Supreme Court health-care hearings: Individual mandate debated

The individual mandate component of the national health-care overhaul law had its day in court Tuesday, as some Supreme Court justices voiced skepticism over its constitutionality. Robert Barnes and N.C. Aizenman reported from the hearing :

Justice Anthony M. Kennedy, traditionally the justice most likely to side with the court’s liberals, suggested that the 2010 Patient Protection and Affordable Care Act invoked a power “beyond what our cases allow” the Congress to wield in regulating interstate commerce.

“Can you create commerce in order to regulate it?” he asked.

The arguments revealed a familiar alignment of the court. Its four liberal justices, appointed by Democratic presidents Bill Clinton and Barack Obama, supported the government’s argument. But one of the five conservatives appointed by Republican presidents Ronald Reagan, George H.W. Bush and George W. Bush would be needed to uphold the act, and all at some point resisted the government’s position. Their sharp questioning raised doubts about whether the individual insurance mandate could survive the Supreme Court’s historic review.

Kennedy and Chief Justice John G. Roberts Jr. would seem to hold the key to the court’s eventual decision, which likely will come near the end of the court’s term in June. But a caveat is appropriate: while the justices’ questions often foreshadow their decisions, that is not always the case, especially in cases with high stakes and constitutional questions.

The question of the limits of government power has animated the nation’s debate over the health-care law since it was passed by a Democratic Congress in 2010. The law, President Obama’s signature domestic initiative, has been roundly denounced by Republican officeholders and the candidates vying to run against him in the November presidential election.

U.S. Solicitor General Donald B. Verrilli Jr., representing the government, was the first to argue Tuesday, and he immediately found himself assailed by skeptical questions from some of the court’s conservatives. The lawyers for the parties challenging the law were scheduled to present their arguments after Verrilli.

“So if I’m in any market at all, my failure to purchase subjects me to regulation?” Justice Antonin Scalia wanted to know. The court’s longest-serving justice had been seen by some of the law’s proponents as a potential ally because of a past decision in which he said the Constitution’s Commerce Clause, which allows Congress to regulate interstate commerce, gave it power in cases involving the national economy.

But Scalia gave no indication that he was convinced by the government’s argument. He asked whether, if the individual mandate were upheld, the Congress could then compel people to buy broccoli or cars.

Wonkblog’s Ezra Klein dubbed it a “bad day for Obamacare’s supporters’.

The quick read is that today went very badly for supporters of the individual mandate. As one of the experienced Supreme Court watchers who runs SCOTUSblog tweeted, “Paul Clement” — the attorney arguing against the health-care law — “gave the best argument I’ve ever heard. No real hard questions from the right. Mandate is in trouble.”

As Lyle Denniston writes, this still looks like Justice Anthony Kennedy’s case to decide. But however he decides it, it’s worth keeping in mind what an oddly narrow principle is actually being debated.

According to tax economists, there’s no economic difference between the individual mandate and the policies leading Republicans support to give large tax credits to Americans who purchase health-care insurance and deny them to those who don’t. But while the mandate might get overturned, everyone agrees that discriminatory tax credits are constitutional.

By now, you should know how the individual mandate works: Starting in 2016, those who don’t carry insurance will be assessed a $695 fine, per year, or 2.5 percent of their income, whichever is higher. There are exemptions for those who can’t afford health-care insurance, but that’s the basic gist of it.

Here’s how Paul Ryan’s health-care plan works: Individuals who purchase insurance will get a $2,300 tax credit. Individuals who don’t purchase insurance forgo the tax credit. There’s no affordability clause such that, say, someone who can’t afford health insurance nevertheless gets the tax credit.

Now, various conservative legal minds have argued that there is a profound difference between these two policies: One is penalizing a particular form of economic inactivity, while the other is encouraging a particular form economic activity. And perhaps that’s so. But it’s not a difference very many Americans would notice when it came time to pay their taxes.

Earlier, Aizenman traced the roots of the individual mandate and found that Republicans were the originators of the concept:

The individual insurance mandate, which requires virtually all Americans to obtain health coverage or pay a fine, was the brainchild of conservative economists and embraced by some of the nation’s most prominent Republicans for nearly two decades. Yet today many of those champions — including presidential hopefuls Mitt Romney and Newt Gingrich — are among the mandate’s most vocal critics.

Meanwhile, even as Democratic stalwarts warmed to the idea in recent years, one of the last holdouts was the man whose political fate is now most closely intertwined with the mandate: President Obama.

“The ironies to this story are endless and everywhere,” said John McDonough, a professor at the Harvard University School of Public Health who, as a Senate Democratic staffer, played a key role in drafting the law.

The tale begins in the late 1980s, when conservative economists such as Mark Pauly, a professor at the University of Pennsylvania’s Wharton School of business, were searching for ways to counter liberal calls for government-sponsored universal health coverage.

“We wanted to find an alternative that was more consistent with market-oriented economic ideas and would involve less government intervention,” Pauly said.

His solution: a system of tax credits to ensure that all Americans could purchase at least bare-bones “catastrophic” coverage.

Pauly then proposed a mandate requiring everyone to obtain this minimum coverage, thus guarding against free-riders: people who refuse to buy insurance and then, in a crisis, receive care whose costs are absorbed by hospitals, the government and other consumers.

Heath policy analysts at the conservative Heritage Foundation, led by Stuart Butler, picked up the idea and began developing it for lawmakers in Congress.

By 1993, when President Bill Clinton was readying his major health-care overhaul bill, the Heritage approach — subsidizing and facilitating the purchase of private health plans, while using the individual mandate to maximize participation — had gelled as the natural Republican alternative.

Then-Sen. John H. Chafee (R-R.I.) formally proposed it in a bill that attracted 20 Republican co-sponsors; the bill foundered once Clinton’s effort unraveled. But the idea of the mandate gained currency in the ensuing years as Democrats chastened by the failure of the Clinton plan began considering new solutions more likely to attract bipartisan support.

Read more on PostPolitics.com

Full transcript of today’s argument | Audio

Interactive: What the health-care law means for you

Natalie Jennings is a Web producer for PostTV.
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