Health Reform Faces Intense Supreme Court Scrutiny

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March 27, 2012 — There was high drama at the high court today.

Attorneys for the Obama administration and opponents of the Affordable Care Act squared off in the Supreme Court this morning over the law’s most controversial provision: the mandate to obtain health insurance coverage or pay a penalty.

U.S. Solicitor General Donald Verrilli Jr., the attorney for the federal government, told the justices that the health care reform law merely regulates the timing of how Americans purchase health care. The mandate, Verrilli said, is acceptable under the Constitution’s Commerce Clause, which gives lawmakers the power to regulate commerce.

Attorneys for officials from 26 states and the National Federation of Independent Business, which are challenging the Affordable Care Act, described the mandate in more dire terms, saying it is unprecedented and unconstitutional for Congress to force someone to buy something and penalize them if they don’t.

The Broccoli Argument

Justice Stephen Breyer called that scenario of unlimited federal power the “broccoli possibility.” That phrase refers to the argument that the individual mandate could open the doors for Congress to require Americans to eat broccoli.

The humor of a broccoli mandate aside, Justice Anthony Kennedy — the potential swing vote on the court — said the case has momentous implications.

“Here the government is saying that the federal government has a duty to tell the individual citizen that it must act,” said Kennedy, “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.”

‘Can You Create Commerce in Order to Regulate It?’

The arguments on each side of the legal battle are familiar ones. What was different today was how the justices forced the attorneys to defend their positions from their opponents’ strongest attacks.

Within a few minutes of Verrilli’s presentation, Justice Kennedy asked him, “Can you create commerce in order to regulate it?”

Verrilli replied that the act does not create commerce, but rather regulates an existing health care marketplace that at one time or another will include everyone, whether they like it or not.

The health care market cries out for regulation, Verrilli said, because the cost of the uncompensated care received by the uninsured, put at $43 billion a year, is shifted to the public in terms of higher insurance premiums. The mandate cures that problem, he said.

Without it, Americans could wait until they were ill before they bought insurance. This group of sick and expensive insurees would force insurers to raise premiums for a shrinking number of customers, which Verrilli said would wreck the private insurance industry. In contrast, the mandate puts healthy and sick alike in the insurance risk pool.

Verrilli noted that his opponents in the case concede that Congress has the power to regulate the purchase of health care at the point of sale — when they need it.

But what the health reform law does is only require advance purchase of something people inevitably need at some unknown point. Such a requirement, he said, does not create a precedent for mandates to buy cars or cell phones — or broccoli.

Several justices pounced on Verrilli’s argument that Congress can regulate the health care market because everyone is in it. Justice Samuel Alito Jr. asked why the government should not require everyone, including the young and healthy, to obtain burial insurance.

“Most people are going to need health care,” said Alito. “Almost everybody. Everybody is going to be buried or cremated at some point. What’s the difference?”

Verrilli replied that the burial industry is not plagued by billions of dollars in cost shifting.

Opponents of Law Take Heat, Too

Paul Clement, the attorney for the 26 state officials, and attorney Michael Carvin, representing the National Federation of Independent Business, also got sharp questioning from the justices.

Clement said that the individuals improperly compelled to purchase health care coverage are largely the young and healthy, who will subsidize the cost of caring for sicker Americans. 

“Those people are essentially the golden geese that pay for the entire lowering of the premium,” said Clement. His ally, Carvin, said this forced subsidy was a “fundamental problem” with the law.

Justice Ruth Bader Ginsburg suggested that societal subsidies in themselves have passed constitutional muster — witness the Social Security program created during the Roosevelt administration.  The government began taxing everyone so that the elderly could get a check in the mail.

“It was a big fuss about that in the beginning because a lot of people said … they’re forcing me to paying for this Social Security that I don’t want,” said Ginsburg. “But that’s constitutional.”

Activity vs. Inactivity

Carvin continued to make the point that the law oversteps Congress’ Commerce Clause authority by compelling inactive individuals to engage in commerce. He dismissed the notion that everyone is automatically an active participant in the health care marketplace.

“If being born is entering the market, then I can’t think of a more [absolute] power Congress can have, because that literally means they can regulate every human activity from cradle to grave,” said Carvin.

Up Next

The Supreme Court wraps up its oral arguments on the health reform law tomorrow with a morning session on whether striking down the individual mandate means the entire law must be voided, and an afternoon session on the constitutionality of Medicaid expansion under the law. The justices will issue a ruling sometime before July.

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