Sparks Fly Over Insurance Mandate at Supreme Court

Posted March 27, 2012 at 12:44pm

Updated: 3:42 p.m.

The Supreme Court’s conservative bloc and swing vote Justice Anthony Kennedy expressed deep skepticism today about the individual mandate at the heart of President Barack Obama’s health care overhaul, raising the hopes of top Republicans that they will vote to overturn it.

The questioning from Kennedy in particular cheered the GOP and had Democrats nervously trying to comfort themselves that the questions a justice asks are not necessarily related to how a justice will ultimately rule.

Early on Kennedy challenged Solicitor General Donald Verrilli Jr., who was arguing for the Obama administration, over whether the mandate represented an unprecedented use of federal power.

“Assume for a moment this is unprecedented,” Kennedy said, regarding the requirement that individuals take an affirmative action to buy a product.

“Do you not have a heavy burden to show authorization under the Constitution?” he asked.

He later added, “The question is: Are there any limits on the Commerce Clause?”

Kennedy seemed troubled by requiring people to affirmatively buy a product, noting that typically under the law, citizens are not required to take an action — even to rescue a blind person about to be struck by a car. Requiring people to take an action “changes the relationship of the federal government to the individual in a very fundamental way,” he said.

Verrilli said that there is ample authorization in the Constitution, both under the Commerce Clause and under the government’s taxing powers. And he noted the unique nature of the health care argument — that all or nearly all people almost inevitably procure health care services.

Justice Antonin Scalia scoffed at that argument. He posited that everybody is in the market for food, therefore you can make everybody buy broccoli, adding later that the government could force people to buy cars to lower the cost for everyone else.

Justice Ruth Bader Ginsburg rebutted Scalia, however, in one of the many exchanges between the liberal and conservative justices. “Unlike food or any other market … when disaster strikes, you may not have the money” to pay for health care, she said.

Verrilli said the Commerce Clause does have limits and that the government could not require people to buy a commodity to stimulate demand. But he said that everyone is effectively already in the health care market because they will eventually need care.

Chief Justice John Roberts probed both sides of the debate. He asked Verrilli: “Can the government force you to buy a cell phone” to make it easier for rescue services to find you?

Justice Samuel Alito asked whether the government could force everyone to buy burial insurance because everyone dies.

Verrilli said that health insurance was different because of the massive cost-shifting that takes place when uninsured people use the health care system and are unable to pay for it.

Alito also questioned Verrilli about the fact that many of the people subject to the mandate will end up paying much more for insurance than their actuarial risk. “The mandate is forcing these people to provide a huge subsidy to the insurance companies,” he said, adding that it requires them to buy insurance that will be consumed by someone else.

But Ginsburg interjected: “That’s how insurance works.”

Verrilli contended that without the mandate, the government would not be able to require insurance companies to end discrimination based on pre-existing conditions. States that have done so without a mandate have made the problem worse, causing premiums to soar as people wait until they get sick to purchase.

Verrilli said the court has a duty to rule that Congress has the authority to regulate a national problem that has more than 40 million people without health insurance and to defer to Congress on the means in which to do so.

The justices also sparred over whether the mandate was a tax or not. Scalia noted that “the president didn’t seem to think so.”

Paul Clement, who is representing 26 states challenging the law, called the younger, healthier people who are typically uninsured the “golden geese” who pay to lower everyone else’s health insurance premiums even though most of them wouldn’t get sick that year.

And Michael Carvin, representing the National Federation of Independent Business, warned that if the court allows the mandate to stick, there would be no limit to what Congress could force people to do.

But Roberts challenged that, noting the government’s contention that everyone is already in the health care market and the government is merely regulating when they have to pay for it.

Clement sought to steer Roberts to the market for insurance, which he said was a separate question than the market for health insurance itself.

That prompted a rebuke from Justice Elena Kagan. “We don’t get insurance so we can stare at our insurance certificate,” she said.

Ginsburg also got to what she thought was the core of the case, that people now are free riders on the system. “People are getting cost-free health care and the only way to deal with that is to make them pay earlier,” she said.

The justices had an audience heavy with history, including Rep. John Dingell (D-Mich.), the dean of the House who had been pushing universal health insurance for decades; Senate Finance Chairman Max Baucus (D-Mont.), the principal author of the bill; Senate Minority Leader Mitch McConnell (R-Ky.) and more than 15 other Members of Congress, as well as Attorney General Eric Holder, Health and Human Services Secretary Kathleen Sebelius and top White House aide Valerie Jarrett.

McConnell said after the arguments that he was heartened by the skeptical questioning from the conservative justices, leading him to hope that they will overturn the law. But Sen. John Kerry (D-Mass.), who was also in attendance, warned against reading too much into the questioning, given that the justices often play devil’s advocate.