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Dept of HHS v Florida: A Summary

The Supreme Court heard arguments on the ACA for a record 6 hours spanning 3 days. Eight of the nine Justices heatedly exchanged questions and comments in a unusually charged atmosphere; Justice Clarence Thomas, who has staunchly gone over five years without asking a question, did not break that record during these hearings. The following is a summary of the three days worth of oral arguments.

Day 1: Anti-Injunction Act
Monday’s argument was perhaps the most technical, as it covered the ACA and how it pertains to the 1867 Anti-Injunction Act; in other words, can the Supreme Court decide on the merits of the ACA now, before any penalties have been collected? The Anti-Injunction Act prohibits citizens from challenging a tax in court before they pay it, and the arguments quickly delved into the technicalities of what constitutes a tax versus a penalty. Unfortunately for Robert Long, an outside lawyer brought in to make the case for why the mandate is a tax, the Justices seemed very skeptical and eager to move onto the meat of the discussion to follow on Tuesday.

For more details, please refer to audio/transcripts from Monday’s arguments.

Day 2: Individual Mandate
Solicitor General Donald Verrilli and former Solicitor General Paul Clement, as well as lawyer Michael Carvin, argued the most controversial piece of the Affordable Care Act, which requires individuals to have insurance coverage by 2014 or face a penalty. Verrilli was grilled early and often, particularly by Justices Antonin Scalia and Samuel Alito. The former pointedly asked Verrilli about not compelling young people to purchase insurance, perhaps inadvertently underscoring the very principle of shared risk pools:

Justice Scalia: These people are not stupid. They’re going to buy insurance later. They’re young and need the money now. When they think they have a substantial risk of incurring high medical bills, they’ll buy insurance, like the rest of us. I don’t know why you think that they’re never going to buy it.

General Verrilli: That’s the problem, Justice Scalia.

The discussion took an interesting turn with the much maligned yet highly delicious vegetable, broccoli.

Justice Scalia: Could you define the market — everybody has to buy food sooner or later, so you define the market as food, therefore everybody is in the market; therefore, you can make people buy broccoli.

General Verrilli: No, that’s quite different. The food market, while it shares that trait that everybody’s in it, it is not a market in which your participation is often unpredictable and often involuntary.

Justice Anthony Kennedy, often the swing vote in rulings, is considered the most likely fifth vote in favor of the mandate. To the dismay of ACA proponents, he repeatedly displayed concern regarding the constitutionality of the mandate under the Commerce Clause: “Can you create commerce in order to regulate it?” He later commented:

I understand that we must presume laws are constitutional, but even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?

Justice Ruth Bader Ginsburg, as well as Justice Stephen Breyer, frequently came to Verrilli’s aid:

Justice Ginsburg: I thought a major, major point of your argument was that the people who don’t participate in this market are making it much more expensive for the people who do; that is, a goodly number of them will get services that they can’t afford at the point when they need them, and the result is that everybody else’s premiums get raised. So it’s not your free choice just to do something for yourself. What you do is going to affect others, affect them in a major way.

General Verrilli: That absolutely is a justification for Congress’ action here. That is existing economic activity that Congress is regulating by means of this rule.

General Verrilli emphasized that while the government cannot coerce individuals to enter commerce, those who choose not to purchase health insurance have still entered into commerce because the costs of uncompensated care for 40 million uninsured are passed onto other individuals.

Paul Clement skillfully argued for Florida, and fielded a barrage of questions from Justices Ginsburg, Breyer, Sotomayor and Kagan, who are largely believed to be in favor of the mandate. They vocalized the argument for a mandate, sometimes more eloquently than General Verrilli. In an attempt to demonstrate that the health care industry is not unique in its ability to affect everyone, Clement argued that “by [his] not purchasing a car, [he] is causing the labor market in Detroit to go south.” Justice Breyer countered:

Justice Breyer: We don’t like to admit it, because we are human beings, we all suffer from the risk of getting sick, and we also all know that we’ll get seriously sick. And we also know that we can’t predict when. And we also know that when we do, there will be our fellow taxpayers through the Federal Government who will pay for this. If we do not buy insurance, we will pay nothing. And that happens with a large numer of people in this group of 40 million, none of whom can be picked out in advance.

Now, that’s quite different from the car situation, and it’s different in only this respect: it shows there is a national problem, and it shows there is a national problem that involves money, cost, insurance. So, if Congress could do this, should there be a disease that strikes the United States and they want everyone inoculated even though 10 million will be hurt, it’s hard for me to decide why that isn’t interstate commerce, even more so where we know it affects everybody.

Justice Elena Kagan addressed Clement’s point that the mandate is not within the commerce power of the Federal Government:

Justice Kagan: Well, once again, though, who’s in commerce and when are they in commerce? If the effect of all these uninsured people is to raise everybody’s premiums, not just when they get sick, if they get sick, but right now in the aggregate, and Wickard and Raich tell us we should look at the aggregate, and the aggregate of all these uninsured people are increasing the normal family premium, Congress says, by $1,000 a year — those people are in commerce. They are making decisions that are affecting the price that everybody pays for this service.

For more details, please refer to audio/transcripts from Tuesday’s arguments.

Day 3: Severability
The first hearing on Wednesday was regarding whether parts of the 2010 law can survive if the individual mandate was struck down by the Supreme Court. The deputy solicitor general, Edwin Kneeler, and H. Bartow Farr III argued in favor of preserving the rest of the ACA, while Clement argued in favor of striking down the entire law. Justice Sotomayor leaned toward keeping the rest of the ACA, and allowing Congress to come up with alternative solutions to the mandate.

Justice Sotomayor: What we do know is that for states that found prices increasing, that they found various solutions to that. In one instance, Massachusetts passed the mandatory coverage provision. But others adjusted some other provisions. Why shouldn’t we let Congress do that, if in fact the economists prove that prices will spiral? What’s wrong with leaving it in the hands of the people who should be fixing this, not us?

Justice Scalia was particularly vocal about his reluctance to allow a gutted ACA, and the difficulty of figuring out what Congress would have wanted stricken if it could have known the mandate would not hold.

Justice Scalia: If you take out the heart out of the statute, the statute’s gone. That enables Congress to do what it wants in the usual fashion. And it doesn’t inject us into the process of saying: this is good, this is bad, this is good, this is bad. It seems to me it reduces our options the most and increases Congress’ the most.

Justice Scalia: Let’s consider how your approach, severing as little as possible, thereby increases the deference that we’re showing to Congress. It seems to me it puts Congress in this position: this Act is still in full effect. There is going to be this deficit that used to be made up by the mandatory coverage provision. All that money has to come from somewhere.

You can’t repeal the rest of the Act because you’re not going to get 60 votes in the Senate to repeal the rest. So you’re just put to the choice of bankrupting insurance companies and the whole system comes tumbling down, or else enacting a Federal subsidy program to the insurance companies, which is what the insurance companies would like, I’m sure. It seems to me it’s a gross distortion of [showing deference to Congress and respecting the democratic process].

Justice Kennedy also seemed to side with Justice Scalia:

Kneedler: We think, as a matter of judicial restraint, limits on equitable remedial power limit this Court to addressing the provision that has been challenged as unconstitutional and anything else that the plaintiff seeks as relief.

Justice Kennedy: We would be exercising the judicial power if one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended. By reason of this Court, we would have a new regime that Congress did not provide for, did not consider. That, it seems to me, can be argued at least to be a more extreme exercise of judicial power than striking the whole.

Justice Breyer, on the other hand, appeared to disagree.

Justice Breyer: Now, what is your argument that just because the heart of the bill is gone, that has nothing to do with the validity of these other provisions, both those that cost money, or at least those that cost no money? Do you want to make an argument in that respect, that destroying the heart of the bill does not blow up the entire bill; it blows up the heart of the bill? I just would like to hear what you have to say about that.

Farr: It seems to me when you are talking about the provisions that don’t have anything to do with the minimum coverage provision, there is no reason to answer that question as any other way than yes, Congress would have wanted those provisions.

Justice Breyer: Have you ever found a severability case where the Court ever said, “Well, the heart of the thing is gone and therefore we strike down these other provisions that have nothing to do with it which could stand on their feet independently and can be funded separately or don’t require money at all.”

Farr: I am not aware of any modern case that says that.

Justice Kagan succintly boiled down the severability issue into yet another food metaphor:

Is half a loaf better than no loaf? And on something like the exchanges, it seems to me a perfect example where half a loaf is better than no loaf. The exchanges will do something.

Medicaid Expansion
The final hearing was regarding whether or not Medicaid expansion unfairly compels states to participate in the voluntary federal program. Many considered this portion to be the weakest challenge to the ACA, which was reflected in the oral arguments.

Justice Kagan: Why is a big gift from the Federal Government a matter of coercion? In other words, the Federal Government is here saying, we are giving you a boatload of money. There’s no matching funds requirement, there are no extraneous conditions attached to it, it’s just a boatload of federal money for you to take and spend on poor people’s health care. It doesn’t sound coercive to me, I have to tell you.

While the constitutionality of Medicaid expansion does not appear to be in jeopardy, the decision on the individual mandate will be a much closer one. The Supreme Court will soon hold a preliminary vote; a decision is expected sometime in June.

For more details, please refer to audio/transcript on severability and Medicaid expansion from Wednesday’s arguments.

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