The Supreme Court heard oral argument on the requirement that people have health insurance, the mandate. Transcript and audio version here. One of the issues was the constitutional limits on the powers of Congress under the Commerce Clause. Article I, § 8 gives Congress the power: “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” In recent times, this clause has been given a broad interpretation, but there are limits. Congress can’t give victims of violence against women the right to sue in federal courts, for example, and it can’t regulate carrying guns near schools. Bmaz has a good discussion of why this kind of limit matters to progressives.
Donald Verrilli, Jr., the Solicitor General, who represents the government’s side, went first. Adam Serwer reports that he got off to a rocky start, coughing and hemming and hawing. Justice Alito posed this question: could Congress require healthy young people to buy burial insurance, using the same kind of arguments Verrilli made in his brief. This should have been an easy one for Verrilli. The bad outcome is that healthy people die with no burial insurance, or other assets to pay for burial. That is a matter traditionally left to county governments. It is low cost, and rare. It is much more like the violence against women tort case. It isn’t at all like the health insurance business which involves hundreds of billions of federal tax dollars.
Here is Verilli’s answer:
GENERAL VERRILLI: It’s — I think it’s completely different. The — and the reason is that the burial example is not — the difference is here you are regulating the method by which you are paying for something else — health care — and the insurance requirement I think — I mean, the key thing here is my friends on the other side acknowledge that it is within the authority of Congress under Article I under the commerce power to impose guaranteed-issue and community-rating reforms, to end — to impose a minimum coverage provision. Their argument is just that it has to occur at the point of sale, and –
Eventually Justice Ginsburg rescued Verrilli from his wallowing: “If you’re going to have insurance, that’s how insurance works.” But I doubt anyone could rescue him from the rest of his arguments.
Then it was Paul Clement’s turn, representing the 26 states that filed this case. He complains bitterly that Congress is forcing individuals into the insurance market to subsidize those who already have health insurance to lower the rates. That’s one way to phrase the free rider problem that plagues the current system to the tune of billions of dollars. Justice Ginsburg explains Social Security to Clement.
There 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’re 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, Security is its model. The government has to do -there has to be government takeover. We can’t have the insurance industry in it. Is that your position?
MR. CLEMENT: No. I don’t think it is, Justice Ginsburg. I think there are other options that are available.
The most straightforward one would be to figure out what amount of subsidy to the insurance industry is necessary to pay for guaranteed issue and community rating. And once we calculate the amount of that subsidy, we could have a tax that’s spread generally through everybody to raise the revenue to pay for that subsidy. That’s the way we pay for most subsidies.
Clement also agrees that Congress could require insurance companies to sell insurance to people at the moment of need. I bet we’d see Clement back at the Supreme Court arguing that these are unconstitutional in short order.
Michael Carvin spoke for the National Federation of Independent Businesses. Before he was asked a question, he said:
In other words, Congress does not have the power to promote commerce. Congress has — Congress has the power to regulate commerce. And if the power exceeds their permissible regulatory authority, then the law is invalid.
That is so obviously wrong that Chief Justice John Roberts couldn’t let it stand.
I doubt that oral argument helped the Court today.