Debating Health Care

Today, the Supreme Court heard the first day of arguments on the constitutionality of the health care reform bill Congress passed last year.  It's kind of the Super Bowl for legal dorks-- the Court scheduled six hours of oral arguments over three days on four constitutional issues.  Overruling the law would be a huge step-- it would overturn 70 years worth of Commerce Clause jurisprudence.  It would, in a broad sense, probably the most substantial Commerce Clause decision since World War II.

The Court, rather than hearing the law as a whole, will actually hear four distinct issues related to the Affordable Care Act (ACA), two of which I actually think are pretty boring.  Probably the least interesting issue before the Court will be argued Wednesday afternoon, and concerns a part of the law that mandates the expansion of Medicaid coverage.  Medicaid operates as a federal-state partnership: the Feds provide some funds and instructions that the states are charged with carrying out.  The expansion would have required states to pick up a share of the costs, and 28 Republican-led states sued, arguing that the expansion is "coercive" to the states.  This is probably the least contentious of the issues, and the states will almost certainly lose-- the Feds have a well-recognized power to threaten to pull funds for states that don't comply with a federal program.  Usually, this takes the form of the federal government pulling highway funds from states that lower the drinking age below 21 (which explains why there aren't any states that let you drink at 18).  The Medicaid case would, in essence, pull federal Medicaid funds from states that don't participate in the expansion, which is a perfectly constitutional federal program-- states, after all, technically don't have to participate in Medicaid; they're free not to accept federal funds and pull out of the program.  The real issue, of course, being that no one would be too excited about living in a state that doesn't provide Medicaid.  But it would be shocking to see the Court overturn the Medicaid fix, so I doubt it will be an issue.

The second least interesting issue was argued this morning.  It concerns the Anti-Injunction Act of 1867, which prevents constitutional challenges to taxes that have yet to go into effect.  Since the penalty for failing to obtain health insurance doesn't kick in until 2014 (or maybe 2015; I don't remember exactly), deciding on this issue would give the Court a way out; it could say that it lacks the jurisdiction to hear the crux of the case until the penalty goes into effect.  This one is kind of curious, since both the Administration and opponents of the law contend that it's not a tax.  Over their objections, the Fourth Circuit decided that it was, so the Court appointed a private lawyer (Robert Long from the DC law firm Covington & Burling) to argue the opposing side.  The early indication from the morning's argument seems to be that the Court will be rejecting the Anti-Injunction Act argument.  Which I find a bit curious, since it seems to me that the easiest way for the Administration to win the argument on the individual mandate is to argue that the penalty for failing to obtain coverage is simply a tax (which is the crux of a brief filed by Columbia Law professors Gillian Metzger and Trevor Morrison and joined by a number of prominent Constitutional Law scholars) which can be waived by obtaining health care coverage.  But that doesn't seem to be the route that the Administration is traking.  We'll see if it's a mistake...

Now, the two most interesting issues are set to be argued tomorrow and Wednesday morning.  The big one is the constitutionality of the individual mandate.  Opponents of the ACA have built their argument on the contention that a mandate requiring individuals to buy a private product is an unprecedented infringement on personal liberty, and that upholding the mandate would give the federal government the power to regulate anything and everything under the Commerce Clause.  It's entirely accurate to characterize this as a fringe position.  Going back to the Court's decision in Wickard v. Filburn (1942), the Commerce Clause has covered essentially all economic activity reasonably related to a national market.  In that case, the Court decided that a law regulating wheat production could enjoin a farmer from exceeding his quota even if he used the wheat for consumption on his own farm, the perfectly reasonable rationale being that, even if the wheat was not sold directly into the market, growing wheat for personal consumption directly impacted the national market by displacing wheat that would have been bought in that market.  Since then, the Court has pushed back on Wickard only modestly, holding most significantly in United States v. Lopez (1995) that a statute barring people from carrying guns in school zones was not sufficiently related to interstate commerce to be covered by the Commerce Clause.

The health care case is as close to airtight as there is.  While the law, on its face, requires people to buy a private product, the relation to interstate commerce is very clear and straightforward.  To start with, everyone in the country participates in the health care market all the time, whether they are consuming medical services at a particular moment or not.  Whether I am insured or not, and whether I have the means to pay for health care or not, if I were to be hit by a car tomorrow, I would be transported directly to the hospital, where I would receive medical treatment.  The question would not be whether I am in the health care market, but who would pay for my health care services.  If I had insurance, it would be my insurer.  If I didn't, my health care provider would eat the cost.  But not really, because the story doesn't stop there.  If uninsured people are going to keep being given treatment (and that's an unavoidable proposition, unless you think doctors should ignore the Hippocratic Oath and start digging through people's wallets at the hospital before giving them life-saving treatment), health care providers will continue to do what they're already doing-- they will raise the rates they charge those who can pay to compensate for those who don't.  Since we overwhelmingly pay for medical care through insurance (really, it's the only way to do it; for economic reasons, medical care markets really only function when insurers pay), insurance companies will raise premiums, since providers will charge them more for procedures.  Consequently, at the end of the day, those who do buy insurance end up paying for those who don't.

Failing to buy health insurance, then, is a direct economic act.  The position advanced by opponents is that we all participate in the food market, so the government can require us to buy broccoli.  But that's a complete non-sequitur.  Yes, we all end up getting food, but, for one thing, food providers don't have to give us food if we need it-- we might think it's a good thing for the grocery store to feed me for free if I'm starving and can't afford food, but the law doesn't recognize that as an imperative.  And food is not a market with adverse selection issues that has to be paid for through insurance; I can't put off eating because I figure the food provider will feed me anyway, and food isn't something whose costs will bankrupt me-- an emergency surgery after a car wreck that insurance doesn't cover can easily bankrupt someone; a Big Mac at McDonald's most definitely can't.  So, in a particular sense, health care is a unique market in that people both constantly participate in it, and can really only pay for it through an insurance rather than out-of-pocket mechanism.  All of which makes it pretty plainly within Congress's powers under the Commerce Clause.

The last issue, which will be argued Wednesday morning, concerns the ACA's severability-- that is, if the individual mandate were found to be unconstitutional, the Court would have to decide whether it can be "severed", or detached, from the rest of the law.  My view is that it's, plainly, not severable.  ACA rests on a three-legged stool: a requirement that insurers not be able to refuse coverage to those with so-called pre-existing conditions, subsidies for people who can't afford insurance to get it, and a requirement that everyone purchase coverage or pay a penalty.  The reason it's a stool is that all three features are necessary for the law to function.  If you require insurers to cover everyone and provide subsidies to those that can't afford it, but get rid of the mandate for individuals to purchase insurance, the predictable result will be that no one will actually get health insurance until they need coverage-- after all, if the government is picking up the tab for their purchase of insurance, and companies can't turn them down for coverage, there's no reason to pay premiums until they actually need coverage.  As a result, costs will skyrocket, as insurers will have to charge a fortune just to be able to cover costs.  The result would be an absurdity.  You similarly need subsidies, since you can't squeeze water from a stone-- requiring someone with no income (or very little income) to get insurance is an obvious absurdity.  And, if insurers can reject applicants on the basis of pre-existing conditions, the individual mandate becomes essentially meaningless-- those people's premiums will be so high that very few will be able to afford them, which means subsidies for those people will have to be sky-high.

But the Court shouldn't even have to get to severability, because the law is so clearly constitutional.  Frankly, even though this is the most reactionary Supreme Court we've had since the 1930s, this shouldn't even be a close decision-- Clarence Thomas will certainly vote to invalidate the law (but then, Clarence Thomas is an army of one-- a weirdo whose views are as far outside the mainstream of the legal profession that no one really subscribes to them besides Thomas himself), and Antonin Scalia might as well (though I have my doubts).  But even far-right justices like John Roberts and Samuel Alito will have a hard time finding that the law is unconstitutional.  I think it'll be a 6-3 upholding the individual mandate.