Today’s Bottom Line

By all accounts, today was not a good day at the Supreme Court for proponents of the Patient Protection and Affordable Care Act (ACA).  Under relentless questions from the conservative-leaning Justices, the government’s attorney, Donald B. Verrilli, Jr. struggled to defend the law’s individual mandate. 

Observers inside the courtroom commented that the Justices who typical lean liberal seemed poised to uphold the law, but the commentators seemed dubious the government would be able to attract the necessary fifth vote to uphold the law.  It did not appear the government was able to provide sufficient justification for the mandate--beyond arguing that health care is different from any other domestic program--to attract support from one or more of the conservative Justices.

As a caution, the nature of the questioning may not predict how the Justices will vote.  Even so, it seems hard for the Obama administration to be optimistic about the decision.

Overview of the Issues

The Court addressed two issues today.  First, did Congress exceed its authority under the Commerce Clause when it mandated that individuals must purchase health insurance or pay a penalty?  Second, was the ACA within Congress’s authority under the Necessary and Proper Clause, i.e., that Congress can enact laws that are necessary and proper for meeting its constitutional responsibilities? Since the New Deal, the Supreme Court has given Congress wide authority to regulate almost any activity that affects interstate commerce.

(Most observers agree that the issue would be very different if a state, such as Massachusetts, mandated insurance coverage.  For instance, many states mandate that drivers purchase auto insurance.)

The case encapsulates two of the enduring challenges in American life — the balance of power between the states and the federal government, and the tension between governmental intervention and individual liberty.  The legal issue is whether Congress has the authority to require individuals to participate in commercial activity.  But at its core, the issue is about the extent of the federal government’s power over our lives. 

To its defenders, the individual mandate is an appropriate and necessary response to the health care crisis.  Because everyone needs medical care at some point, they say it is essential that individuals participate so that the costs of medical care are shared across a large pool of patients.  Otherwise, when uninsured individuals require care, the cost is often passed onto are insured and all taxpayers. 

To its critics, the mandate far exceeds Congress’s power to tell citizens what to do in their personal lives.  Congress has never before compelled people to buy a product that they might not want, they argue, and to do so would be a fundamental denial of liberty.  If the mandate is found to be constitutional, what are the limits to what Congress could enact?  Could Congress tell us what food to eat or what cars to buy?

How the Oral Argument Proceeded

The Solicitor General argued first.  From the outset, he faced relentless and skeptical questions from the conservative Justices on the Court (Roberts, Scalia, Alito, Thomas and Kennedy).  Most of the questioning focused on what the ACA’s opponents believe is its core legal deficiency—the absence of any limiting principle to congressional authority.  Verrilli struggled to articulate a clear principle that would limit the reach of the Commerce Clause. 

According to the ACA’s opponents, the mandate forces individuals to enter commerce (i.e., buy health insurance) so that Congress can then regulate it.  Take, for example, the following exchange (from the transcript) after Justice Breyer supplied a rationale for the mandate. 

JUSTICE KENNEDY:  Can you identify for us some limits on the Commerce Clause?

GENERAL VERRILLI: Yes. The rationale purely under the Commerce Clause that we're advocating here would not justify forced purchases of commodities for the purpose of stimulating demand.

JUSTICE KENNEDY: But why not? If Congress says that the interstate commerce is affected, isn't, according to your view, that the end of the analysis?

GENERAL VERRILLI: No….Here Congress is regulating existing commerce, economic activity that is already going on, people's participation in the health care market, and is regulating to deal with existing effects of existing commerce.

CHIEF JUSTICE ROBERTS: You say health insurance is not purchased for its own sake, like a car or broccoli; it is a means of financing health care consumption and covering universal risks. Well, a car or broccoli aren't purchased for their own sake, either. They are purchased for the sake of transportation or in broccoli, covering the need for food. I don't understand that distinction.

Although the more liberal Justices (Breyer, Ginsburg, Sotomayor, and Kagan) tried to reframe the government’s argument to demonstrate the differences between health care and other domestic markets, none of the conservative Justices seemed convinced.  For instance, Justice Scalia and Chief Justice Roberts questioned Ferial as to whether the ACA unduly intrudes into matters traditionally left to the states.  Justice Kennedy then expressed concern that the ACA forces individuals to enter commerce, essentially adopting the reasoning that the act goes beyond the enumerated powers of the federal government.

An interesting thread of the questioning was how to define the market.  Is the relevant market health care delivery or health insurance?  In the following exchange, Justice Kagan asked Paul D. Clement, arguing on behalf of the states challenging the ACA about the market.

JUSTICE KAGAN: But, of course, the theory behind, not just the government's case, but the theory behind this law is that people are in this market right now, and they are in this market because people do get sick, and because when people get sick, we provide them with care without making them pay.

And it that would be different, you know, if you were up here saying, I represent a class of Christian Scientists. Then you might be able to say, look, you know, why are they bothering me. But absent that, you're in this market. You're an economic actor.

MR. CLEMENT: Well, Justice Kagan, once again, it depends on which market we're talking about. If we're talking about the health care insurance market .

JUSTICE KAGAN: Well, we are talking about the health insurance market, which is designed to access the health care market.

MR. CLEMENT: And with respect to the health insurance market that's designed to have payment in the health care market, everybody is not in the market. And that's the premise of the statute, and that's the problem Congress is trying to solve. And if it tried to solve it through incentives, we wouldn't be here; but, it's trying to solve it in a way that nobody has ever tried to solve an economic problem before, which is saying, you know, it would be so much more efficient if you were just in this market .

JUSTICE KENNEDY: But they are in the market in the sense that they are creating a risk that the market must account for.

Later, Chief Justice Roberts returned to the market issue in questioning Michael A. Carvin, representing NFIB.  The Chief Justice suggested that since the New Deal, the Court has allowed Congress wide latitude in regulating markets.  “The government’s position is that almost everybody is going to enter the health care market…”  Carvin responded that “…the health insurance market is different than the health care market.” 

By confining the market definition to health insurance, both Carvin and Clement aimed to shift the focus away from the reality that everyone will eventually need health care, and back to whether Congress has the authority to require individuals to purchase health insurance.

Observations

Today’s argument was a classic demonstration of the craft of oral argument.  The Justices asked penetrating questions and raised difficult hypotheticals that the attorneys fielded with professional skill and varying degrees of effectiveness.  What occurred inside the Supreme Court today is a model for reasoned analysis, challenging questions, and the overall seriousness of purpose that defines the Supreme Court.

What was most striking to me was that the questions and arguments were not as predictable as I had anticipated.  Some of the hypothetical questions (such as Justice Alito asking whether the government could require individuals to purchase burial insurance or Justice Roberts asking whether the government could require individuals to purchase cell phones) seemed to throw the Solicitor General off-stride.

The questions from the usually conservative Justices seemed to focus on the broader philosophical concerns underlying the extent of congressional power, while the questions from the usually liberal Justices focused more on the specific deficiencies in the health care market that the Act was designed to rectify.  Verrilli never seemed to take or retain control of his narrative, while Clement never had to move far away from his core points.

Another striking feature of the proceedings was the different way that the two sides think about health care and the implications of the ACA.  To be sure, the policy implications were not front and center, and beyond the scope of this post.  But an important follow-up analysis will be to parse which side has the better understanding of how health care markets actually operate.  Suffice it to say that both sides can’t be right!

Looking back at the questions to think about that I posed in yesterday’s post, I think we did learn things that help us understand the issues in a new way and the oral arguments revealed both questions and answers that, after reflection, are likely to offer new insight about the limits of congressional authority.  In some ways, the arguments actually lived up to the hype.  Both sides are likely to be uncertain as to how the Court will rule.

Given the initial reaction from people in the courtroom, the stakes just got higher for tomorrow’s argument on severability. That is, if the individual mandate is struck down, does it doom the entire law?

Linda Greenhouse, probably the nation’s most perceptive legal journalist, wrote in the New York Times last week that there really is only one side to the argument.  Based on 75 years of clear precedent, she wrote, “…the notion that Congress somehow lacks the power to regulate, restructure or basically do whatever it wants to the health care sector…is far-fetched on its face.”  

Although nothing I heard from today’s hearing challenges that assessment, opponents certainly made a vociferous case for the Justices to ponder that the ACA is one step too far.  One potential way that the law may still survive is for either Justice Roberts or Kennedy to decide that the government’s definition of the health care market is correct and that the mandate is an acceptable regulatory intervention.

The ultimate question for any Supreme Court oral argument is whether it changed any votes.  We'll probably never know the answer to that question.  But based on my preliminary assessment, it seems likely that the dynamic now is different from what it was entering these three days of historic oral arguments.  Earlier, I expected the act to be upheld by a 6-3 or 7-2 margin.  That seems unlikely now.  At best, I think the government can hope to eke out a narrow 5-4 victory. 

Peter Jacobson is president of the Public Health Law Association, professor of health law and policy and director for the Center for Law, Ethics, and Health at University of Michigan’s School of Public Health. He received his law degree from the University of Pittsburgh School of Law in 1970, and a Masters in Public Health from UCLA in 1988. Before coming to the University of Michigan, he was Senior Behavioral Scientist at RAND from 1988 to 1996. His current research interests focus on the relationship between law and health care delivery and policy, law and public health systems, and health care safety net services.