KC Health Care Reform

• Analysts are now predicting the individual mandate is more likely to be struck down than upheld. Justice Kennedy is the key vote.
• The argument hinges on two questions:
  • Is the market being regulated “health care” or “health insurance?” Almost everyone will use health care, but the same is not true of insurance.
  • Where is the limit to government power under the commerce clause?

Question: Does the government have the right to require individuals to purchase health insurance?

The Constitution gives the government the right to regulate interstate commerce and to create taxes, which the government says makes the mandate constitutional. However, the challengers point out that the individual mandate doesn’t regulate existing commerce in the health care market. Instead, it requires people to enter the health insurance market, which is an unjustified expansion of power.

Yes, the Commerce Clause allows the government to regulate all interstate commerce, including the health insurance market.

• The Commerce Clause of the Constitution gives Congress the power to regulate interstate commerce.
• People almost inevitably use health care, and insurance is the predominant method of payment for that care. If individuals don’t have insurance, they are subsidized through the premium payments of other individuals, which has a direct, negative impact on commerce.
• A key distinguishing feature of the health care market is that people generally cannot predict or control when they will need to enter the market.
• Health care and health insurance are structured in a way that is very different from other markets because certain people (i.e. young, healthy people) can have a disproportionate effect on prices by choosing not to buy insurance.
• The Supreme Court has previously given the federal government broad power under this clause.
• The Congress also has the right to impose taxes, which would include the penalty for noncompliance with the mandate. The Justices were unconvinced by this argument.
• The mandate is also justified because it is necessary to make other parts of PPACA work as intended.

No, the government does not have the right to require someone purchase a product

• Congress is not regulating commerce it is compelling it, which is not allowed under the Commerce Clause.
• Justice Kennedy pointed out this is an expansion of government power that goes beyond any previous laws.
• There is no practical legal way to allow the government to require people to purchase health insurance but prohibit it from requiring people to purchase broccoli.
• The mandate requires a purchase that is beyond what is necessary to address the free-rider problem.
• Congress had other less intrusive methods available to achieve its goals.
• The uninsured are not necessarily free riders. It is not until they access health care and default on their debts that they become free riders.
• The mandate isn’t justified under the tax power, because the penalty isn’t a tax.

Conventional Wisdom

Many commentators said the government’s attorney looked uncomfortable and unprepared. CNN analyst Jeffrey Toobin described the oral arguments as “a train wreck for the Obama administration.” Because of this poor performance and Justice Kennedy’s unexpectedly hostile questions, the consensus is that the individual mandate is likely to be struck down.

However, Justice Kennedy could decide to vote to uphold the mandate if he can persuade the liberal justices on the Court to include a strong limit on government power in the majority opinion.