Health Law Centerpiece at Risk

High Court today hears argument against mandate for universal health coverage.

The Obama administration today will defend a requirement that Americans obtain insurance or pay a penalty -- the core of the president’s health care overhaul -- in a Supreme Court case central to the Republican campaign to take over the White House.

A group of 26 states will say that Congress exceeded its authority in approving the mandate, as the justices hear their second of three days of arguments. The government, defending the president’s signature legislative victory, will contend that Congress can require people to buy insurance under its constitutional power to regulate the interstate health-care market.

During yesterday’s opening session, several justices suggested they will reject an argument that they can’t consider the case until the penalty is imposed in 2015.

Today, justices may signal whether they’re willing to overturn the insurance requirement or other parts of the law, which would extend coverage to 32 million people and revamp an industry that accounts for 18 percent of the U.S. economy.

The last time the court rejected a measure with such sweeping impact was when it voided parts of Franklin D. Roosevelt’s New Deal, the package of economic programs in the 1930s passed in response to the Great Depression.

If the court throws out Obama’s insurance mandate, that “would constitute the most significant federalism ruling since the 1930s,” said Daniel Conkle, a constitutional law professor at Indiana University’s Maurer School of Law in Bloomington.

The justices probably will issue a ruling by late June, less than five months before the election.

Obama’s Republican challengers all oppose the measure and say they want to undo it. Former Pennsylvania Senator Rick Santorum appeared outside the court yesterday and attacked Mitt Romney, who signed a similar state law when he was governor of Massachusetts. Romney is the “worst person” to debate the health law with Obama, Santorum said.

Americans for Prosperity, a Tea Party-affiliated group opposed to the law, plans a rally near the court today. Protests in Washington on both sides began during the weekend.

Yesterday’s opening arguments were on a question that could derail the case: whether the penalty for failing to get insurance amounts to a tax. An 1867 law blocks lawsuits over taxes that haven’t been imposed.

 

Ready to Rule

Justices including Stephen Breyer and Ruth Bader Ginsburg suggested they didn’t view an 1867 law as barring them from ruling this year. Ginsburg questioned whether health-care penalties would be taxes.

“This is not a revenue-raising measure,” Ginsburg said. “If it’s successful, nobody will pay the penalty and there will be no revenue to raise.”

The six hours of arguments spread over three days are the most the court has heard in a case in 44 years.

Tomorrow, the last day, the justices will consider what should happen to the rest of the law if they invalidate the insurance requirement. The court also will take up whether the law, by expanding the Medicaid program, unconstitutionally coerces states into spending more on health care for the poor.

The fate of the insurance requirement will turn partly on the court’s interpretation of the constitutional provision that lets Congress regulate interstate commerce. Justices’ opinions in previous cases only hint at how they may apply it to the insurance requirement.

The justice who most often occupies the court’s ideological middle ground, Anthony Kennedy, has signed opinions pointing in both directions on the commerce clause. Kennedy and three other Republican appointees -- Chief Justice John Roberts and Justices Antonin Scalia and Samuel Alito -- are potentially in play, based on their past opinions.

The government says that every American is already part of the interstate market for health-care and that the mandate requires them to get coverage to pay for treatment they’ll eventually need. The challengers say Americans who fail to buy insurance can’t be regulated because they aren’t engaged in commerce.

“I’m sitting at home in my living room,” said Michael Carvin, the lawyer who will argue on behalf of a business trade group, at a debate last month in Washington sponsored by Bloomberg Law and Scotusblog, which covers the court. “I’m not buying insurance. I’m not engaged in commerce -- local, intrastate, interstate. So how can they force me to enter into the stream of commerce?”

 

Forced Buying

The challengers say Congress has never before required people to purchase something.

Upholding the mandate, opponents say, would mean Congress could force consumers to buy any product for the sake of stimulating the economy. Instead of providing cash incentives to buy new cars and boost the auto industry, as the government did in 2009, Congress could have required everyone above a certain income level to buy a new car, says Paul Clement, the Washington lawyer who will argue on behalf of the 26 states.

That would have been a “much more direct way to accomplish that objective,” Clement said.

The Obama administration and its allies say the auto and health-care industries aren’t the same. Uninsured people consumed $118 billion in health-care services in 2008 and paid only 37 percent of those costs, the administration says. Those costs are passed from care providers to insurers to policyholders, ultimately increasing the average premium for insured families by $1,000 a year, the government says.

“The automobile industry is really different,” said Neal Katyal, formerly Obama’s acting solicitor general, who argued for the administration on health care at the lower court level. “That’s not a situation in which you can show up at the car lot, drive off with the car and stick your bill to your neighbor. That’s what’s going on in the health-insurance market.”

The government also says the individual mandate will keep policy premiums in check by giving insurers millions of new, low-cost customers. Otherwise, prices would soar because the law also requires insurers to accept applicants with preexisting conditions and charge them the same rates as other policyholders, the government says.

In addition to the commerce power, the federal government points to a constitutional provision that lets Congress enact laws “necessary and proper” for carrying out its authority as explicitly listed in the Constitution.

The court has used that clause before. In 2005, Scalia relied on the necessary-and-proper clause when he voted to allow federal prosecution of people who use locally grown marijuana for medicinal purposes. Five other justices reached a similar conclusion, while focusing more on the commerce clause.

The administration will be represented today by its top Supreme Court lawyer, U.S. Solicitor General Donald Verrilli. He will also argue that Congress’s constitutional power to impose taxes creates an independent source of authority for the mandate and penalty. No lower court judge has endorsed that argument.

Of the four federal appeals courts to rule, two upheld the law, one declared the mandate unconstitutional and the fourth said the Anti-Injunction Act made a judicial review premature.

The issues surrounding the mandate go to “the first principles of our constitutional experiment,” said Rick Garnett, a constitutional law professor at Notre Dame Law School in South Bend, Indiana. “Even if the justices uphold the health-insurance mandate, look for them to remind us that the boundaries on federal regulatory authority remain, and matter.”



Bloomberg News

 

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