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April 2, 2012

Washington Health Policy Week in Review Archive 41365a65-0969-400c-98d8-3ead62079ec8

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Supreme Court Ruling Could Turn Health Care Topsy-Turvy

By John Reichard, CQ HealthBeat Editor

March 30, 2012 -- Questions by U.S. Supreme Court justices during this week's oral arguments over the fate of the health care law raised the distinct possibility that they will decide to wipe the whole thing away.

In doing so, the justices would be erasing not just the blueprints for ambitious changes to the health care system that have not yet happened, such as the coverage of 30 million uninsured Americans. They would also gray out many things that are now part of the landscape.

The justices were scheduled to meet late last week to take their first tentative votes in the case, with a ruling expected in late June. Some observers are already penciling in a 5-4 vote nullifying part or all of the law.

The stakes are huge when one considers the breadth of the law (PL 111-148, PL 111-1542). There is an enormous difference between getting rid of it the entire law and only eliminating the mandate.

A Loss of Existing Coverage

Millions of Americans owe their current coverage to the health care law, including those who have already gained coverage under the measure and those now enrolled in the Medicaid and Children's Health Insurance Program whose eligibility cannot be trimmed under the health law.

For example, 50,000 Americans are now covered by the Pre-existing Condition Insurance Plan, or PCIP. Before that program, they had been unable to qualify for health insurance because of costly pre-existing medical conditions. If the health law goes, they again would be uninsured and unable to get health coverage.

In addition, the Obama administration estimates that about 2 million Americans in their early to mid-twenties are covered by their parents' health plan thanks to the law. Many in this group would likely be uninsured without the provision.

The "maintenance of effort" requirement in the overhaul says states must maintain current Medicaid eligibility levels for adults until 2014, when state insurance exchanges start, and they must maintain eligibility for children through 2019. Republican governors have put pressure on lawmakers to get rid of the requirement as a way to cope with budget pressures.

O. Marion Burton, immediate past president of the American Academy of Pediatrics, says that if the law is overturned, 4 million children who have coverage will lose it because states will cut funding for Medicaid and CHIP.

The health care law already is increasing access to care in other ways that would no longer be funded if justices throw out the law. Specifically, the law has increased funding for community health centers that treat underserved populations in the inner city and in rural areas. Those added funds would dry up if the law is struck down.

Existing Consumer Protections Erode

Existing coverage also could go by the boards in other ways. For example, plans are prohibited under the health care law from placing lifetime limits on how much they will pay out for an enrollee's medical care. For cancer and other patients with very costly medical conditions, that provision has kept them from losing coverage.

Some small businesses have begun receiving tax credits to help them pay for coverage. Those credits would end.

The law also bars "rescissions," or the cancellation of coverage for other reasons. Consumer activists claimed that before the law such cancellations occurred in some cases in which women with breast cancer filed claims for care for the disease.

In addition, children with pre-existing medical conditions cannot be denied coverage. The law also has begun phasing out annual limits on medical care payouts over several years until they are completely eliminated.

The Center for Consumer Information and Insurance Oversight (CCIIO) at the Centers for Medicare and Medicaid Services (CMS) presumably would be eliminated, and with it programs that keep premiums from rising too much and ensure that minimum percentages of the premium dollar go to pay for medical care and quality improvement. The hundreds of CMS employees involved in implementing the law would presumably face layoffs.

CCIIO funds the review of yearly premium increases by insurers, requiring that they publicly justify proposed increases of more than 10 percent. Its "medical loss ratio" rules are now in effect and will require insurers to issue rebate checks to consumers this summer if they didn't pay at least 80 cents of the dollar for medical care and quality improvement in the case of small group and individual market plans and 85 cents in the case or larger group plans.

The website operated by CCIIO that helps consumers quickly compare insurers when they are shopping for plans would go dark. A rule that standardizes the way insurers describe their health benefits to make it easier to figure out what a plan covers and to compare it to other plans would be stopped.

A regulatory effort to ensure that health plan enrollees can appeal to independent outside boards when they are denied services by their plans would cease.

Efforts to establish a minimum set of "essential benefits" health plans provide would come to a halt, including rule-making to ensure plans provide women contraceptive coverage without charge.

States would stop getting money from CCIIO to build their own insurance exchanges to offer lower cost coverage to individuals and small businesses. Only a handful of states have those exchanges now or are close to getting them up and running.

Grants would stop for "Consumer Operated and Oriented Plans," the so-called COOP program designed to create competition against big for profit insurers by starting new consumer-run plans whose profits would go to lower premiums and improve benefits.

Other provisions to improve consumer and public health would end. For example, rule-making has already begun to require fast food chains to post calorie counts next to menu items. And the health care law funds a website that lets consumers check the extent to which their doctor is getting money from drug or device companies, creating a potential conflict of interest in prescribing.

The $15 billion Prevention and Public Health Trust Fund would be shuttered. So far, it has been used to increase the supply of primary care health professionals. It's also being used to counter obesity and fund smoking cessation programs and train public health workers. The Obama administration has proposed to take $80 million from it to pay for research into treatments to prevent Alzheimer's disease.

A Food and Drug Administration program to create a regulatory "pathway" for the approval of lower cost versions of high-cost biotech drugs is also part of the health law. The agency's progress toward getting those products on the market would be slowed.

New Medicare Benefits End

Medicare has paid out hundreds of millions of dollars in new Medicare benefits, notably to cover prescription drug costs in the "donut hole." This is the gap in the current Medicare drug benefit in which beneficiaries must pay full prescription costs. This gap would widen again rather than be eliminated.

A free annual wellness visit to the doctor to develop a personalized preventive care plan would no longer be reimbursed. Out-of-pocket charges would be restored for colorectal screening and mammographies among other preventive care benefits.

Hundreds of millions of dollars in funding to strengthen programs that fight fraud in Medicare and Medicaid would stop. That fraud costs the programs billions, analysts say.

Quality, Safety, Efficiency Affected

A number of programs already under way to improve the quality, safety and efficiency of health care would ostensibly be closed for lack of funding. The Center for Medicare and Medicaid Innovation and the CMS Medicare-Medicaid Coordination Office, which has launched programs to streamline care for the sickest Medicare patients, would be closed.

A CMS program to launch team-based care through new accountable-care organizations—a program that has touched off extensive planning and a wave of acquisitions in the health sector to more closely align providers—would stop.

The innovation center also has launched other ambitious programs to reduce medical mistakes and provide more comprehensive care for the chronically ill out of doctor's offices that would become "medical homes."

The $500 million "Partnership for Patients" program that has enlisted 3,200 hospitals in an effort to reduce hospital-acquired infections by 40 percent over three years would come to an end. CMS has estimated the program could save Medicare $50 billion over years.

Some $600 million in funding to incent primary care doctors to coordinate the overall care of patients and keep tabs on whether they are getting preventive tests and keeping up with their medications—steps proponents think would eventually save Medicare money—would dry up. The recently launched "Independence at Home" demo that aims to save Medicare money while improving care by sending teams of doctors and nurses into patients' homes to keep them stabilized and out of nursing homes would end.

A $500 million "community transitions" program to keep discharged hospital patients from having to go back to the hospital by making sure they follow their discharge instructions for post-hospital care would also end.

A billion-dollar-plus program for "comparative effectiveness research" to identify the best medical treatment would stop. Called the Patient-Centered Outcomes Research Institute, proponents hope its work will help bend down the upward curve in national health care spending.
The Medicaid and CHIP Payment and Assessment Commission, which aims to improve quality, efficiency and access to care in Medicaid, would be discontinued.

The current moratorium would end on the construction of doctor-owned specialty hospitals, which critics say make it harder for competing community hospitals to offer a wide spectrum of services.

Cuts Would Stop

Medicare and Medicaid Cuts have already begun that would total $500 billion over 10 years. Stopping those cuts could ease beneficiary access to Medicare Advantage plans and to hospital, home care and skilled nursing facility services. But GOP lawmakers have talked about preserving the cuts and using them for debt reduction or to pay for a permanent "doc fix."

Justice Antonin Scalia says it is time to take out the health law "in toto." If he gets his way, the current health policy landscape will be dramatically reshaped—and very soon.

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The Supreme Court Justices Try on Their Health Policy Hats

By Jane Norman, CQ HeathBeat Associate Editor

March 29, 2012 -- During three days of oral arguments on the health care law, the nine Supreme Court justices espoused many views that went far beyond constitutional law and delved deep into the realm of health policy. How the justices regard these policy issues is important as they withdraw from public view to decide among the several alternatives that emerged during their long hours of debate.

Based on their questions and statements about the Tax Anti-Injunction Act, it appears doubtful that they will decide that that law applies and therefore postpone a decision on the health care overhaul's constitutionality until after penalties for not having insurance are collected in 2014.

That would leave them picking from among the choices of keeping the law (PL 111-148, PL 111-152) in its entirety, striking down all of it or finding a middle ground that preserves some portions of the measure but excises others, such as the individual mandate or the Medicaid expansion. Their decisions will involve not just the technicalities of the law but policy as well.

For example, liberal Justice Elena Kagan expressed a view on exchanges that may have startled the Obama administration. During arguments on whether the rest of the law should survive if the mandate is struck down, Kagan said health benefits exchanges "function perfectly well in Utah, where there is no mandate" to buy insurance.

"They function differently, but they function," she said. "And the question is always, does Congress want half a loaf? Is half a loaf better than no loaf? And on something like the exchanges, it seems to me a perfect example where half a loaf is better than no loaf." The exchanges, she said, "will do something—they won't do everything that Congress envisioned."

While Kagan was assuming, for the sake of argument, that the individual mandate would be struck down, the Utah exchange, which was created before enactment of the health care law, likely would not be a first choice for Democrats and consumer groups. It is most often cited by Republicans as a model because it is far leaner and less regulatory than a similar exchange created in Massachusetts. Plans on the exchange in Utah also can deny sick people coverage or charge them very high rates.

"The overarching philosophy of Utah's approach to health reform is that the invisible hand of the marketplace, rather than the heavy hand of government, is the most effective means whereby reform may take place," says a description of the Utah exchange on its website.

Another frequent topic throughout the days of argument was what would happen to health insurance if the requirement to have insurance is tossed but consumer protections are kept that, for example, bar insurers from charging higher premiums on the basis of gender. This is a nightmare scenario for insurance company officials who predict chaos in the market and skyrocketing premiums.

Justice Sonia Sotomayor was willing to agree that prices would leap, as insurers predict. But she also explored alternatives to the mandate that she said Congress could consider.

"What we do know for those states that found prices increasing, that they found various solutions to that," she said. Massachusetts passed an individual mandate, but "others adjusted some of the other provisions," she said. "Why shouldn't we let Congress do that if, in fact, the economists'' are proven right that "prices will spiral?" she asked.

As for Justice Samuel A. Alito Jr., he likely won the hearts of insurers by worrying about their fate should the individual mandate be struck.

He asked about an argument made in a brief filed by economists that changes imposed by the law on the insurance industry will cost them $700 billion over 10 years, offset by $350 billion in new revenue from the newly insured subject to the mandate. "Assuming they are in the ballpark, if the $350 billion from the individual mandate were to be lost, what would happen to the insurance industry, which would now be in the hole for $350 billion over 10 years?" he asked.

Justice Antonin Scalia struck a similar chord: "That's going to bankrupt the insurance companies, if not the states, unless the minimum coverage provision comes into effect." And Justice Anthony M. Kennedy wondered whether it was a "proper exercise" of the court's authority to "impose that kind of risk."

Justice Ruth Bader Ginsburg said if the mandate is struck down, "it's nice that Congress made it possible for more people to be covered, but the reality is they won't because they won't be able to afford the premiums." Kagan said she could see a situation where "the whole system crashes and burns, becomes unsustainable."

Last week, during a discussion of the mandate, the justices turned to the question of what to do about uncompensated care, a prime reason why the law was enacted, so that the costs of such care are spread among all insurance holders and taxpayers. Kagan said, "You are entitled to health care when you go to an emergency room, when you go to a doctor, even if you can't pay for it."

This may be a little optimistic. While emergency rooms accept all comers, a doctor's office is not the same. Some doctors, for example, will agree to see only people with private health insurance, a major problem for the health care system and one that the law seeks to solve with an expanded system of community health centers that will treat people on Medicaid.

The justices also spent time exploring why Congress did not decide to instead mandate that people buy health insurance when they are admitted to a hospital, rather than before they get sick. "Did Congress consider those alternatives?" Kagan asked. "Why did it reject them?"
Kennedy, considered a swing vote, was thinking about how the health care law's mandate might change a person's role in society. He said the mandate is "concerning" because it "requires the individual to do an affirmative act" when it comes to health care that isn't required in other areas of life.

He added: "In the law of torts, our tradition, our law has been that you don't have the duty to rescue someone if that person is in danger. The blind man is walking in front of a car and you do not have a duty to stop him, absent some relation between you. And there is some severe moral criticisms of that rule, but that's generally the rule.

"And here the government is saying that the federal government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the federal government to the individual in a very fundamental way."

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Expert: Exchanges Could Survive Without Mandate, but Rates Would Rise

By John Reichard, CQ HealthBeat Editor

March 29, 2012 -- If the U.S. Supreme Court rules that the individual mandate is unconstitutional but otherwise upholds the health care law, will state insurance exchanges survive?

Yes, says one of the nation's leading experts on exchanges. But he thinks premiums charged on the exchanges will be higher than if the mandate were in effect.

"State exchanges could be viable on an ongoing basis even without the individual mandate," says Richard Curtis, president of the Washington, D.C.-based Institute for Health Policy Solutions.

But "without the individual mandate or other incentives for participation in the health insurance market, fewer individuals would obtain coverage when they are healthy, causing substantially higher premiums due to adverse selection," Curtis added. In other words, there would be an imbalance tilting toward older and sicker people in the makeup of enrollees in plans offered on exchanges.

Such marketplaces didn't survive in the 1990s when state health overhaul laws spawned a number of state-based exchanges. In those days they were known as "alliances" or "health insurance purchasing cooperatives."

The alliances were voluntary; no one had to get coverage there. The problem was that they lacked a way to assure a steady flow of good insurance risks enrolling in the health plans they offered.

It was no secret that mandatory alliances would have been more effective in bringing in healthy people to the alliances and in keeping rates down. But states didn't want to go that route. After a few years, the alliances weren't able to offer attractive rates and they faded away.

On the other hand, the mandate in the health law (PL 111-148, PL 111-152) that requires individuals to carry coverage would help prevent adverse selection in exchanges. Young and healthy people have to get coverage or pay a penalty. And the only place they can get federal tax credits to help pay for the coverage is in the exchanges.

Curtis says with the mandate gone, for those who are eligible for subsidies in the form of tax credits to help them pay for health coverage (those with annual incomes between 133 percent and 400 percent of the federal poverty level) those federal tax credits would compensate for the cost of those higher premiums.

"Since tax credit recipients can only obtain health insurance through the exchange, they would continue to constitute a reliable and substantial core population" for these new marketplaces, he said. "Earlier state exchanges which failed had no such core population," he said.

But unless a state adopted other ways to ensure broad participation in its exchange, that exchange wouldn't be able to offer affordable coverage for individuals with incomes above 400 percent of the poverty level who aren't eligible for federal tax credits.

The Obama administration has said that if the individual mandate is struck, so too should be provisions of the law requiring community rating in which everyone is charged the same rate regardless of age or health status and "guaranteed issue," which prevents an insurer from turning down any one.

Under that scenario, exchanges would probably be able to serve the tax credit-eligible population without turning anyone away, Curtis said. But it would be a mixed bag for people with incomes above 400 percent of poverty.

Insurers could then charge based on health status or deny policies to the sick. Exchanges would have to do that too because otherwise they'd be flooded with sick people. The growing percentage of sick people would cause premiums to escalate so much that the exchange could fail, Curtis said.

"If the court were to also strike the guaranteed issue requirement and the prohibitions on pre-existing condition limitations and /or health rating, issuers could offer more affordable coverage to healthy individuals. But those in need of care and coverage would be left without affordable coverage," Curtis says.

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Democrats Ponder a Health Care Law Minus the Mandate

By Nellie Bristol and Emily Ethridge, CQ Staff

March 28, 2012 -- Congressional Democrats say they have some options for replacing the health law's individual mandate if the Supreme Court strikes it down. But they recently said that they believe the provision will stand and are not yet seriously considering alternatives.

"There's discussion quietly among some people about what-ifs. But there is no overall plan in place because I think people have confidence the court will do the right thing," Sen. John Kerry, D-Mass., said after some arguments on whether if the high court strikes down a portion of the health overhaul law the whole measure goes down as well. Kerry was in the courtroom when the constitutionality of the individual mandate was discussed.

Rep. Jan Schakowsky, D-Ill., said that the law could still be effective without the mandate. "I think the arguments were very strong," she said. "It seems to be that the case was made that even if the mandate were struck down that the bill could go forward."

Supporters of the challenge to the health care overhaul (PL 111-148, PL 111-152) said that judging by questions from the justices, it appeared that not only the mandate, but the whole bill was in trouble.

"After today's argument if you combine them with the last two arguments, no one in America will be surprised if the Supreme Court strikes down the Affordable Care Act," said Georgetown law professor Randy Barnett, legal counsel for the National Federation of Independent Business, which joined 26 states in challenging the law. "It was quite clear that at the very minimum, the court was sharply divided yesterday." Also, he said, the justices did not pose many questions about what the act would look like without the mandate.

Barnett did allow for the possibility that just some of the law would be struck down. But, he said, "They weren't at all interested in the argument that they should just strike down the mandate and leave the rest of the bill."

Mark Shurlett, the attorney general of Utah, said the mandate is the heart of the bill. "Patient protection and affordable care—you can't have one without the other," he said. "You toss out the mandate —that's what made it affordable—it fails in and of itself."

Ron Pollack, executive director of Families USA said he had a different take. "I'm not sure the court is prepared to do that" he said, referring to the notion of the justices striking down the whole law.

Reacting to the afternoon session featuring arguments over the law's Medicaid expansions, Emily Spitzer of the National Health Law Program said a ruling to strike down the program could mean future Medicaid changes passed by Congress could be subject to legal challenge.

"I think that is one of the implications," Spitzer said of the possible ruling. "It's hard to understand why previous expansion decisions would have been okay while this one isn't."

Pollack agreed saying no Medicaid expansion has ever been invalidated. "This would change the entire way the federal government functions," he said, because it would mean the federal government could provide money to states, but not put conditions on how it's used.

Plaintiffs in the case, including 26 state attorneys general, said the federal government's threat to withhold Medicaid funding if states did not agree to the expansion constituted coercion. Pollack and Spitzer said the provision allowing states to withhold funding was passed in 1965. Although states have been threatened by HHS with loss of funds, Pollack and Spitzer said the provision has never been used. "It's one of the ways in which the federal government bargains with states," Spitzer said.

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Study: Relatively Few Would Have to Buy Coverage Under Mandate

By John Reichard, CQ HealthBeat Editor

March 27, 2012 -- Relatively few Americans would be affected by what polls show is the most controversial part of the health law—the requirement that individuals pay a penalty if they do not have health coverage.

That's the finding of a new study by the Urban Institute, which estimates that just six percent of the U.S. population, 18 million people, would have to "newly purchase" coverage under the individual mandate provision of the health overhaul law (PL 111-148, PL 111-152).

The term as used in the study refers to people who are uninsured now who would have to buy coverage. In most cases the government would provide some help for those needing insurance.

Linda J. Blumberg, one of the three authors of the study, says there is a misperception on the part of many that "everybody in the country is going to be directly affected" by the individual mandate and its penalty provision.

Blumberg said that misperception exists even though most Americans have coverage and wouldn't have to pay the penalty. She said many people fear they will lose that coverage and then be in a situation where they would have to pay. What people in many instances don't know, she said, is that the law would make subsidies available in most cases for them to buy coverage. Or, it would make them eligible for the Medicaid program, so they wouldn't have to pay the penalty.

The requirement is scheduled to take effect in 2014. However, it may not pass muster with the U.S. Supreme Court.

The study says 18.2 million Americans would have to newly purchase insurance in order to comply with the requirement. The researchers say that although 26.3 million Americans who are currently uninsured will be required to newly obtain coverage or pay a fine, 8.1 million people in this group qualify for "free or close to free" coverage through Medicaid or the Children's Health Insurance Program.

Of the 18.2 million who would have to buy coverage, 10.9 million would be eligible to receive subsidies to buy private coverage in new health insurance exchanges but would still have to pay some of the pay the costs out of their own pockets. About 7.3 million people "are not offered any financial assistance under the [health law] and will be subject to penalties if they do not obtain coverage," the study said.

Although relatively few Americans are affected, the requirement "will still make an important difference in the premium levels and long-term stability of the nongroup and small group insurance markets" under the health law, the study says.

"We find that premiums in the nongroup market would be 10 to 20 percent higher on average without the individual coverage requirement," it notes.

Blumberg said there has been a "communications failure" in explaining why the mandate is needed,which is to bring good risks into the insurance pool to make coverage more affordable.

"I think it's a broad failure," she said. "The administration could have done a better job, but I also think it's been very difficult to overcome misinformation that's been spread from many quarters about the law."

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Justices Debate Medicaid Expansion, Which Branch Should Settle Severability Question

By Jane Norman, CQ HealthBeat Associate Editor

March 28, 2012 -- Liberal and conservative justices at the Supreme Court last week sharply questioned lawyers on whether it's their job or Congress's responsibility to decide what will happen to the rest of the health care law if the court decides to strike down the individual mandate.

Later on in an afternoon session devoted to whether the law's Medicaid expansion is constitutional, the court's liberal wing attacked an argument by 26 states that the health care law (PL 111-148, PL 111-152) has unconstitutionally coerced them into serving millions of uninsured once the law goes into effect in 2014. Justice Elena Kagan told the lawyer for the states, Paul Clement, that getting a "boatload of federal money" to spend on poor people's health care "doesn't sound coercive to me."

Conservative Justice Antonin Scalia asked if it was "possible" that the 26 states objecting to the expansion are led by Republican governors. "There's a correlation," said Clement.

Justices were so interested in their sparring with Clement that they went over the half-hour they had allotted each side for the Medicaid dispute and then extended additional time as well to Solicitor General Donald Verrilli.

On the question taken up in the morning session of whether the health care law ought to be killed entirely or partly preserved if the individual mandate is struck down, the government argued that the rest of the 2010 health care overhaul should stay, while those challenging the measure argued the entire law should be thrown out. There was also the question of whether consumer protections should be kept that, for example, bar discrimination on the basis of pre-existing conditions and prevent insurers from increasing premiums on the basis of gender.

Justices said they didn't know how they could sort through which items Congress would have included in the law independent of the mandate.

The policy implications are profound. The insurance industry has warned repeatedly that the health insurance market will be thrown into chaos if the mandate is killed but the consumer protections are kept. The justices alluded to those arguments. The mandate draws in younger, healthier people who broaden the insurance risk pool and without them premiums will rise rapidly for the higher-risk enrollees, insurers contend.

"Mr. Kneedler, what happened to the Eighth Amendment? You really want us to go through these 2,700 pages?" conservative Justice Antonin Scalia asked Deputy Solicitor General Edwin Kneedler. Scalia also said the entire law is tied together because specific provisions were put in to get the votes needed to pass the measure, including, as he termed it, the "what do you call it, Cornhusker kickback." Scalia described that provision as "the constitutional proscription of venality." It was added by the law's supporters to ensure a yes vote from Sen. Ben Nelson, D-Neb.

Aides to Nelson said that the senator's vote was never tied to the provision. Nelson asked Senate leaders to expand the Medicaid funding for all states, and they put in the Nebraska provision as a placeholder, said Jake Thompson, Nelson's communications director.

Scalia's wasn't the only pot shot across First Street Northeast. Kagan said the court normally doesn't "try to figure out exactly what would have happened in the complex parliamentary shenanigans that go on across the street" and instead studies the text of laws.

Justice Sonia Sotomayor forcefully made the argument that if one part of the law was struck down, the rest of the law could stand and that the legislative branch could repair it. "What's wrong with leaving it in the hands of the people who should be fixing it, not us?" she asked. And Justice Elena Kagan said that if the law is stripped of its mandate the rest should stay because "half a loaf is better than no loaf."

Justice Anthony M. Kennedy, considered a swing vote, appeared undecided as to what to do with the rest of the law if the mandate goes. "I'm still not sure what is the test" for how to decide what to sever along with the requirement that all Americans have health insurance, he said.

At one point during the 90 minutes of oral arguments, Justice Stephen G. Breyer held up the three volumes that make up the text of the law. He noted that it includes many provisions beyond the issues at question before the court this week, including breastfeeding and long-term care insurance. "What do you suggest we do other than spending a year redoing all this and arguing it?" he asked. Breyer also proposed that lawyers on both sides attempt to get together and work out between them what parts of the law should be kept.

Justices threw many tough questions about the mandate at Solicitor General Donald Verrilli last week. And while it was not clear at the end of the day how they might rule, Scalia seemed sure that the mandate is in trouble so Congress might as well go back to the drawing board.

"There is no way that this court's decision is not going to distort the congressional process," Scalia said. "Whether we strike it all down or leave some of it in place, the congressional process will never be the same. One way or another, Congress is going to have to reconsider this, and why isn't it better to have them reconsider it ... in toto."

Clement, however, speaking afterward on the courthouse steps, refused to be optimistic. "I would never get in the business of being a prognosticator. Justices are taking this case very seriously. The deliberation process for them has just begun," he said.

Meanwhile, at the White House, a statement was issued expressing confidence in Verrilli after his performance was blasted on left-leaning blogs and by some legal observers. And Josh Earnest, a White House spokesman, told reporters that the Obama administration is not considering contingency plans for the law should the court strike down all or part of it.

The Medicaid arguments found Chief Justice John G. Roberts Jr. appearing skeptical to the states at first, when he told Clement that states have been accepting considerable federal funding since the New Deal era, so it's a little late to complain. "They tied the strings. I don't think they should be surprised the government is pulling them," he said. But he also interrogated Verrilli at length on what the limits might be to the conditions that the federal government places on the states when it extends funding to them. And he said that power has been used in the past by the federal government to "threaten" states into action.

The afternoon session on Medicaid wrapped up three days of oral arguments in the case, and Verrilli urged the justices to let voters decide if Congress did the right thing in passing the law. Clement retorted that it is a "very funny conception of liberty that forces somebody to purchase a health insurance policy whether they want it or not."

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