I’ve been thinking about this for a while, but haven’t had a chance to put pen to paper, to use a thoroughly outdated metaphor. So here it is: the Affordable Care Act is constitutional for two straightforward reasons that should have been obvious to the Justices, but that unfortunately were not laid out nearly as clearly and concisely as they should have been:
- The health care market is unique and is profoundly unlike any other market in the U.S., for one simple reason; and
- The “individual mandate” is not a mandate at all.
Why are these two points so important? The first is critical because it supplies the “limiting principle” that Justice Kennedy was so desperate to find – it is, in other words, the answer to the “if Congress can do this, it can do anything” slippery-slope argument. And the second is critical because it drastically diminishes, if it does not completely eliminate, any significant Commerce Clause issue in the case. Frankly, the case should be an easy one and never should have gotten this far – and I confess that I am among those who didn’t fully appreciate the non-mandate nature of the mandate until recently.
Health care is unique
The argument on the first point is pretty simple. In this country, if you are in need of emergency medical care, you will get it, regardless of how much it costs, and regardless of your ability to pay for it. That principle is firmly ensconced in federal law, and appears in many state laws as well. And it results in tens of billions of dollars of “uncompensated care” every year.
Now, the mere fact that you can get expensive medical services without paying for them doesn’t render health care a unique market. After all, if your house catches on fire, the fire department shows up and doesn’t send you a bill later. But the difference between health care and the fire department is that the latter is entirely paid for by tax dollars, while the former is not.
So here is what makes the health care market unique: it is the only market in this country that (a) supplies billions of dollars of services to people who cannot pay for them, and (b) is not funded by the government. That’s your limiting principle, Justice Kennedy: there is simply no other market in the United States that works this way.
What’s worrisome is the extent to which some of the Justices seem not to understand this, and the extent to which the government failed to point it out to them when it had the opportunity. Here, for example, is a colloquy between Chief Justice Roberts and Solicitor General Don Verrilli, from the two-hour argument on mandate day:
GENERAL VERRILLI: … In the health care market … the distinguishing feature of that is that they cannot — people cannot generally control when they enter that market or what they need when they enter that market.
CHIEF JUSTICE ROBERTS: Well, the same, it seems to me, would be true, say, for the market in emergency services: police, fire, ambulance, roadside assistance, whatever. You don’t know when you’re going to need it; you’re not sure that you will. But the same is true for health care. You don’t know if you’re going to need a heart transplant or if you ever will. So, there’s a market there. In some extent, we all participate in it. So, can the government require you to buy a
cell phone because that would facilitate responding when you need emergency services? You can just dial 911 no matter where you are?
GENERAL VERRILLI: No, Mr. Chief Justice. I think that’s different. It’s — we — I don’t think we think of that as a market. This is a market. This is market regulation. And, in addition, you have a situation in this market not only where people enter involuntarily as to when they enter and won’t be able to control what they need when they enter, but when they -
CHIEF JUSTICE ROBERTS: It seems to me that’s the same as in my hypothetical. You don’t know when you’re going to need police assistance. You can’t predict the extent to emergency response that you’ll need, but when you do — and the government provides it. I thought that was an important part of your argument, that when you need health care, the government will make sure you get it. Well, when you need police assistance or fire assistance or ambulance assistance, the government is going to make sure to the best extent it can that you get it.
GENERAL VERRILLI: I think the fundamental difference, Mr. Chief Justice, is that that’s not an issue of market regulation. This is an issue of market regulation, and that’s how Congress — that’s how Congress looked at this problem. There is a market.
This, unfortunately, is a terrible answer by Verrilli. What he should have said is something like, “Mr. Chief Justice, the analogue to your emergency services hypothetical in the health care realm would be a single payer system where government pays for everything. But, of course, that is not the system we have in this country. What makes the health care market unique is that, unlike the market for emergency services, the government requires that people get the health care they need, no matter how much it costs, but it does not pay for it. That simply does not happen in any other market.”
Justice Kennedy got close to this idea at the end of “mandate day,” when he said:
I think it is true that if most questions in life are matters of degree, in the insurance and health care world, both markets — stipulate two markets — the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries. That’s my concern in the case.
If Kennedy follows that line of thinking to where it should take him, he could well be the fifth vote to uphold the Act’s constitutionality. But it should not have taken two hours of argument to get there. It should have been the first thing out of the government’s mouth.
The mandate that isn’t
The key to this issue came not in the big “mandate day” argument, but in the previous day’s argument on whether the Anti-Injunction Act barred the Court from hearing the case at all.
JUSTICE KAGAN: The nature of the representation you made, that the only consequence is the penalty, suppose a person does not purchase insurance, a person who is obligated to do so under the statute, doesn’t do it, pays the penalty instead, and that person finds herself in a position where she is asked the question, have you ever violated any federal law, would that person have violated a federal law?
GENERAL VERRILLI: No. Our position is that person should give the answer “no.”
JUSTICE KAGAN: And that’s because -
GENERAL VERRILLI: That if they don’t pay the tax, they violated a federal law.
JUSTICE KAGAN: But as long as they pay the penalty -
GENERAL VERRILLI: If they pay the tax, then they are in compliance with the law.
So the “mandate” isn’t a mandate at all. It’s a choice: you can carry health insurance according to the terms of the Affordable Care Act, or you can see your taxes go up a bit. That’s it. (In fact, the IRS has even less ability to require payment of this “penalty” than it has with other taxes, as it cannot pursue criminal penalties or even file a tax lien based on failure to pay.) And when you see it in those terms, how is the “mandate” any different from any of the other numerous incentives that Congress has written into the tax code over the years in order to encourage behavior that it deems socially beneficial? If you hold a home mortgage loan, if you buy a hybrid car, if you replace your windows, if you donate to charity, even if you are self-employed and buy health insurance, that behavior affects your taxes. True, in the case of the Affordable Care Act, your failure to behave the way Congress wants you to means that your taxes go up, whereas in the examples I gave your engaging in the favored behavior means they go down. Is that a difference of constitutional magnitude? Frankly, I cannot imagine why it should be.
The “individual mandate” in the Affordable Care Act is often compared to a state’s “mandate” that anyone who drives a car must carry car insurance. But the Massachusetts car insurance law shows us what a real mandate looks like.
Whoever operates or permits to be operated or permits to remain on a public or private way a motor vehicle which is subject to the provisions of section one A during such time as the motor vehicle liability policy or bond or deposit required by the provisions of this chapter has not been provided and maintained in accordance therewith shall be punished by a fine of not less than five hundred nor more than five thousand dollars or by imprisonment for not more than one year in a house of correction, or both such fine and imprisonment….
In other words, driving a car in Massachusetts without carrying car insurance is a crime, and you can go to jail for not complying. That, friends, is a mandate. Why the government didn’t hammer home this distinction every chance it had is completely beyond me.
All of this stuff does appear in the government’s briefs, and most of it emerged at one time or another at oral argument. But it was much, much harder to find than it should have been. It seems to me that the government got caught up in the other side’s framing of the issues, rather than framing its own case in the most advantageous way. If the Court strikes down the Affordable Care Act, the government’s presentation of its case may go down as one of the great screw-ups in Supreme Court history.