to offer policies to those individuals, he said. “Is it the court’s function to say Congress would have intended” such a result?

Again, Kennedy said, “isn’t that a greater example of judicial activism” than simply striking the entire law?

Later in the argument, Scalia returned to the position that upholding the statute without the mandate might “bankrupt” the insurance industry. Alito asked Kneedler to identify the difference between the “unrelated” provisions and those that will cost insurers millions of dollars over the years.

Kneedler suggested that the court look at the statute Congress enacted rather than “a financial balance sheet.”

Precedential Support?

Scalia asked Kneedler if he knew of any case in which the court struck the core of a statute while leaving the remainder intact. Kneedler referred to United States v. Booker, 543 U.S. 220 (2006), in which the court struck down a provision of the U.S. sentencing statute. Scalia replied that he did not believe the section stricken in that case was the “heart” of the sentencing statute.

Breyer asserted at this point that it has not been uncommon for the court to refuse to strike all the provisions of a large statute.

Complete Severability

Because none of the parties argued in favor of complete severability, the Supreme Court in November appointed H. Bartow Farr III, of Farr & Taranto in Washington, to argue that point. Farr began by asserting that the government’s position was an example of “throwing out the good with the bad.” Even if the individual mandate falls, he said, the guaranteed issue and community rating provisions still will advance Congress’s goals in enacting PPACA.

Ginsburg said the point had been made that the cost of insurance coverage likely will not be affordable without the mandate and, therefore, one of the act’s major goals will not be met. Farr responded that one must look at whom the price would affect. The price of obtaining insurance through a health insurance exchange, for example, should remain lower than obtaining insurance individually.

Kagan asked whether health insurance exchanges still would work to lower overall premium costs if younger, healthier people felt no need to participate. Farr said they would. The principle of “adverse selection” put forth in the government’s brief is a “misconception,” he said. And, in any case, other PPACA sections, including those providing for more federal support of programs, lessen the impact of adverse selection.

‘Essential’ Means ‘Useful’

Farr also took issue with the idea that the individual mandate is “essential” to PPACA’s operation. In the context of the commerce clause, he said, “essential” means “useful.” Congress really found that the act would work better with the individual mandate; it did not find that the act would not work at all without it, he said.

Scalia called that a “very imaginative” argument and asked to see a dictionary.

Farr said that was the whole point–when determining whether a law could be justified under the commerce clause, Congress does not use the common meaning of essential, but instead looks at what provisions will be useful to carrying out its intent.

Sotomayor said Farr was ignoring Congress’s findings. The argument that the individual mandate was not “essential” was post hoc, she said. Farr pointed out, though, that the Congressional Budget Office reported, prior to passage of PPACA, that there would be no “death spiral” without the individual mandate.

Kennedy asked Farr whether he was saying that the mandate served an “insignificant role.” He replied, “it doesn’t sound right when you say it that way.”

Real Question

The real question in deciding severability, however, is whether Congress would want to go back to a pre-PPACA scheme, Farr said. “Please bring in Congress,” he urged the justices.

Scalia appeared to see no merit in that. Once the heart of the statute is taken out, the statute is gone, he insisted. Taking the statute back to Congress would put lawmakers in the position of having to decide where the money to fund other provisions would come from, he said. That is “a gross distortion of the democratic process,” he said.

Later, Breyer said, “I would say, stay out of politics–that’s for Congress, not us.”

Medicaid Expansion Provision

In the afternoon, the court turned its attention to the validity of PPACA’s Medicaid expansion provision. According to the states, this provision is unconstitutional because it coerces the states to expand their Medicaid rolls or risk losing all their federal Medicaid funds.

No court, including that most sympathetic to the challengers’ stance, the U.S. District Court for the Northern District of Florida (20 HLR 169, 2/3/11), has upheld the state’s position. From the tone of the justices’ questioning, that may be about to change.

The first attorney up, however, was Clement, and he immediately was hit with a barrage of questions from Kagan.

Under the Medicaid expansion provision, she said, the federal government will give the states 90 percent of the funds needed to cover newly eligible individuals. What if the government offered 100 percent of the funds, she said. Would the states still object?

“Yes,” Clement replied.

The federal government is offering to give states “a boatload of money,” she noted. “That doesn’t seem coercive to me.”

There are still federal conditions on how states use that money, Clement said.

Sotomayor asked, “at what percentage would a condition become coercive?” If the federal government gave the states 100 percent of their Medicaid funding, would that be coercive? The state can turn down the money, she said.

Clement insisted there must be some limit.

But Sotomayor persisted. “What’s coercive,” she asked. Is it that “the states don’t want to go to their voters and say we don’t want federal money,” so the citizens have to pay for medical care for the poor?

Administrative Law Limits Power

Ginsburg asked Clement if it is true that the federal government has conditioned the states’ receipt of Medicaid money on their acceptance of every new condition imposed by Congress. Breyer noted that a 1965 statute–the same one referenced in the Medicaid expansion provision–gives the secretary of health and human services the “discretion” to cut off federal funds if states refuse to comply with conditions imposed by the federal government. Thus, he said, states are not face with losing their Medicaid funds for noncompliance–only the possibility of losing their funds. It is up to the secretary, and under the Administrative Procedure Act (APA), her decision must be “reasonable,” and “not an abuse of discretion.”

Breyer asked Clement if he knew of any case in which the secretary had, in fact, followed through with the threat and cut off a state’s Medicaid funds and, further, whether that action had been found to be a “reasonable” exercise of her discretion.

Scalia inserted that, if the statute says the money can be taken away from the states, that is enough. It does not matter whether the secretary actually will take the funds away.

But courts have always looked at the reasonableness of an administrator’s actions, Breyer insisted. The secretary cannot, under court precedents, act arbitrarily or unreasonably.

Do Away With Medicaid?

Could the government, Sotomayor asked, do away with Medicaid altogether?

Clement hedged, but admitted he was not saying the states had a vested right to receive Medicaid funds.

Then “I don’t understand why” states do not have a choice here with regard to complying with new conditions or not receiving funds, Sotomayor said.

Clement said the question of whether Congress can do away with Medicaid all together is “fundamentally different” than the question of whether it can condition receipt of all Medicaid funds on compliance with the new PPACA requirements.

Ginsburg noted that there are states that like the new provision–should the court strike it and destroy the opportunity for those states to receive additional funds, she asked. Clement said that was not the point. If Congress had made participation in the new conditions voluntary–comply with the new conditions and get the new money–that would have been fine. But Congress did not do that, he said.

Ginsburg insisted that she has never seen a federal government program struck down because it is “too good.”

This case crosses the line, Clement said.

How is this Medicaid expansion provision different from all the other expansions of Medicaid Congress has enacted in the past 40-some years, Breyer asked. In implementing those expansions, the secretary had discretion to deny federal funds to any state that refused to comply, just as she does here, he said.

Clement said the “sheer size” of the PPACA expansion explains the difference.

“At what point is a program too big?” Kagan asked. Breyer noted that, in terms of percentages of gross adjusted product and taking inflation into account, the current expansion does not look that much bigger.

‘Your Money or Your Life’

Scalia brought the argument back to the meaningfulness of the choice offered to the states. Is it like, “your money or your life,” which is no real choice, he said.

At what point is the choice compromised, Roberts added.

Clement said the new money is hard to refuse, but, in addition, states are being told they will have to give up existing funds if they do not comply with the PPACA provision.

Has the states’ willingness to take the federal funds in the past compromised their ability to make a choice here, Roberts asked. It has put the states in a position where they cannot reasonably refuse the money, Clement said.

Kennedy raised a scenario in which the federal government took back all responsibility for Medicaid. If the federal government could just directly provide for health care for the poor, how is the interest of federalism concerned, he asked.

Clement said it was a matter of accountability. If the federal government took over Medicaid, then people could go to the federal government when it had a problem. With a dual state-federal cooperative system, the party accountable is not so clear, he said.

Kagan found the argument confusing. Medicaid was intended to be an example of cooperative federalism, she said. Cooperative federalism is fine, Clement said. But here, the federal government is forcing the states to participate.

Exercise of Spending Power

Appearing for the federal government, Verrilli told the court the Medicaid expansion provision is a perfectly constitutional exercise of Congress’s power under the taxing and spending clause.

But, Scalia said, the court said, in South Dakota v. Dole, 483 U.S. 203 (1987), that the federal government used federal funds to coerce state action. Verrilli responded that that was dicta in Dole and, in any case, the court said there was a possibility of coercion, not a fact of coercion, flowing from federal funding.

Is it all right for the federal government to tell a state to “take it or leave it,” but if you leave it, you lose all federal funds, Roberts asked.

Verrilli said that is not the case here.

Alito proposed a hypothetical in which the federal government took over education. Citizens would have to pay a federal education tax, and the federal government would distribute the funds to the states according to the percentage they spent on education the previous year, conditioned on the imposition of federal education guidelines. If a state turned down the funds, Alito said, its citizens would have to fund education within the state as well as pay the federal education tax. Would that be coercive, he asked.

Verrilli said it would not, because the states would have a choice of whether to accept the federal funds.

Then what is left, Alito asked. “Political constraints,” Verrilli replied. Congress would not take over education as a practical matter, he said.

As to Medicaid, however, it is not the norm that Congress has said the states can stay where they are at–Congress had changed Medicaid numerous times over the years, and every major expansion has imposed conditions on the states.

Back to Secretary’s Discretion

Is there any assurance the secretary will not exercise her discretion and deny funds to noncooperating states, Roberts asked. Before Verrilli could reply, Kagan asked whether the secretary ever has done that. “No,” Verrilli said.

There is no evidence anyone has been shot when confronted with “your money or your life,” Roberts noted. That does not mean the person making the threat never will shoot, he said.

But Verrilli insisted that the states and the federal government always have worked out these types of disputes. Neither wants to be in the position of denying medical care to the poorest of the poor, he said.

Still, Alito insisted, is it realistic to say the secretary never will deny Medicaid funds to a state based on its refusal to comply with conditions?

Say No to Funds?

In concluding the argument, Scalia asked whether Congress considered, in passing the Medicaid provision, that a state ever would leave the Medicaid program. If not, then the conditions imposed here are coercive, he said.

Congress merely predicted that the states would not leave, Verrilli replied. A “prediction is not coercive,” he said.

But if there is no Medicaid, and the individual mandate survives, how would the poorest of the poor pay for health insurance, Alito asked. Congress had to assume the states would accept the Medicaid expansion provision, he said.

Original post is Wednesday’s Arguments: What the Justices Said by Health Care at the High Court.

The health reform law’s requirement that most Americans buy health insurance by 2014 or pay a penalty received a two-hour airing yesterday, as the U.S. Supreme Court heard oral arguments on the constitutionality of the Patient Protection and Affordable Care Act’s individual mandate (HHS v. Florida, U.S., No. 11-398, argued 3/27/12).

Attorneys for 26 states and several private parties challenging PPACA’s individual mandate argued that Congress exceeded its authority by forcing people to enter into a contract and purchase a product–health insurance–from a private provider.

The questions posed by the justices suggested support for the opponents of the mandate.

The court was reviewing the U.S. Court of Appeals for the Eleventh Circuit’s ruling in Florida v. HHS, 648 F.3d 1235 (2011) , which held that Congress went too far and the mandate lacked any discernible limitation on congressional authority under the commerce clause.

It also held that the minimum coverage provision could not be upheld as a legitimate exercise of Congress’s taxing power.

PPACA, 26 U.S.C. § 5000A, states:

An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.

By forcing otherwise healthy individuals to purchase insurance, Congress hoped to balance out the upward pressures on insurance costs created by the extension of coverage to these otherwise uninsurable–or at least high-risk–insureds.

Virtually Unlimited Power?

Justice Anthony M. Kennedy asked Solicitor General Donald B. Verrilli Jr., who argued for the government whether upholding the mandate meant granting the federal government virtually unlimited power under the commerce clause.

The question is particularly relevant, Kennedy said, where the government’s mandate that people take affirmative action to buy health insurance “changes the relationship of the federal government to the individual in the very fundamental way[.]”

During the argument, the justices searched for where to draw the line on congressional power under the commerce clause.

“Can you create commerce in order to regulate it?” Kennedy asked Verrilli soon after he began his argument.

“That’s not what’s going on here,” Verrilli responded. Rather, Congress is regulating the way people pay for their health care, he said.

“That itself is economic activity with substantial effects on interstate commerce,” Verrilli said.

Applicable Only to Insurance

Chief Justice John G. Roberts Jr., who spent much of the argument looking for potential compromises and shared ground, put a finer point on Verrilli’s answer.

“Is your argument limited to insurance?” he asked.

“Yes,” Verrilli replied.

Once an interstate market for health care is established, in which everyone is a participant, what new problem and new solution will Congress come up with next year? Roberts asked.

Justice Antonin Scalia jumped in before Verrilli could answer.

The next big thing will be that “everybody has to exercise, because there’s no doubt that lack of exercise causes illness, and that causes health care costs to go up,” Scalia predicted.

Mandate Captures ‘Golden Geese’

Immediately pouncing on the elusive notion of a limiting principle, Paul D. Clement, Bancroft PLLC, Washington, began his argument on behalf of the 26 states challenging the mandate by arguing that Congress “justified the mandate as a regulation of the economic decision to forgo the purchase of health insurance.”

That, he said, “is a theory without any limiting principle.”

Justice Elena Kagan characterized the argument as just a matter of timing. The individual mandate effectively pushes the moment of regulation from the point of sale backward, she said, but Clement responded that “We don’t think it’s a matter of timing alone[.]”

Importantly, regulating how people pay for health care at the point of sale does not “capture” the one demographic that Congress was counting on when it enacted the individual mandate–“people who don’t want to purchase health insurance and also have no plans of using health care services in the near term,” Clement said.

Those people are the “golden geese” who help lower insurance premiums “as Congress intended,” he said.

Hammering home the question of a limiting principle, Clement told the justices, “a proper question for this Court … is whether or not, for the first time ever in our history, Congress also has the power to compel people into commerce.”

Uninsured ‘Very Close’ to Affecting Rates

Justice Stephen G. Breyer, who repeatedly tried to paint the current dispute in terms of the court’s prior commerce clause decisions, said that perhaps this was not the first time Congress has compelled commerce.

The high court incorporated a national bank that the Supreme Court upheld in McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819). That created commerce, Breyer said.

Judge Jeffrey S. Sutton of the U.S. Court of Appeals for the Sixth Circuit, in his opinion on PPACA’s constitutionality, had “two pages” of examples in which “the government can compel people to buy things they don’t otherwise want to buy,” Breyer said, referring to Thomas More Law Center v. Obama, 651 F.3d 529 (6th Cir. 2011) (80 U.S.L.W. 9).

He pointed to Wickard v. Filburn, 317 U.S. 111 (1942), noting that the farmer in that case was forced to purchase wheat because he was prohibited from growing it himself, Breyer said.

But in that case there was no compulsion to purchase wheat, according to Michael Carvin, Jones Day, Washington, who argued on behalf of the National Federation of Independent Business and other private plaintiffs.

Filburn “could have gotten wheat substitutes” or simply sold less wheat, retaining some for his personal use, Carvin said.

Further, in this case, the government targeted the wrong individuals, Carvin said. The problem with uncompensated care lies with people who do not pay their medical bills, not with those who don’t have insurance, he argued.

“The young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries. That’s my concern in the case,” Kennedy said.

Nobody Said It Was a Tax

The court spent very little time on the question of whether the individual mandate could be upheld as an exercise of Congress’s taxing power.

Justices from both sides of the ideological spectrum questioned why they shouldn’t take the other branches of government at their word when they declared that the mandate–and its related penalty–was not a tax.

“The President said it wasn’t a tax, didn’t he?” Scalia asked Verrilli.

“Here we have a case in which Congress determinedly said this is not a tax, and the question is why should that be irrelevant?” Kagan asked.

Scalia asked Verrilli why they were spending so much time on the commerce clause issue if the mandate was simply a tax and well within Congress’s power.

Verrilli said that the mandate was indeed justifiable under the taxing power, to which Scalia simply remarked: “Extraordinary.”

Original post is Tuesday’s Arguments: What the Justices Said by Health Care at the High Court.