Day Two – U.S. Supreme Court Hears Oral Arguments on PPACA’s Individual Mandate

The U.S. Supreme Court heated up on Tuesday as the Justices heard oral arguments on the Patient Protection and Affordable Care Act (PPACA). The focus of the Court yesterday was on the legality of Act’s individual mandate. The Court is grappling ultimately with the constitutional powers of the federal government to require individuals to purchase health insurance or pay a fine to the IRS. The decision will have historic ramifications.  

Critics of PPACA have argued that requiring individuals to purchase a good far exceeds congressional authority under the Commerce Clause, and that it opens the door to allow Congress to require individuals buy a good as mundane as broccoli or as controversial as a firearm. Proponents of the Act have countered that the mandate is a valid use of congressional power to regulate interstate commerce and to implement a tax or penalty to help pay for health insurance.    

By all accounts, several Justices today appeared skeptical of the constitutionality of the individual mandate as evidenced by Justice Anthony Kennedy, the Court’s traditional swing vote, who framed the question by asking, “Can you create commerce in order to regulate it?”

Further, Justice Antonin Scalia asked Solicitor General Donald B. Verrilli, “If I’m in any market at all, my failure to purchase something in that market subjects me to regulation.” Solicitor Verrilli insisted the health care market is inherently distinct and responded, “Virtually everybody else is either in that market or will be in that market, and the distinguishing feature of that is that they cannot…control when they enter that market or what they need when they enter that market.” This argument was quickly disputed by Chief Justice John Roberts who said the same could be said for emergency services, and asked if the government could then require individuals to buy cell phones to facilitate emergency response.

The heart of the government’s argument in favor of the Affordable Care Act centered on the fact that Congress can regulate interstate commerce. Justice Scalia countered that although Congress can regulate interstate activities, the means of regulation must be both necessary and proper and that the Court has found methods of regulation to be improper if they violated the sovereignty of the states. In a statement that clearly demonstrates his view of PPACA, Justice Scalia stated, “The federal government is not supposed to be a government that has all powers…it’s supposed to be a government of limited powers.” He continued, “If the government can do this, what else can it not do?”

Paul Clement, an attorney representing the 26 states, began his argument by saying that although “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 in the first place.”

Time and again, both the Justices and the attorneys arguing before them returned to the subject of the uninsured. Justice Ruth Bader Ginsburg argued, “The people who don’t participate in this market are making it much more expensive for those that do.” Justice Scalia quickly pointed out that the failure to participate in other markets, such as purchasing a car, did not equate to Congress mandating every American had to purchase a car.

Several Justices expressed concerns about forcing Americans to purchase insurance for a broad array of coverage that most individuals would not need such as substance abuse services. This again raised the legal issue of what is the proper scope of regulation due the federal government’s enumerated and limited powers under the U.S. Constitution. Verrilli asserted the individual mandate focuses on the payment for health insurance, but several Justices stated that PPACA’s mandate extends far beyond the financing issue.    

Justice Kennedy’s reaction to the individual mandate may signal trouble for the future of PPACA. Legal commentators agree that Justice Kennedy’s vote could likely swing the Court’s decision to uphold or strike down PPACA. Based on his line of questioning, it appears Justice Kennedy might vote to overturn the individual mandate. He asked the federal government, “Do you not have a heavy burden of justification under the Constitution” to have such unfettered power? Justice Kennedy later said, “The reason this is concerning is because it requires the individual to do an affirmative act…that is different from what we have said in previous cases and that changes the relationship of the federal government to the individual in the very fundamental way.” 

Tomorrow, the Court will hear two sessions — the morning session will address whether a severability clause can be read into PPACA, and the afternoon session will focus on PPACA’s Medicaid expansion.

We have covered many PPACA-related issues since its inception, and will continue to follow these issues and provide updates and analysis for you. Please visit www.HealthcareExchange.com for past blog posts, polls, surveys and numerous resources or www.benefitmall.com to view past Legislative Alerts.

The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal or tax matters discussed herein.

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