Supreme Court Arguments on Affordable Care Act, Day 2: Individual Mandate
When I heard the initial reports on today's Supreme Court arguments, my heart sank. For ill or for good, the individual mandate is an integral part of the machinery that allows health insurance to be affordable for people with pre-existing conditions, who would otherwise be excluded, and the pundits were saying Solicitor General Verrilli had blown it. But then I listened and read the transcript and I came away with an entirely different impression.
The first impression is this: If they kill the Affordable Care Act, that would be the only time we could actually find the political will to get Medicare for All passed, particularly after Justices Ginsburg and Sotomayor elicited agreement from counsel representing the states and the NFIB that Medicare for All would be perfectly constitutional, in their esteemed opinions.
Arguments today ranged from the need for telephones to the requirement that cars have anti-emissions devices, from wheat to milk to marijuana, all related to the commerce powers granted to Congress under the Constitution.
I am not going to try and describe all of the legal arguments. If you want those, I would recommend reading this analyis at SCOTUSblog or Brian Beutler's more optimistic view. I'm also not going to try and figure out which way the Justices are leaning on this. I have no idea, though it's safe to say that Alito and Scalia along with Clarence Thomas are not going to uphold it. Kennedy and Roberts would be the two to watch.
There were, however, some moments that are worth highlighting because they do summarize the conflict so well.
First, this from Solicitor General Verrilli, in response to Justice Roberts' questioning about covering services some people will not use and others will, like maternity or pediatric services:
And the problem here in this market is that for -- you may think you're perfectly healthy and you may think that you're not -- that you're being forced to subsidize somebody else, but this is not a market in which you can say that there is a immutable class of healthy people who are being forced to subsidize the unhealthy. This is a market in which you may be healthy one day and you may be a very unhealthy participant in that market the next day and that is a fundamental difference...
That's a key point, and one that differentiates the health care "market" from others. Later on, Justice Kagan put the exclamation point on it when she asked whether the "subsidizers eventually become the subsidized."
That led to this exchange with Justice Scalia, which drove this listener to despair:
JUSTICE SCALIA: We're not stupid. They're going to buy insurance later. They're young and -- and need the money now.
GENERAL VERRILLI: But that's -
JUSTICE SCALIA: When -- when they think they have a substantial risk of incurring high medical bills, they'll buy insurance, like the rest of us. But -
GENERAL VERRILLI: That's -- that's -
JUSTICE SCALIA: -- I don't know why you think that they're never going to buy it.
GENERAL VERRILLI: That's the problem, Justice Scalia. That's -- and that's exactly the experience that the States had that made the imposition of guaranteed-issue and community rating not only be ineffectual but be highly counterproductive. Rates, for example, in New Jersey doubled or tripled, went from 180,000 people covered in this market down to 80,000 people covered in this market. In Kentucky, virtually every insurer left the market. And the reason for that is because when people have that guarantee of -- that they can get insurance, they're going to make that calculation that they won't get it until they're sick and they need it, and so the pool of people in the insurance market gets smaller and smaller. The rates you have to charge to cover them get higher and higher. It helps fewer and fewer -- insurance covers fewer and fewer people until the system ends.
JUSTICE SCALIA: You could solve that problem by simply not requiring the insurance company to sell it to somebody who has a -- a condition that is going to require medical treatment, or at least not -not require them to sell it to him at -- at a rate that he sells it to healthy people.
But you don't want to do that.
Listen to Justice Scalia's statement and SG Verrilli's response. Pay close attention to Verrilli's tone, which was as close to audible clenched teeth as I've ever heard.
Two thoughts on this exchange. One, Scalia was actually leading Verrilli to get the rationale for the mandate on the record in a clear way. Or two, he was really serious about his contention that all it would take to "fix" things would be resetting them to the way they were before. I confess, I take the pessimistic view.
The arguments with the states' attorney Clement and the NFIB attorney Carvin were equally contentious and climbed far down into the weeds at some points. I'm certain lawyers understood the nuance. To me, a person who is guided on practical principles, it seemed ridiculous to compare health care to wheat and marijuana, but I did understand the distinction Clement was trying to draw between health care services and health insurance, as if they're not at all related to one another. Justice Kagan had a word or two on that in response to Clement's efforts to separate the two:
JUSTICE KAGAN: Well, doesn't that seem a little bit, Mr. Clement, cutting the bologna thin? mean, health insurance exists only for the purpose of financing health care. The two are inextricably interlinked. We don't get insurance so that we can stare at our insurance certificate. We get it so that we can go and access health care.
Clement answered with a response I consider to be ridiculous, given that insurance is not a risk market, but a payment system. It is absolutely not the same as other insurance, because other insurance assumes the risk that an event will or will not happen. In health care, that isn't a risk, it's a given.
I think what health insurance does and what all insurance does is it allows you to diversify risk. And so it's not just a matter of I'm paying now instead I'm paying later. That's credit. Insurance is different than credit. Insurance guarantees you an upfront, locked-in payment, and you won't have to pay any more than that even if you incur much great expenses.
I will leave you with this exchange between Mr. Clement and Justice Ginsburg, which I consider to be a wonderful effort to slap back at those claims of "government-run healthcare."
JUSTICE GINSBURG: Mr. Clement, doesn't that work -- that work the way Social Security does? Let me put it this way. Congress, in the '30s, saw a real problem of people needing to have old age and survivor's insurance. And yes, they did it through a tax, but they said everybody has got to be in it because if we don't have the healthy in it, there's not going to be the money to pay for the ones who become old or disabled or widowed. So they required everyone to contribute.
It was a big fuss about that in the beginning because a lot of people said -- maybe some people still do today -- I could do much better if the government left me alone. I'd go into the private market, I'd buy an annuity, I'd make a great investment, and they're forcing me to paying for this Social Security that I don't want; but, that's constitutional.
So if Congress could see this as a problem when we need to have a group that will subsidize the ones who are going to get the benefits, it seems to me you are saying the only way that could be done is if the government does it itself; it can't involve the private market, it can't involve the private insurers. If it wants to do this, Social Security is its model. The government has to do -- has to be government takeover. We can't have the insurance industry in it. Is that your position?
Mr. Clement was quick on his feet, suggesting that the federal government could simply subsidize those extra costs for sick folks via a tax on everyone. In other words, figure out what the free riders cost, divide it by taxpaying households, and impose it. I'm certain Grover Norquist would be fine with that, aren't you?
There's no real way to know whether or not these arguments make a difference. What I will say is that it was not as cut and dried as some would think, nor was the government's case a "train wreck", as Jeffrey Toobin cried right after the arguments today.
Oh, here's a bonus from Justice Sotomayor:
Do you think that there's -- what percentage of the American people who took their son or daughter to an emergency room and that child was turned away because the parent didn't have insurance -- do you think there's a large percentage of the American population who would stand for the death of that child -
MR. CARVIN: One of the most -
JUSTICE SOTOMAYOR: They had an allergic reaction and a simple shot would have saved the child?
MR. CARVIN: One of the more pernicious, misleading impressions that the government has made is that we are somehow advocating that people be -- could get thrown out of emergency rooms, or that this alternative that they've hypothesized is going to be enforced by throwing people out of emergency rooms. This alternative; i.e. conditioned access to health care on buying health insurance, is enforced in precisely the same way that the Act does. You either buy health insurance or you pay a penalty of $695. You don't have doctors throwing people out on the street. And -- and so the only - J
USTICE SOTOMAYOR: I'm sorry, did you say the penalty's okay but not the mandate? I'm sorry. Maybe I've misheard you.
Tomorrow's arguments are over unfunded mandates on the States and the severability clause. I'll be back tomorrow afternoon to bring you the final recording and any highlights.