Mr. Verrilli brought up that Congress was attempting to curb the instance of cost shifting from the uninsured to the insured and taxpayers with the guaranteed issue and community rating policies. Surely, Congress was well within its rights to impose those regulations on insurance companies. However, those policies only work if everyone must purchase insurance, otherwise only the sick choose to purchase insurance, while the healthy stay out of the costly market.
Justice Kennedy broke in with his first question, one which ought to galvanize PPACA opponents: the mandate is assumed to be a step beyond precedent – it’s never been done before – and therefore, doesn’t the government have “a heavy burden” to justify the mandate under the Constitution?
Mr. Verrilli began answering, but was cut off by Justice Scalia’s question, involving the ever-present forced-purchase-of-broccoli example. Mr. Verrilli responded by emphasizing the unique nature of the healthcare market, prompting Justice Scalia to note that unpredictability is the justification for the policy; but where is the constitutional justification?
Justice Kennedy then issued the very direct request that Mr. Verrilli “identify limits on the commerce clause.”
And this is where the distinction between health care and health insurance came into play. According to the government, health care is the commodity in question; health insurance is the means of paying for that commodity. Therefore the justification, Mr. Verrilli said, came from the fact that Congress isn’t forcing the purchase of a commodity, but rather the means of paying for a commodity.
Here, the Chief Justice broke in and noted that forcing healthy people to buy insurance wouldn’t cover their costs, but the cost of others who would use health care. Mr. Verrilli continued to emphasize that in the government’s view, this isn’t a mandate, but a regulation on how to pay for something. The How is insurance; the something is care.
He then began to defend the mandate on Necessary and Proper grounds, but Justice Scalia said that while it may be necessary for Congress’ purpose of reforming the healthcare system, the mandate is not proper. There’s a clue: he will more likely than not vote no on the mandate.
Justice Kennedy then brought up the point that the federal government is saying that it has the duty to force citizens to act, and that has never been seen before. This, he said, is a new relationship between the federal government and individuals. Now, take that with a grain of salt, as it doesn’t mean he automatically believes it to be improper – just new. It sounds as though he’ll have to consider whether the federal government may have this kind of relationship with the individual.
Chief Justice Roberts then questioned the limits of Congress’ potential power to issue mandates. It only applies to insurance, and nothing else? Isn’t it an overreach of the Court’s power to say, Congress, you may safely issue a mandate on insurance using commerce power, but you can’t mandate anything else? What happens the next time a problem arises where everyone participates in a market? Does the Court expand the power again?
The Chief Justice was concerned that once the Court accepts this principle – that everyone participates in the market, and so Congress may regulate all facets of it – then “all bets are off” for limits on federal power.
In defense, Mr. Verrilli wasn’t able to name a constitutional limit to the power; the only one he seemed to have was that Congress wasn’t claiming the power to mandate anything else. What the Chief Justice would likely tack on to that explanation is a big, “yet.”
Mr. Verrilli then tried to defend the mandate under the tax-and-spend power (remember when they said it wasn’t one yesterday?). However, Justice Scalia pointed out that President Obama has always said the mandate is not a tax. Then, Justice Kennedy asked why Congress just didn’t refer to it as a tax in the bill? Mr. Verrilli’s response was essentially, they didn’t need to, since it would still raise revenue. At four minutes to eleven, his time was up, and Paul Clement, attorney for the states, stood before the Court.
Mr. Clement began by noting that there is no limiting principle to the mandate. Justice Sonia Sotomayor then asked if he accepted the premise that Congress mandate health care be paid for by insurance. Sure, said Mr. Clement. But they can’t force individuals to buy that insurance. Justice Kennedy then wanted to know if the federal government considered the healthy, uninsured population an “actuarial reality,” implying a willingness to uphold the law.
Chief Justice Roberts, too, asked some skeptical questions of Mr. Clement, noting that the government says everyone is in the market in this case. Mr. Clement responded by reiterating the government’s distinction between health care and health insurance, and arguing that while everyone may be in the market for the former, the latter is a purchasable commodity, and everyone is not in that market.
The proper question for the Court to address, Mr. Clement said, is does Congress have the power to compel entrance into the market, because that would best serve the regulation of the market? He again noted that not everyone is in the insurance market, and that the case wouldn’t be sitting in Court of Congress had chosen to incentivize entrance into the market, rather than force it.
Mr. Clement argued for half an hour, splitting the second hour with Michael Carvin, attorney representing the National Federation of Independent Business.
When Mr. Carvin took the stand, a number of reporters stood up and left. An hour and a half of the hearing had gone by, and the start of Mr. Carvin’s time, the questions seemed much the same as they’d been for Mr. Clement. Indeed, for about twenty minutes, the four liberal Justices of the court – Stephen Breyer, Sonia Sotomayor, Elena Kagan, and Ruth Bader Ginsburg – peppered Mr. Carvin with queries about the unique nature of the health insurance market, just as they’d predictably done with Mr. Clement.
But one hour and fifty-two minutes into the hearing, Justice Anthony Kennedy deigned to speak again, and his question changed, at the very least, this reporter’s mind about his potential ruling.
He said he found that the “young person who is uninsured” is “uniquely close to participating” in the health insurance market. Translation: I could justify the individual mandate.
His statement hearkens back to a 2005 ruling the Court made on Gonzales v. Raich, in which Justice Scalia wrote a concurring opinion that PPACA proponents see as justification for the mandate. In it, he wrote that the federal government had the right to regulate possession of medical marijuana – which was legal in the state, California – because a person possessing marijuana for noneconomic reasons was just one step away from participating in the market. If Justice Kennedy finds that remaining uninsured is “uniquely close” to market participation, then he may be willing to uphold the mandate on the grounds that this, an intrastate activity, “substantially affects” the interstate market.
No matter what the Justices ultimately decide on the issue – the decision is expected sometime in June – at least one assumption about the healthcare case was wrong: it’s not a slam-dunk for the mandate’s supporters. Five of the Justices clearly saw some glaring legal problems with it. While their line of questioning doesn’t necessarily dictate how they will rule, it certainly reveals what they’ll take into consideration. It seems like a limiting principle is the biggest concern. If they can find one, the law will likely be upheld. If they can’t, then goodbye, individual mandate.