Obamacare Before the Supreme Court

by Pejman Yousefzadeh on March 28, 2012

Like others, I think that Day 2 of the oral arguments regarding the constitutionality of the Affordable Care Act were a disaster for the law’s proponents. Solicitor General Verrilli was woefully unprepared, and completely outmatched by Paul Clement, who argued that the Act is unconstitutional. Even if you think that the quality of oral argument matters significantly less than do the quality of the briefs–a position I hold myself–it can’t be good for the law’s proponents that all five Republican-appointed Justices were asking tough questions that seemed to reveal their skepticism that the Act passes constitutional muster. I know that lots of times, appellate judges ask questions that reflect concerns of their colleagues, so that they can go to their colleagues later, and tell them that they had sought to address their concerns by asking questions based on them. Ideally, of course, those appellate judges would then like to tell their colleagues that their concerns were addressed by the lawyer(s) arguing the case. But in this case, it seems that the five conservative Justices (I am generously calling Justice Kennedy a conservative) were determined to be really tough on Verrilli, and the argument that the Act is constitutional.

Here’s Orin Kerr’s take:

This was a huge day for the challengers to the mandate. The challengers have an uphill battle because they need to sweep all four of the Republican nominees who are potentially in play — Roberts, Alito, Scalia, and Kennedy. Based on today’s argument, it looks like all four of those Justices accepted the basic framing of the case offered by the challengers to the mandate. In particular, they all seem to accept that a legal requirement of action is quite different from a legal requirement regulating action, and that therefore the expansive Commerce Clause precedents like Raich did not apply to this case. That was the key move Randy Barnett introduced, and the four key Justices the challengers needed seemed to accept it. Just as a matter of precedent, that doesn’t seem to me consistent with Wickard v. Filburn, which stated that “[t]he stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon.” But putting aside precedent, the four key Justices all appeared to accept Randy’s basic framing. That was an enormous accomplishment for the challengers.

Professor Kerr goes on to say that he thinks it is a toss-up as to who will win. I am increasingly unsure that this is the case. I find it relatively easy to believe that the Court will find the individual mandate to be unconstitutional and severable, allowing the rest of the Act to survive. Of course, without the individual mandate, the government is left in the position of forcing people into health insurance exchanges without giving insurance companies the comfort of knowing that healthy people–along with sick people–will be forced to purchase insurance so that they can cover costs. So even if the Act is allowed to survive constitutionally without the individual mandate, it falls apart as a piece of legislation if the mandate is severed from it.

It is worth noting that back in the day, a certain onetime Senator from the state of Illinois opposed an individual mandate. Just saying.

It is also worth noting that one of the more ridiculous myths being propagated by supporters of Obamacare is the one that says that only supporters of evil insurance companies are in favor of dumping the Affordable Care Act. This is nonsense; insurance companies love the Act, because–wait for it!–it forces people to give the insurance companies money by buying insurance. What entrepreneur wouldn’t love to have the government force people to buy his/her product? As alluded to above, insurance companies especially love the individual mandate, because it forces both sick and healthy people into health insurance exchanges, thus allowing the healthy people to pay premiums that cover care for the sick people. If it weren’t for the individual mandate, the exchanges would not work; there wouldn’t be enough healthy people in the exchanges, and insurance companies would go broke paying out money to sick people. Insurance companies would weep bitter tears if Obamacare were ruled unconstitutional, and the notion that the passage of Obamacare strikes some kind of terrible blow against insurance companies is utterly laughable.

Note that the above is a policy analysis of the individual mandate. As policy matters go, if you are going to have Obamacare, you need to have the individual mandate to make it work. But that doesn’t justify the mandate on constitutional grounds. It is worth emphasizing anew that never in the history of the United States has the government demanded that citizens buy something from private corporations. Mandating such activity–and regulating economic inactivity as a consequence is such an incredible extension of the Commerce power as to beggar belief. Proponents of Obamacare have to be worried that the five Republican-appointed Justices see this. And that worry is a legitimate one.

I should note that a single-payer system would not have these kinds of constitutional concerns surrounding it, as even John Suthers, the Republican attorney-general for the state of Colorado–one of the opponents of Obamacare–freely admits:

SIEGEL: Well, I have some questions for each of you and then I’d like to hear what both of you say about the other’s remarks. And first, Attorney General Suthers, Walter Dellinger referred to the prospect of a single-payer system. Just to be clear, do you agree with the attorney general of Virginia that if the Congress had passed a, you know, Medicare for all, single-payer system based on the power to tax, there’s no constitutional problem with that. It’s the mix of the insurance business here.

SUTHERS: I think if the Congress had the political will to do so, history indicates that that would be constitutional.

SIEGEL: I mean – and you wouldn’t challenge its constitutionality in that case?

SUTHERS: No.

Again, one can disagree with the policy implications of a single-payer system, but unlike Obamacare, such a system would be constitutionally sound.

As a final matter, three cheers for Randy Barnett. When he originally put forth the proposition that Obamacare is unconstitutional, people laughed in his face.

They aren’t laughing now.

  • Stephen

    You write: “If it weren’t for the individual mandate, the exchanges would not work; there wouldn’t be enough healthy people in the exchanges, and insurance companies would go broke paying out money to sick people.”
    Let’s assume that only the mandate is struck down. As you’ve noted the rest of the law remains in force. Would the effect of this be to destort the market such that private insurers are more likely to leave the market and employers, due to the resulting increase in premiums, more likely to elect to pay penalties and dump employees onto exchanges: a virtuous circle for single-payer proponents?

    Recent polling shows that while the public may hate the mandate, most still like the derived benefits of the ACA. If only the mandate is struck down then the act’s opponents are left in the position of arguing for taking away the goodies that proponents will tout and a goodly portion of the public likes.  While arguing for the fundamental fiscal unsustainability of the remaining act may be a political winner for ACA opponents, that has yet to be demonstrated in an election in which the mandate was not also an issue.

    • Demosthenes

       My mother has a beautiful new car.  If you asked me about all of its individual features, my answer would be that I love them, and that I think they’re an excellent thing that I would want to have.  Built-in Bluetooth?  Yup?  Built-in GPS?  Yup.  Cameras to show you what’s behind you as you’re backing up?  Alert lights to let you know when cars are in your blind spot?  Collision alarms?  Sunroof?  Power everything?  I would love all those things.

      But I don’t want to pay $40,000+ for a car.  Because that would mean that I’d have to go deeply into debt, at a time when I’m already deeply into debt, to pay off the car.  And it wouldn’t even be a question as to whether I could meet all my debt payments; the question would be which payments I’d lapse on, which things I would risk having repossessed (or for which things I would risk having my wages garnished), and how awful my credit would look at the end of the whole sordid process.

      There might…just maybe…be an allegory here somewhere…

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