What the Court Decided About ObamaCare

Thursday, the Supreme Court announced its decision that the individual healthcare mandate, and hence the Affordable Care Act as a whole, is constitutional. It was a 5-4 decision, with Chief Justice Roberts siding with the Court’s four liberals and Justice Kennedy (the usual swing vote) joining the other three conservatives.

I was thrilled. Yes, Roberts got to that decision in an odd way (more on that later), and states were given the option to opt out of the Medicaid expansion. (I expect Republican governors to posture a lot about this, but I have a hard time believing they’ll actually refuse.) But the alternative was stark: We’d be back to square one on health care, stuck with 50 million uninsured Americans, spiraling healthcare costs that are already the highest in the world, and no plan on the table to fix any of it.

So we should all take a moment to do a happy dance.

Done? OK, now let’s look at this in a wider perspective.

History. Democrats have been trying to get some form of national health insurance since Truman. LBJ got Medicare and Medicaid passed in the 60s. Clinton tried and failed to get universal health care in the 90s.

Fear that Democrats might someday succeed in passing a Medicare-for-everybody plan that put private health insurance companies out of business caused the conservative Heritage Foundation to propose an individual mandate in the 1989 report Assuring Affordable Health Care for All Americans. The Republican alternatives to HillaryCare in the 90s usually claimed not to have mandates, but tax credits were jiggered to produce the same result: If you chose not to have insurance, you paid more to the federal government.

And of course, an individual mandate is a key and necessary provision of RomneyCare in Massachusetts, which Mitt explained here:

The interesting detail in all of this conservative campaigning for an individual mandate was that its constitutionality was never addressed as a problem. As long as it was a conservative alternative to Democratic proposals, no one challenged the mandate’s constitutionality.

In May, Salon’s Andrew Koppelman asked the question: When did the individual mandate become a constitutional issue?

The first exploration of Congress’s authority to enact a mandate was a paper by Mark Hall, which he posted on SSRN in February, 2009. (I have not been able to find even a hint of the constitutional objection before Obama’s election, even though mandates have been proposed, mainly by Republicans, since the early 1990s.) He concluded that the mandate easily followed from existing commerce clause jurisprudence. … The first published claim of unconstitutionality that I have been able to find is a July 10, 2009, Federalist Society paper by Peter Urbanowicz and Dennis G. Smith. They created the now notorious action/inaction distinction, declaring that “Congress would have to explain how not doing something – not buying insurance and not seeking health care services – implicated interstate commerce.”

Before that, nothing. Crickets.

What Roberts Said. So this is where we are: I did a happy dance because the Court’s partisan Republican majority only managed four votes to shoot down a Republican healthcare idea that Democrats finally managed to pass. Their constitutional objection was based on an ad hoc legal theory that simply did not exist until a few months before Congress passed the law.

Worse, in giving his OK to ObamaCare, Roberts still signed off on the ad hoc action/inaction theory and rejected the Commerce Clause justification that seemed obvious to everybody only two years ago. Instead, he re-interpreted the mandate as a tax and found justification for it in Congress’ constitutional power to tax:

The Federal Government does not have the power to order people to buy health insurance. Section 5000A  would therefore be unconstitutional if read as a command.  The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax.

Now, I can’t complain too much about this, because I’ve been lamenting for months that the mandate would obviously be constitutional if Congress had just replaced the word penalty with tax. Of course, if they had done that, it’s possible that conservatives would have trumped up some novel legal theory that limited the Taxing Clause. Who knows? If you want to throw out a law badly enough, you can always come up with something.

The Ginsburg Dissent. If you want to see what would have been a 9-0 decision in the 1990s, and probably even an 8-1 or 7-2 decision two years ago, scroll past the 59 pages of Roberts’ decision and read the dissent by Justice Ginsburg. (She dissents from Roberts’ reasoning, but not his conclusion that ObamaCare is constitutional. So she is also technically part of the majority that Roberts is writing for.)

There is a very striking difference in tone between Ginsburg’s opinion and both Roberts’ opinion and the joint dissent by the four conservative justices. Ginsburg consistently talks about reality, giving examples and statistics about what is happening here and now in the healthcare market. Meanwhile, Roberts and the conservative bloc mainly discuss bizarre fantasies in which Congress might force everybody to buy broccoli.

At the root of the conservative rejection of the Commerce Clause justification is the idea that Congress’ power to regulate commerce does not include the ability to “create” commerce by forcing people to buy a product (health insurance) they otherwise would not. The objection rests on two points:

  • Individuals should be able to escape Congress’ commerce-regulating power by not participating in the regulated markets.
  • Individuals can choose not to participate in the healthcare market by not buying insurance, not going to the doctor, etc.

The first point sounds reasonable, but has no real basis in legal precedent. And Ginsburg correctly observes that because accident and illness strike even young and apparently healthy people without warning, and because emergency rooms are obligated to treat first and ask for payment later, the second point is just false. Individuals actually cannot avoid adding risk to the health-care system.

Insurance companies and health-care providers know that some percentage of healthy, uninsured people will suffer sickness or injury each year and will receive medical care despite their ina­bility to pay. In anticipation of this uncompensated care, health-care companies raise their prices, and insurers their premiums. In other words, because any uninsured person may need medical care at any moment and because health-care companies must account for that risk, every uninsured person impacts the market price of medical care and medical insurance.

This is also inherently a national problem, precisely the kind of thing that the Founders wanted Congress to have the power to solve.

States cannot resolve the problem of the uninsured on their own. Like Social Security benefits, a universal health-care system, if adopted by an individual State, would be “bait to the needy and dependent elsewhere, encouraging them to migrate and seek a haven of repose.” Helvering v. Davis, 301 U. S. 619, 644 (1937).

In normal times, that would be that. As a unanimous Court wrote in Katzenbach v. McClung (1964)

Where we find that the legislators, in the light of the testimony and facts before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce, our investigation is at an end.

But these aren’t normal times, so Ginsburg has to attack Roberts’ examples directly.

An individual “is not ‘active in the car market,’” the Chief Justice observes, simply because he or she may someday buy a car. The analogy is inapt. The inevitable yet unpredictable need for medi­cal care and the guarantee that emergency care will be provided when required are conditions nonexistent in other markets. That is so of the market for cars, and of the market for broccoli as well. Although an individual might buy a car or a crown of broccoli one day, there is no certainty she will ever do so. And if she eventually wants a car or has a craving for broccoli, she will be obliged to pay at the counter before receiving the vehicle or nour­ishment. She will get no free ride or food, at the expense of another consumer forced to pay an inflated price.

So no, it doesn’t follow that Congress can make us eat broccoli if the Commerce Clause allows an individual mandate.

The Medicaid expansion. One of the ways ObamaCare increases the number of people with coverage is that it expands eligibility for Medicaid. Everybody under 65 with a household income less than 133% of the poverty line becomes eligible.

Medicaid is a federal/state partnership, so the expansion can only happen if the states go along. The ACA tries to make it painless for the states to cooperate by covering 100% of the cost of the expansion for the first two years, and 90% thereafter. It tries to make the expansion painful to turn down by saying that Medicaid is a take-it-or-leave-it deal. States can go along or lose the Medicaid funding they already get.

Roberts found that this was too coercive, though he didn’t specify what makes a non-cooperation penalty too high. Ginsburg finds that the Medicaid expansion is within the normal power of Congress to offer funding with conditions, and does not see the take-it-or-leave-it part as a penalty at all, since each year is a new appropriation, subject to its own conditions.

Future Congresses are not bound by their predecessors’ dispositions; they have authority to spend federal revenue as they see fit. The Federal Gov­ernment, therefore, is not, as the Chief Justice charges, threatening States with the loss of “existing” funds from one spending program in order to induce them to opt into another program. Congress is simply requiring States to do what States have long been required to do to receive Medicaid funding: comply with the conditions Congress prescribes for participation.

As I said above, I doubt the states will opt out anyway. If they do, then ObamaCare will cover somewhat less than 30 million new people, and the opting-out victims will be poor and near-poor people.

The conservative dissent. Justices Scalia, Thomas, Alito and Kennedy combine in a dissent that is both radical and polemic, full of scary quotes about the Commerce Clause turning into “a font of unlimited power” or “a general authority to direct the economy”.

Its conclusion is that the ACA must be thrown out in its entirety.

Think about that: Based on a legal theory that did not exist two years ago, and whose advocates are almost entirely in conservative think tanks, the Court came within one vote of striking down the biggest piece of social legislation in half a century.

Salon’s Paul Campo has an even scarier theory: Looking at internal evidence in the text, Campo speculates that the conservative dissent was originally written to be the majority opinion, and that Roberts changed his mind late in the game.

So we dodged a bullet, and the country gets to have RomneyCare. Unless it elects Romney. Then the Happy Dance will be over.

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  • John L  On July 2, 2012 at 4:07 pm

    Roberts did indeed switch, says this leak-based story from CBS News

  • Anonymous  On July 2, 2012 at 8:47 pm

    Justice Ginsburg’s opinion is better characterized as a concurring opinion rather than a dissent, although she did (as Professor Stone put it) completely shred Roberts’ reasoning on the Commerce Clause.

  • TRPChicago  On July 3, 2012 at 9:38 am

    You make superb points: (1) The mandate, devised by the core conservative think tank, the Heritage Institute, was a conservative Republican plan (Heritage has since changed its mind) to meet a compelling public need that is getting much meaner in the meantime (Heritage may have changed its mind on this, too). (2) The activity/inactivity-“create commerce” rationale (in the most derisive sense of the word “rationale”, meaning to exert oneself into a yoga explanation) was concocted a couple years ago, having no previous constitutional significance … (3) and as Justice Ginsburg so thoroughly skewered it by pointing out that individuals can require health care without choosing it and without choosing – as such – to burden the rest of us to bear their burden in terms of dollars and our own ready access to emergency rooms and other medical care. Health care and insurance for it IS by its character in interstate commerce, put there by both providers and consumers.

    That there may be a few outliers who choose to live without health care – and thereby to try to opt out of commerce – in no way changes the ability of Congress to legislate for the common good under the Commerce Clause and the rest of the Constitution.

  • SamChevre  On July 3, 2012 at 9:59 am

    I think the difference between a tax and a mandate is more significant than you seem to.

    To me, it is like the differnece between a fine and a charge. I can pay a $50 fine for parking in front of a fire hydrant, or I can pay $25 to park in a parking lot for the day–but those aren’t the same sort of thing.

    • weeklysift  On July 4, 2012 at 9:09 am

      My point — and Roberts’ point, I think — is that if the word “penalty” in the ACA is replaced with the word “tax”, nothing actually changes. The same people pay the same amount of money to the same agency, and suffer the same consequences if they don’t pay.


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