Healthcare Hearings II - The Mandate Question
Yesterday the arguments bofore the court focused on the constitutionality of the mandate. It was very good theater. the trascript and audio for the arguments for and against are here.
Well worth listening too. Below are cut and pasted some exchanges or points I found key. Overall, I found the arguments against the constitutionality of a mandate persuasive. It dissapoints me that Congress took this route, rather than a tax and rebate program which would have been constitutional and functionally nearly equivalent. This relates to the cowardice of congress to impose a tax IMO, so they find a roundaboutway to do just that but call it something else. Key to the arguments in favor of a mandate is that Congress isn't creating the health care market, since we all participate in it, just regulating it. Key against is that Congress can not force individual participation in a market, just regulate those who are in it.
Anyway, some clips.
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. 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. It is not a market in which you often don't know before you go in what you need, and it is not a market in which, if you go in and -- and seek to obtain a product or service, you will get it even if you can't pay for it. It doesn't -
[Really. Who gos to buy broccoli and finds they suddenly require Filet Mignon? Or that they can get it.]
JUSTICE SOTOMAYOR: And the third argument -- and I see all of them as different -- is that what the government is doing, and I think it's the argument you're making today -- that what the -- what the government is saying is if you pay for -- if you use health services, you have to pay with insurance. Because only insurance will guarantee that whatever need for health care that you have will be covered. Because virtually no one, perhaps with the exception of 1 percent of the population, can afford the massive cost if the unexpected happens.
[Called out the 99% -- Oh no she di'int.]
CHIEF JUSTICE ROBERTS: But your theory is that there is a market in which everyone participates because everybody might need a certain range of health care services, and yet you're requiring people who are not -- never going to need pediatric or maternity services to participate in that market.
GENERAL VERRILLI: 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.
CHIEF JUSTICE ROBERTS: So I don't see how we can accept your -it's good for you in this case to say oh, it's just insurance. But once we say that there is a market and Congress can require people to participate in it, as some would say -- or as you would say, that people are already participating in it -- it seems to me that we can't say there are limitations on what Congress can do under its commerce power, just like in any other area, all -- given significant deference that we accord to Congress in this area, all bets are off, and you could regulate that market in any rational way.
JUSTICE SCALIA: Can -- can I tell you what the something else is so -- while you're answering it? The something else is everybody has to exercise, because there's no doubt that lack of exercise cause -- causes illness, and that causes health care costs to go up. So the Federal government says everybody has to -- to join a -- an exercise club. That's -- that's the something else.
JUSTICE ALITO: Congress can force people to purchase a product where the failure to purchase the product has a substantial effect on interstate commerce -- if what? If this is part of a larger regulatory scheme? Was that it? Was there anything more?
GENERAL VERRILLI: We got two and they are -- they are different. Let me state them. First with respect to the comprehensive scheme. When Congress is regulating -- is enacting a comprehensive scheme that it has the authority to enact that the Necessary and Proper Clause gives it the authority to include regulation, including a regulation of this kind, if it is necessary to counteract risks attributable to the scheme itself that people engage in economic activity that would undercut the scheme. … With respect to the -- with respect to the -- considering the Commerce Clause alone and not embedded in the comprehensive scheme, our position is that Congress can regulate the method of payment by imposing an insurance requirement in advance of the time in which the -- the service is consumed when the class to which that requirement applies either is or virtually is most certain to be in that market when the timing of one's entry into that market and what you will need when you enter that market is uncertain and when -- when you will get the care in that market, whether you can afford to pay for it or not and shift costs to other market participants.
GENERAL VERRILLI: That -- that is true, Justice Ginsburg. … That's commonly true of penalties under the Code. They do -- if they raise revenue, they are exercises of the taxing power, but their purpose is not to raise revenue. Their purpose is to discourage behavior.
CHIEF JUSTICE ROBERTS: Why didn't Congress call it a tax, then?
GENERAL VERRILLI: Well.--
CHIEF JUSTICE ROBERTS: You're telling me they thought of it as a tax, they defended it on the tax power. Why didn't they say it was a tax?
GENERAL VERRILLI: They might have thought, Your Honor, that calling it a penalty as they did would make it more effective in accomplishing its objective. But it is -- in the Internal Revenue Code it is collected by the IRS on April 15th. I don't think this is a situation in which you can say ..
[Cowardice of congress perhaps?]
MR. CLEMENT: Mr. Chief Justice and may it please the Court. The mandate represents an unprecedented effort by Congress to compel individuals to enter commerce in order to better regulate commerce.
The Commerce Clause gives Congress the power to regulate existing commerce. It does not give Congress the far greater power to compel people to enter commerce to create commerce essentially in the first place.
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.
[Comparison to mandated education should be made as well. Surprised it was not, but education is state run -- though perhaps that is the point, fedearally regulated but mandated at State level]
MR. CLEMENT: 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.
MR. CLEMENT: Now, if you look through all the cases you mentioned, I do not think you will find a case like this. And I think it's telling that you won't. I mean, the regulation of the wheat market in Wickard against Filburn, all this effort to address the supply side and what producers could do, what Congress was trying to do was support the price of wheat. It would have been much more efficient to just make everybody in America buy 10 loaves of bread. That would have had a much more direct effect on the price of wheat in the prevailing market.
But we didn't do that. We didn't say when we had problems in the automobile industry that we are not just going to give you incentives, not just cash for clunkers, we are going to actually have ever everybody over 100,000 has to buy a new car -
CHIEF JUSTICE ROBERTS: Everybody is in this market, so that makes it very different than the market for cars or the other hypotheticals that you came up with, and all they're regulating is how you pay for it.
MR. CLEMENT: And with respect to the health insurance market that's designed to have payment in the health care market, everybody is not in the market. And that's the premise of the statute, and that's the problem Congress is trying to solve.
And if it tried to solve it through incentives, we wouldn't be here; but, it's trying to solve it in a way that nobody has ever tried to solve an economic problem before, which is saying, you know, it would be so much more efficient if you were just in this market
MR. CLEMENT: And if I could, if I could talk about the difference between the health insurance market and the health care market, I mean, ultimately I don't want you to leave here with the impression that anything turns on that. Because if the government decided tomorrow that they would come up with a great -- some of these -- some private companies come up with a great new wonder drug that would be great for everybody to take, would have huge health benefits for everybody; and by the way, also if everybody had to buy it, it would facilitate economies of scale, and the production would be great, and the price would be cheaper and force everybody in the health care market, the actual health care market to buy the wonder drug, I'd be up here making the same argument. I would be saying that's not a power that's within the commerce power of the Federal Government. It is something much greater. And it would have been much more controversial.
MR. CLEMENT: If all we were concerned about is the cost sharing that took place because of uncompensated care in emergency rooms, presumably we have before us a statute that only addressed emergency care and catastrophic insurance coverage. But it covers everything, soup to nuts, and all sorts of other things.
MR. CLEMENT: I represent 26 States. I do think the States could pass this mandate, but I … I didn't answer yes, the States can do it because it would be a valid regulation of intrastate commerce. I said yes, the States can do it because they have a police power, and that is the fundamental difference between the States on the one hand and the limited, enumerated Federal Government on the other.
MR. CARVIN: We don't. No, and we don't know in advance, and -- and --but that doesn't change the basic principle, that you are nonetheless forcing people for paternalistic reasons to go into the insurance market to ensure against risk that they have made the voluntary decision that they are not -- have decided not to.
JUSTICE ALITO: Mr. Carvin, isn't there this difference between Justice Breyer's hypothetical and the law that we have before us here? In his hypothetical harm to other people from the communicable disease is the result of the disease. It is not the result of something that the government has done, whereas here the reason why there is cost shifting is because the government has mandated that. It has required hospitals to provide emergency treatment, and instead of paying for that through a tax which would be born by everybody, it has required -- it has set up a system in which the cost is surreptitiously shifted to people who have health insurance and who pay their bills when they go to the hospital.
MR. CLEMENT: Justice Alito, that is exactly the government's argument. It's an extraordinarily illogical argument.
JUSTICE BREYER: And then the question is when you are born and you don't have insurance and you will in fact get sick and you will in fact impose costs, have you perhaps involuntarily -- perhaps simply because you are a human being -- entered this particular market, which is a market for health care?
MR. CARVIN: If being born is entering the market, then I can't think of a more plenary power Congress can have, because that literally means they can regulate every human activity from cradle to grave. thought that's what distinguished the plenary police power from the very limited commerce power.
JUSTICE GINSBURG: It just seems very strange to me that there's no question we can have a Social Security system besides all the people who say: I'm being forced to pay for something I don't want. And this it seems to me, to try to get care for the ones who need it by having everyone in the pool, but is also trying to preserve a role for the private sector, for the private insurers. There's something very odd about that, that the government can take over the whole thing and we all say, oh, yes, that's fine, but if the government wants to get -- to preserve private insurers, it can't do that.
MR. CARVIN: No again. The people who impose the costs on the rest of us are people who engage in a different activity at a different time, which is defaulting on their health care payments. It's not the uninsured.
MR. CARVIN: There is no moral dilemma between having people have insurance and denying them emergency service. Congress has made a perfectly legitimate value judgment that they want to make sure that people get emergency care. Since the founding, whenever Congress has imposed that public responsibility on private actors, it has subsidized it from the Federal Treasury. It has not conscripted a subset of the citizenry and made them subsidize the actors who are being hurt, which is what they're doing here.
MR. CARVIN: One of the issues here is not only that they're compelling us to enter into the marketplace, they're not -- they're prohibiting us from buying the only economically sensible product that we would want, catastrophic insurance.
Page 110 - Closing point
GENERAL VERRILLI: And I think this is actually a paradigm example of the kind of situation that Chief Justice Marshall envisioned in McCulloch itself, that the provisions of the Constitution needed to be interpreted in a manner that would allow them to be effective in addressing the great crises of human affairs that the Framers could not even envision.