Healthcare Law Seen in Jeopardy

Supreme Court justices hint they may strike down healthcare reform.

U.S. Supreme Court justices hinted they might strike down President Barack Obama’s health-care law as the court’s Republican appointees suggested Congress went too far by requiring Americans to obtain insurance.

On the second of three days of arguments in the historic case, justices’ questions indicated they might split 5-to-4, with the court’s five Republican appointees banding together to topple the law.

Justice Anthony Kennedy said the measure is unlike others the court upheld previously because it tells individuals they “must act.” Kennedy, who most often occupies the court’s ideological middle ground, said, “That changes the relationship of the government to the individual in the very fundamental way.”

The law would extend coverage to 32 million people and revamp an industry that accounts for 18 percent of the U.S. economy. The court hasn’t overturned a measure with such sweeping impact since the 1930s, when it voided parts of Franklin D. Roosevelt’s New Deal, the package of economic programs enacted in the 1930s in response to the Great Depression.

The court probably would rule in late June, months before the November election. A ruling against the measure would give ammunition to Obama’s Republican challengers, who have said the law should be repealed.

The Standard & Poor’s Supercomposite Managed Health Care Index of 12 insurance companies fell 0.6 percent at 1:37 p.m. New York time, even as the broader S&P was little changed.

The Obama administration needs the vote of at least one of the five Republican appointees on the nine-member court to uphold the law.

Heading into today’s session, Chief Justice John Roberts and Justices Antonin Scalia, Samuel Alito and Kennedy were the most likely candidates, given their records. All four aimed questions at U.S. Solicitor General Donald Verrilli, who argued in the law’s defense.

Roberts said the health plan would “require people who are never going to need pediatric or maternity services to participate in that market.”

Roberts and Kennedy also questioned the arguments of two lawyers challenging the statute.


‘Huge Subsidy’

Young people are “uniquely, proximately very close to affecting the rates of insurance and the cost of providing medical care in a way that is not true in other industries,” Kennedy told Michael Carvin, the lawyer for a business trade group. “That’s my concern in the case.”

Alito called the insurance requirement and penalties a “huge subsidy” from young, healthy people who don’t want coverage to those who need a lot of health care.

Verrilli, the Obama administration lawyer, contended that Congress can require people to buy insurance under its constitutional power to regulate the interstate health-care market.

People who don’t buy health insurance and can’t afford to pay for their care are guaranteed emergency-room treatment when they need it, Verrilli said. People who have insurance are subsidizing them, he said.

Scalia indicated he was skeptical.

“The federal government is not supposed to be a government that has all powers,” Scalia said. “It’s supposed to be a government of limited powers.”

He added, “What is left if the government can do this?”

The fifth Republican-appointed justice, Clarence Thomas, asked no questions, as is his practice. He has previously voted to put tight limits on Congress’s power under the commerce clause.

Justice Sonia Sotomayor suggested the federal government can require people to buy insurance ahead of time “because you can’t buy it at the moment you need it.”

The justices questioned Verrilli on whether Congress could force people to buy things such as food or burial insurance.

“Can the government require you to buy a cell phone” because someone may need to call for emergency fire or police help, Roberts asked.

Justice Ruth Bader Ginsburg rejected Alito’s concern that healthy people would have to subsidize the sick.

“That’s how insurance works,” she said. Later, she said, “People who don’t participate in this market are making it much more expensive for the people who do.”


Republican Challengers

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

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.

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. The justices’ opinions in previous cases only hint at how they may apply it to the insurance requirement.

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. Congress has never before required people to purchase something, they say.

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, they say.

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 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 pre-existing conditions and charge them the same rates as other policyholders, the government says.

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




Bloomberg News


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