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William Sage On The Supreme Court ACA Arguments Day Two: Where No Law Has Gone Before?



March 28th, 2012

The much-anticipated argument over the constitutionality of the Affordable Care Act’s insurance centerpiece, the minimum coverage requirement or “individual mandate,” took place Tuesday morning.   It was an entertaining but messy affair, with several individuals often speaking at once and answers to questions frequently getting lost in subsequent comments and inquiries.   Analogies buzzed dangerously around the room like mosquitos in search of moist flesh.  Cellphones, burial insurance, broccoli, cars, plagues, wonder drugs, and even gym memberships were hurled by one or another Justice at the three advocates. 

At one point, Justice Breyer asked the lawyer for the National Federation of Independent Business (NFIB) to return his attention to Justice Kagan, who had unsuccessfully attempted to interject a question some minutes earlier.  “I’ve forgotten my question,” Justice Kagan confessed with embarrassment, but her attempt to regroup was immediately stymied by a new foray from Justice Ginsburg.  “See what it means to be the junior justice?” remarked Justice Kagan, feigning hurt.

It didn’t help matters that Solicitor General Donald Verrilli, arguing for the United States, was indisputably off his game.  The critical task in this argument was to simplify the questions but not shortchange the answers.  Especially at the outset, General Verrilli veered in the opposite direction, making direct questions into compound ones and then trailing off without completing his thoughts.

Former Solicitor General Paul Clement argued on behalf of 26 states who sued to invalidate the Affordable Care Act and prevailed in the lower court.  He was calmer and clearer, but made concessions that seemed to undercut his case.  Michael Carvin, arguing for the NFIB, was a model of ideological consistency, but his “just say no” approach was hard to reconcile with the realities of health care reform.

With the important caveat that Supreme Court cases are almost always decided based on the written briefs and almost never decided based on the oral arguments, here are 10 things I think I learned from Day Two:
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  1. Reports of the mandate’s death are greatly exaggerated.  The Solicitor General did not frame the issue well, and lost control of the discussion almost immediately.  But the plaintiff-respondents had little to offer beyond the assertion that commerce could not be coerced.   All in all, the only clearly articulated vote against the law was Justice Scalia’s, though one can assume Justice Thomas will join him.  Justices Breyer, Ginsburg, Sotomayor, and Kagan plainly support the mandate.  Justices Kennedy and Alito seemed cautious but open-minded.  Chief Justice Roberts asked the toughest questions of the government, but appeared to regard the mandate favorably by the end of the session.
  2. This time, there was a cost to being the government.  General Verrilli’s argument had two failings attributable to his public office: excessive caution and an imperfect understanding of the subject matter.  Whereas the Justices appeared to be seeking a “limiting principle” as a matter of law, the SG seemed more worried about how he would argue his next case.  Instead of taking a bold position in support of government power to regulate health care, he disclaimed authority beyond the barest minimum that would justify the mandate.  Ask for less, and you are likely to get it.  At the same time, his facility with general constitutional litigation became a crutch, as he ably cited or distinguished prior decisions of the Court but never offered a robust description of how the health care system actually works.
  3. Congress’s power to tax won’t save the Affordable Care Act.  Throughout the health reform debate, ACA proponents eschewed the T-word (“taxes”), mandating the purchase of private insurance in lieu of collecting and then spending public money, and invoking the IRS only to enforce “penalties.”   Yesterday’s argument included a riff on whether the penalty for not complying with the mandate is really a constitutionally valid tax even if it is labeled otherwise in the statute.  But it remains a stretch – particularly for a Court dominated by “textualists” – to conclude that the mandate itself is within the taxing power just because the penalty might be.  As a result, it appears that the mandate will stand or fall solely on whether it is authorized by the Commerce Clause.
  4. The relationship between ends and means is important.  It is clear that the objectives of the ACA, including universal health coverage, are constitutionally valid.  But uncertainty surrounds the means Congress chose to accomplish them.   Several Justices and even the plaintiffs’ lawyers admitted the existence of alternative approaches that are constitutional.  If that is true, as Justice Kagan and others suggested, then perhaps the Court should defer to Congress on choice of means and not attempt judicial micromanagement.   But the question is ultimately one of mood, most likely Justice Kennedy’s, who noted that the availability of alternatives “cuts both ways.”  If he concludes that the government is making modest adjustments to a constitutionally preferable approach in order to improve administrability and regulatory effectiveness, he is likely to accept that.  If it seems, however, that the government is pursuing constitutional ends through unconstitutional means for political advantage, his vote may go the other way.
  5. Health care reform lies at the bottom of the slippery slope.  “Obamacare” was portrayed in the lower courts as the harbinger of an even more massive expansion of federal power, ultimately compromising individual liberty.  These sentiments were merely vestigial in the Supreme Court, however, aired with appropriate “nanny state” rhetoric involving exercise and green vegetables but not really taken seriously.  States may have plenary police powers that Congress lacks, but the direst consequence of upholding the ACA now seems simply that the ACA is upheld.  This is good news for the government.  If the worst case scenario is that the federal government will even more expansively regulate health care, then the Court only needs to get comfortable that health care is “commerce” that can legitimately be regulated.
  6. Health insurance and health care are in the same stream of commerce.  If indeed this is true, it would seem the government wins.  Much of the disagreement during argument revolved around whether health insurance was a distinct market from health care or just a means of payment for health care.  This is important to the case because voluntarily uninsured individuals do not participate in insurance commerce, but almost always participate in health care commerce (leaving aside the possibility, raised by Justice Kagan, of a later “as-applied” challenge to the law).  Chief Justice Roberts seemed persuaded that one large market for health care and health insurance exists, although he displayed some reservations about mandating the purchase of insurance benefits that particular individuals would never be in a position to need.  More importantly, the plaintiffs conceded that, if an uninsured individual seeks care in a hospital or emergency department, the government may force that individual to purchase insurance because he is no longer “inactive.”  Hearing this, Justice Kagan suggested that a mere matter of timing should not have independent constitutional importance, but there is a deeper logical problem.  When an uninsured individual seeks care, he is still not active in health insurance unless those functions exist in the same stream of commerce.  (In today’s health care system, moreover, there are many additional connections between health insurance and health services, and many reasons to believe that universalizing coverage will hone insurers’ incentives to improve the quality and efficiency of health care delivery.   Unfortunately, nobody ever seems to have explained this to the Supreme Court, or even to the lower courts that heard constitutional challenges to the ACA).
  7. Health care commerce is largely of government’s own making.  Justices on both ends of the Court’s political spectrum seemed to agree that the government had created the circumstances that made the mandate desirable as a health policy intervention.  Justice Alito did so skeptically, mentioning EMTALA as the principal reason why uninsured individuals receive hospital care without payment and shift costs to those who are insured.  Justice Breyer, the Court’s resident regulatory theorist, did so less accusingly, noting that federal tax policy, Medicare, Medicaid, and a host of other regulatory initiatives have linked health care to health insurance and creating a massive stream of commerce that Congress now seeks to restructure and improve.  These factors also favor upholding the mandate as integral to a larger regulatory scheme (even though General Verrilli goofed during argument and seemed to reject that suggestion), especially because the other laws are longstanding and cannot be portrayed as strategic devices to bootstrap the ACA’s constitutional validity.
  8. The Court understands adverse selection.  Score one major victory for health policy wonks.  Title I of the ACA solves the problem of uninsurability by declaring everyone to be insurable (i.e., guaranteeing issue and renewal, banning pre-existing condition exclusions and medical underwriting, and limiting premium differences).  This only works if everyone is insured, hence the mandate.  Otherwise, significant risks of adverse selection arise.  Based on the argument yesterday, Justice Sotomayor and others clearly understand this, which is a significant advance in health policy awareness from what was displayed in most of the district and circuit court opinions (regardless of where they came out).
  9. The Court isn’t as clear about redistribution.   Justice Ginsburg articulated the view that uninsured individuals are not inactive in health insurance markets because insured individuals pay for their care.  Counsel for the plaintiff-respondents countered that most of these individuals are healthy and do not require care, and therefore impose no cost on the insured.  Call that debate a draw.  The respondents’ lawyer went farther, however, and claimed that the mandate coerced a wealth transfer from healthier individuals because they would be charged much more than their actuarially predicted share of medical expenses.  The obvious response was never offered, however.  The insurance that they would be buying under the mandate would be renewable indefinitely at the same relative premium without underwriting, making it considerably more valuable than a current policy of experience-rated insurance catering only to the young and healthy.
  10. Justice Scalia comes from another planet.  OK, this one is just for fun, but I have three reasons for suggesting it.  First, he seems to think that health insurance markets work just fine.  If you want guaranteed issue of coverage but a mandate is unconstitutional, he offered reassuringly, you just have to let insurance companies charge sick people a whole lot more.  Second, he insisted on bringing up hunting licenses in a case that, mercifully, had nothing to do with guns.  Third, he proved his Vulcan ancestry when he summed up General Verrilli’s not always logical but very human rhetoric in one word: “Extraordinary.”  Leonard Nimoy could not have said it any better.

Editor’s note: William Sage signed on to two amicus briefs filed by health law professors: one supporting the constitutionality of the ACA’s minimum coverage provision organized by Wendy Mariner and Mark Hall, and one supporting the constitutionality of the statute’s Medicaid expansion organized by Kevin Outterson. For more on the debate over the constitutionality of the Affordable Care Act’s minimum coverage requirement — or individual mandate — and day two of the Supreme Court’s oral arguments concerning the ACA, see additional Health Affairs Blog posts by Marc RodwinAlice Noble and Mary Ann Chirba, Sara Rosenbaum, Timothy Jost, and Wendy Mariner.

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3 Trackbacks for “William Sage On The Supreme Court ACA Arguments Day Two: Where No Law Has Gone Before?”

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1 Response to “William Sage On The Supreme Court ACA Arguments Day Two: Where No Law Has Gone Before?”

  1. Linda Bergthold Says:

    The Health Affairs pieces on the Supreme Court debate are extremely valuable for a larger audience. So if you are reading these blogs, please email them around to your colleagues and post on twitter as well. The blogs by Jost, Mariner, Rosenbaum and Sage are just about the best I’ve read anywhere, but it is disappointing to see the low number of tweets and comments.

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