PPACA at the SCOTUS: The Case of the Case of the Year (that’s Obamacare to you!)

Obama signing Affordable Care Act in 2010

"The Moving Finger writes; and, having writ, Moves on: nor all thy Piety nor Wit, Shall lure it back to cancel half a Line, Nor all thy Tears wash out a Word of it." (Except maybe this time.)

An exciting week is coming up for constitutional law geeks of all stripes: the Patient Protection and Affordable Care Act (or “PPACA,” now for some reason usually abbreviated only as the “ACA”) comes to the Supreme Court starting this morning for a history-boggling 5-1/2 hour of oral arguments.  This is expected to be the Court’s “case of the year” — although the opportunity for an anti-climax is huge.

My own take on PPACA is that everyone — from legal scholars to laypersons — has been way too sure about how this case will turn out.  I’ve been fighting with people about it for literally over two years on liberal website Daily Kos (because I think that the arguments made against PPACA’s constitutionality are not trivial and absurd) and with conservatives in other places (because I also think that the arguments are not ultimately convincing.)  If I had to make a prediction right now and could get odds, I would do the equivalent of taking the odds and betting on green in roulette: predicting that the Court will decide, almost absurdly, on a technicality that the case is not ripe for a decision until 2014.  Prepare yourself for that disappointment; we’ll know by the last days of June.

For those of you who want a fine primer to the case (written from a liberal perspective by my frequent antagonist in argument, Armando Llorens), take a few minutes to read his introduction of today; you might also want to plan on reading his commentary on the arguments over the next week, which are sure to be interested.  Armando is absolutely convinced that the legal opposition to PPACA is crackpot and that the only way that the law can be found unconstitutional is if the Court just decides to muscle its way to a desired end, as it did with Bush v. Gore and Citizens United v. FEC.  I’m less convinced.

I’m interested in what people think about this case before I give you my own take, if you want to jump down and post a comment now, because I find the certainty of people on all sides about the legal question so fascinating.  So, please, go write an initial comment, if you’d like, before reading on.

Armando (no one calls him Llorens) presents the four questions that the Supreme Court will consider this way:

The Court granted cert to hear the following questions:

(1) Whether the suit brought by respondents to challenge the minimum coverage provision is barred by the Anti-Injunction Act, 26 U.S.C. 7421(A). (Presented in Department of Health and Human Services v. Florida, Docket No. 11-398.)(2) Whether Congress had the power under Article I of the Constitution to enact the minimum coverage provision, the individual mandate. (Presented in various cases.)

(3) “Does Congress exceed its enumerated powers and violate basic principles of federalism when it coerces States into accepting onerous conditions that it could not impose directly by threatening to withhold all federal funding under the single largest grant-in-aid program, or does the limitation on Congress‘s spending power that this Court recognized in South Dakota v. Dole, 483 U.S. 203 (1987), no longer apply?” (This question comes from the cert petition (PDF) filed by the challenging states in  Florida, et al v. HHS. (To say it is an argumentative presentation is to understate the case.)

(4) Whether the ACA must be invalidated in its entirety because it is nonseverable from the individual mandate if it exceeds Congress’ limited and enumerated powers under the Constitution.

As you can tell, the controversy is largely (but not entirely) about the “minimum coverage provision,” also known as the “mandate,” which requires almost all citizens to either have health insurance (either from the government if they are eligible or purchased privately if not) or else pay a penalty — unless they are exempt from that penalty.  (Ironically, Obama had been opposed to such a mandate as a candidate — this was Hillary’s and Mitt Romney’s hobbyhorse — but he ended up accepting it in the course of the health care reform debate.)  The controversies lie in whether the government can force people to purchase a private product as a sheer function of existing, something that has been cleverly and insightfully described as “regulating inactivity.”

The weird justification of PPACA

To me, one of the most interesting things about this controversy is that PPACA could almost certainly have been constitutional in either of two ways.  The crux of the controversy over “regulating inactivity” arises because Congress is acting through its Commerce Clause powers, more on which below.  The Commerce Clause has been interpreted as allowing the government to regulate (1) the channels of interstate commerce directly, (2) the instrumentalities of interstate commerce, even if this means regulating intrastate (within-state) activities affecting them, and (3) activities having a substantial relation to interstate commerce.  Various decisions by the conservative majority have over the past two decades clarified that this power does not extend to local criminal activities (such as the relevant provisions of the Violence Against Woman Act), except for growing marijuana, which can be regulated by the federal government as part of a complex scheme of commerce regulation.  (If that last sentence doesn’t make sense to you, you’re probably reading it correctly.)

The strange thing is that this whole fight over the meaning of the Commerce Clause is entirely unnecessary.  That, after all, is not the only source of the federal government’s power.  There’s a far more straightforward one: the power of taxation.  There is no reasonable doubt that Congress could implement PPACA if it had been willing to call the health care assessment a tax.  Yes, this whole case arises from the Obama Administration’s not wanting to be accused of imposing a tax to pay for health insurance. I understand why, politically, they wanted to do that; clearly, though, that exercise of caution has backfired.

Here’s how government health insurance should work: offer it, at least as an option. Tax people to cover the cost; don’t worry, it will save them money overall. Let people credit the cost that they pay for private insurance against that tax. Then everyone’s covered, you don’t have the problem of regulating inactivity, you don’t have the problem of forcing people to purchase private contracts. The default contract is with the government, but if you want to do something else, that’s your choice. As a constitutional matter, this would be impregnable.

The real success of Republicans was making Congressional Democrats so very scared of taxation — even when it saved people money — they they had to contort themselves, their policy, and their stated justification for it to the point where it very well might be unconstitutional. The arguments offered by the states are not stupid; allowing Congress to regulate inactivity, and thus to force people to enter into private contracts as a mere consequence of existing rather than as a result of activity, would break new legal ground. (Assessing a charge to someone for their merely existing has a name: it’s called a “tax”.  And, as a tax, it’s legal.)

Similarly, even offering a “public option” — as should have happened — takes away the “forcing people into private contracts” argument entirely by allowing people to contract with the government.  The main counterargument made against this is pretty weak: pointing out that, for example, the state requires the presence of car insurance for someone to drive a car.  But guess what: you don’t have the right to drive a car!  That’s why it’s called a “license” — the state licenses you to do it.  Contracting for private car insurance is not a function of mere existence; there are plenty of adults who can’t or don’t drive cars.

To understand the Supreme Court cases, imagine that Congress had imposed PPACA under its expressed power to raise a navy.  There are probably convoluted ways to do that — declare that everyone is part of the Navy, require them as a condition of naval service to have health insurance, then exempt most people from any actual service — but they would be absurd.  A PPACA justified under the power to form a Navy would be struck down even if it were justifiable under the Taxation Clause — or, for that matter, the Commerce Clause.  That’s sort of where we are now.

The blind spot in the eyes of PPACA’s defenders

Reading Armando’s defense of the law is quite instructive.  He follows it logically from the first step through to the conclusion — and then concludes that the Supreme Court can only reject his logic because in the final analysis the Supreme Court can do whatever it wants.  The problem is that his argument proceeds from the start down the wrong path.

It is my view that this case, if one applies the settled precedents, is an easy case—the ACA is clearly constitutional. There can be no question that the health insurance law is national in character. Indeed, the focus on the individual mandate demonstrates that every other aspect of ACA, save the absurd (to me) federalism challenge to the Medicaid expansion provisions, is accepted as within the power of Congress.

Once it is accepted that the federal government can act in the area, the Commerce power exercise by the Congress in ACA is to be judged under a rational basis standard.

Yes, it’s an easy case because Armando makes it easy on himself by not questioning the nature of what the power of the Commerce Clause actually is.  (He cites some work from the esteemed law professor Jack Balkin of Yale; I had this argument with Balkin back at the time.)  Yes, the Commerce Clause allows regulation of A, and B, and C, and D all the way to Z (or, after the last couple of decades, maybe only all the way to W), but what is the nature of that regulation?  It may be, for the sake of argument, that the Commerce Clause reaches almost everything, but the argument that the Commerce Clause gives Congress the power to, in the interest of that regulation, engage in transvaginal ultrasounds or monthly prostate exams or to make people hop and skip rather than walk would be absurd — even if it technically met the other requirements.

For Armando, what prevents such abuses is the requirement that the regulation be rationally justifiable, but I don’t think that that’s the point at all.  What prevents such abuses is that some exercises of power, to whatever target, are in the nature of power under the Commerce Clause and some are not.  The argument that Commerce Clause power applies only to activity and not inactivity is a perfectly cogent one.   It’s one that has never come up before, to my knowledge, because no one has ever previously tried to regulate inactivity deriving from mere existence.  (The closest thing I can think of is the military draft — but this derives from the separately enumerated power to raise armies, not from the Commerce Clause.)  Why hasn’t anyone tried to use the Commerce Clause in this way before.  Because that’s a power of taxation, not a power of regulation of commerce!

All arguments against these cases that proceed from this blind spot, however intricate and lovely, are flawed.

So what’s going to happen?

I don’t think that the Supreme Court will overturn PPACA on this basis.  They’re already rightly seen as having gone way out of line in the interest of conservative judicial activism, and overturning PPACA on what is in essence a technicality — a huge technicality, but still a technicality — would create huge headaches for the Court.

One thing that the court could do is say “OK, no mandates, but you can keep the rest of the act.”  (This is the fourth question they will hear, from the list above.)  This might be fun for the likes of me, in that it would probably destroy the private insurance sector (of which I am not too fond) altogether, but would probably be considered to be on the extreme side.  Severability of the mandates seems unlikely; probably either the entire Act rises or falls together.

Part of me thinks that the narrowest change that could render the bill constitutional — requiring a public option so that people wouldn’t have to purchase private insurance — would be more in keeping with the task of the Supreme Court, which is to try to make the legislation constitutionally valid if they can construe its language a way that allows that result, than just punching the bill into unconsciousness, but I don’t think that the Supreme Court could or would read the possibility into the bill.  What they’re supposed to do is send it back to the manufacturer for repairs — and the fact that the manufacturer doesn’t want to produce the product anymore is not supposed to make a difference.

There is, in fact, an even easier solution: find it constitutional as an exercise in federal taxing authority.  But the Obama Administration has taken great pains not to even make that argument; while in certain circumstances a Court can of its own accord consider arguments that neither a part or an amicus brief forwards, it’s considered bad form (and sometimes grounds for reversal.)  The reason that the Supreme Court might be able to get away with it is that they are the freaking Supreme Court, and who’s going to stop them?  (Well, we’d have to round up a posse….)

Armando thinks that the Anti-Injunction Act escape hatch mentioned at the end of the article is the most likely outcome (and the most anti-climactic.)  The basic reasoning is — a court is not supposed to mess with a tax until the tax goes into effect, and this doesn’t go into effect until 2014.  The necessary fix is small — although the will of Congress to require it is smaller.  Maybe Congress will solve the problem by then — or maybe the President will decide not to enforce the mandate if it seems likely to be unconstitutional.  (There may be other ways of keeping everyone from not buying insurance until they get sick; maybe we can draft them into the Navy after all!)

Judge Brett Kavanaugh suggested this out in his concurrence to the DC Circuit’s affirmance of PPACA — and I have to say that it is the sort of thing that constitutional lawyers love.  Judges pride themselves on evading action for as long as possible, until it is totally necessary; this is how they keep themselves, or keep up the fiction that they are, not intent on using their power to press their will.

What happens if the PPACA case is put aside on Anti-Injunction Act grounds?  Honestly, it depends on who is elected President this year.  If it’s Obama, he might refuse to enforce the mandate and rouse the insurance companies to pass the necessary fix, especially as people have gotten adjusted to (or even hooked on) the idea of the stability and protection from worst-case financial disaster offered by PPACA.  If it’s Romney, he may try to close the whole thing down.  If it’s Santorum — well, then it won’t matter; we may not still have an advanced civilization here in two years.  One certainty is that the public would be confused.  One less common likelihood is that politicians and lawyers might be not much less confused — or even more so.

This “opting-out option” would probably have one clear effect, though: it would tell voters that their vote really would determine whether health care reform would stay or go.  The Obama Administration still, even today, has not really sold the public on why PPACA is a good thing; making it the central issue in the fall campaign may be one of the few chances Republicans have to win.

Combine that with a conservative Supreme Court majority, and that’s part of why Armando things this squishy and confusing outcome is the most likely — it’s almost like asking voters “OK, do you want this or not?”  It’s also the one I’d most want to bet on, as of a few hours before the hearings begin; the difference is that I’d still want odds.

UPDATE 3/26: And, Armando and I are immediately skunked by the Court!  Despite that the fines for non-compliance (by those not exempted by PPACA) operate the same way as a tax does, the Court seems not inclined to accept that the mandatory premiums (or fines) constitute a tax.  (For Scalia, it’s as simple as “they don’t call it a tax, so it’s not a tax.”  For Ginsburg, it’s that it doesn’t raise revenue — even though its clear purpose is to ensure that revenue is raised.)  If it’s not a tax, then the Anti-Injunction Act (which applies to tax measures) doesn’t apply.  So the Obama Administration will apparently win its battle to block the only exit that could have kept the court from deciding the case on the merits.  What this likely shows, among other things, is that the Court is eager to get to the merits of the case.  This is hubris on the part of the Administration.

About Greg Diamond

Somewhat verbose attorney, semi-retired due to disability, residing in northwest Brea. Occasionally runs for office against bad people who would otherwise go unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Corrupt party hacks hate him. He's OK with that too. He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)