By: Abby Schopick
From March 26 through March 28, the Supreme Court heard arguments on four distinct issues related to President Obama’s Health Care Reform plan, officially known as the Patient Protection and Affordable Care Act (PPACA). On the first day the Court heard arguments related to the Anti-Injunction Act. The Court heard arguments as to whether the penalty associated with failure to purchase insurance is a penalty or a tax, and if it is a tax, whether this case can even be heard before the tax has been paid. On the second day, the Court heard arguments on the most controversial issue of the case, the constitutionality of the individual mandate. This argument focused on whether Congress exceeded its power by “compel[ing] people to enter commerce to create commerce essentially in the first place.” (Opening Statement of Paul Clement: http://www.npr.org/2012/03/27/149465820/transcript-supreme-court-the-health-care-law-and-the-individual-mandate). Two issues were heard on the third, and final, day of arguments. On the third day, the Court heard arguments on whether the bill is severable. They also heard arguments as to whether the new Medicaid expansion provisions are coercive by requiring states to comply or lose federal funding. While no one can know for sure how the Court will rule on these issues, based on the comments made by the Court, there is reason to fear that some Justices will decide based on politics, not law, and overturn at least the individual mandate.
The first day of arguments featured discussion of the Anti-Injunction Act. The argument that the Anti-Injunction Act prevents a challenge to PPACA was so unpopular that neither the Solicitor General, arguing for the government, nor Paul Clement, arguing for the plaintiffs, were willing to make the argument. The Court had to appoint counsel to make the argument. It appeared, based on the Court’s choice of questions, argument that PPACA will survive the Anti-Injunction Act argument.
While the Justices all seemed to agree on the Anti-Injunction Act, that was not the case for any of the other three issues. The severability clause, which is standard in most legislation, was left out of this massive legislation. Paul Clement argued that if any portions of the bill that are considered essential (i.e. the individual mandate), or any portion of PPACA that was essential to the passage of the bill (i.e. the state specific agreements made to secure enough votes for passage) are struck down by the Court, especially the Individual Mandate, that the entire bill needs to fail on severability. Even the government has, at times, said that the bill is not realistic without the individual mandate. Therefore, the plaintiffs argue that it is not the Court’s place to overcome Congress’s will, which does not include the ability to sever the legislation.
Deputy Solicitor General Edwin Kneedler, arguing for the government, argued that courts have always ruled as narrow as possible when striking down legislative actions. Mr. Kneedler argues that it would be irrational to strike down the entirety of the bill simply because one portion is deemed unconstitutional. He pointed to the fact that although the questioned provisions, the individual mandate and the Medicaid expansion, have not gone into effect yet, there are parts of PPACA that are already in effect. He states that there is no reason that provisions that are clearly unaffected by the provisions that might be considered unconstitutional should be struck down just because of an oversight by Congress that clearly was not what was intended.
The Court, on the other hand, did not seem overly convinced by Mr. Kneedler’s arguments. Justice Alito looked to an amicus curie brief submitted to the Court by economists. He stated that the economists’ brief looks at the private insurance industry, which is looking at 10 year costs of about $700 billion due to PPACA. This expenditure is supposed to be partially offset by revenue from the individual mandate. Justice Alito questions how this provision could still stand even without the offsets from the individual mandate. Unfortunately, Mr. Kneedler did not seem to have a real answer to Justice Alito’s questioning besides to state that the Court should not be looking at budgetary concerns. In addition, the government has said numerous times that the individual mandate is essential to PPACA, essentially stating that without the individual mandate, much of the bill cannot be carried out as written. Mr. Kneedler could not provide to the Court an example of a case where the Court has struck down the main provision of a bill, yet allowed the rest of the bill to stand as is.
On the issue of the Medicaid expansion, the Court was equally divided. The Medicaid expansion provision was designed by Congress to ensure that more poor Americans can be covered by Medicaid. Congress proposed that states would have the option to expand their Medicaid rolls in exchange for increased funding from the government. If a state declines to expand Medicaid rolls, the state will lose all federal Medicaid funding. The plaintiffs argue that this expansion is coercive, since states cannot, realistically, forgo Medicaid funding and still continue to cover those individual who legitimately rely on Medicaid for health care coverage. While Justice Ginsburg tried to point out to Mr. Clement that it seems unfair to do away with a provision that about half of the states think would be a great deal for them, Justice Scalia, surprisingly, is the Justice to point out that there is a political correlation between the Governors that support and the Governors that oppose the Medicaid expansion provision. Mr. Clement believes that the ability to accept this funding should be optional, and that threatening to take away other Medicaid funding from states makes it non-voluntary for all states.
Solicitor General Verilli argued that the proposed expansion is not coercive. He points out that in previous expansions, states have been given the same type of choice, opt in to the new program, or opt out entirely. In previous instances, there were no arguments that states were being forced into an expansion, given that the expansions are all being used to help citizens of the various states. The conservative Justices, however, were clear in their questioning that they believe this provision amounts to a coercive practice, and the federal government should not, in their opinions, be allowed to coerce state governments into accepting federal funding for an expansion that they did not ask for, and apparently do not want.
The most controversial provision at issue before the Supreme Court was whether or not the individual mandate is constitutional. The plaintiffs argue that the individual mandate is not constitutional because Congress, by use of the Commerce Clause of the Constitution, only has the authority to regulate existing commerce, and does not have the power to compel individuals to enter a commercial market. The plaintiffs argue that forcing individuals to purchase health insurance is not regulating a commercial market, it is forcing unwilling citizens into a market they do not wish to be in. The government, on the other hand, argues that Congress, by mandating the purchase of insurance, is not regulating inactivity, but rather regulating the manner of participation in a market – health care – that everyone will eventually participate in.
Justice Kennedy, who is widely believed to be the conservative Justice who is most likely to be willing to vote with his liberal colleagues, frightened many liberals when he asked Solicitor General Verilli “Can you create commerce in order to regulate it?” (http://www.npr.org/2012/03/27/149465820/transcript-supreme-court-the-health-care-law-and-the-individual-mandate). The Solicitor General made the argument that Congress is not creating commerce, but rather almost all citizens take part in the health care commercial market at some point, so individuals are part of the market whether they believe they are or not. The conservative Justices tried to use examples of other markets and services, such as police services, roadside assistance, and burial services, that individuals take advantage of without knowing when or why they will be in need for, but they are not required to purchase insurance for in order to use.
The Solicitor General explained that precedent has allowed Congress to regulate “economic activity with a substantial effect on interstate commerce.” (http://www.npr.org/2012/03/27/149465820/transcript-supreme-court-the-health-care-law-and-the-individual-mandate). The argument was made that when individuals without insurance take advantage of health care, but cannot pay for it, it has the effect of raising prices for others. The question becomes, why should those with insurance be required to pay more for those who choose not buy it instead of mandating that all individuals pay their share?
The plaintiffs conceded that Congress would be within its rights to say that any individual wishing to use the health care system is required to purchase insurance. They believe, however, that in order for Congress’s mandate to be constitutional, it would have to only be mandated at the point of sale, meaning that when a person wanted to use the health care system, only at that point would they be required to purchase insurance. As part of this argument, Mr. Clement argued that it would be reasonable, even in emergency rooms, to have a way for individuals to purchase insurance on the spot. Mr. Clement appeared to ignore the fact that this would essentially allow everyone to delay purchasing insurance until they absolutely need it, leading to significantly higher health care costs because of the high price of emergency care. Significantly, if individuals were to delay purchasing health insurance until it was absolutely necessary, the majority of people covered would already be sick, and much preventative care would be eliminated. Mr. Clement tried to make a comparison between health insurance and car insurance, pointing out that if individuals choose not to have cars, they do not have to opt into the car insurance market. He missed the difference between the two markets. Everyone has to take part, at some point, in the health care market, whereas individuals can choose never to drive a car.
While it seems clear that the government will prevail on the Anti-Injunction Clause argument, nothing is clear beyond that. The worst thing that could happen to PPACA would be for the Supreme Court to decide against the law 5-4 on straight partisan lines. This would give the impression that the decision was not based on actual law, but rather on political beliefs. Unfortunately, this happens far too often with the recent Supreme Courts. Despite Mr. Clement’s arguments that the Medicaid expansion provision is coercive, Congress has in the past, without question, told states that they have the option to accept an expansion or opt out of the program. It seems strange that suddenly, in these hyper partisan times, states with Republican Governors have declared that this type of action is invalid. Additionally, the individual mandate is not unconstitutional. Congress’s power under the Commerce Clause validly allows it to regulate participation in a commercial market that everyone takes part in. Should the Supreme Court find differently on these issues, especially in a 5-4 split, it will be clear that the decision was solely based on political beliefs, not truly based on the law.