Rough day for Obama healthcare law: Kennedy among mandate skeptics

The Obama administration’s health insurance mandate faced severe skepticism Tuesday from conservatives on the Supreme Court during a pivotal morning of oral arguments on the landmark legislation.

{mosads}Justice Anthony Kennedy, the court’s most consistent swing vote, repeatedly voiced doubts about the mandate’s constitutionality, suggesting he could side with the court’s four staunch conservatives to overturn President Obama’s healthcare law.

“That changes the relationship of the federal government to the individual in a very fundamental way,” Kennedy said.

While the court’s four liberal justices at times gave a more vigorous defense of the law than the government’s lawyer, Solicitor General Donald Verrilli Jr., the sense of a possible election-year defeat in the courtroom for the president’s signature domestic achievement was unmistakable.

The Hill’s Supreme Court coverage:
• AUDIO & TRANSCRIPT: Day 2 arguments
• GOP up, Dems down after mandate talk
• GOP leaders not predicting SCOTUS healthcare decision
• Toobin: Law ‘in grave, grave trouble’
• Reid: ‘I’ve been in court a lot more than Jeffrey Toobin’
• Bachmann: We haven’t raised ‘white flag of surrender on socialized medicine’
• GOP doctors decry health law’s ‘very bad medicine’
• AUDIO: Alito questions mandate as a tax

Jeffrey Toobin, a lawyer and legal analyst who writes about legal topics for The New Yorker called Tuesday a “train wreck for the Obama administration.”

“This law looks like it’s going to be struck down. I’m telling you, all of the predictions, including mine, that the justices would not have a problem with this law were wrong,” Toobin said Tuesday on CNN. “I think this law is in grave, grave trouble.”

The Supreme Court’s oral arguments are not always a reliable indication of how the justices will rule, and it’s not uncommon for the court’s decisions, or specific justices’ positions, to go in a different direction than they seemed to be headed during arguments.

Nonetheless, the back and forth Tuesday invigorated Republican lawmakers in attendance, who voiced confidence the court would overturn the new law.

“I would say today the government had a tough day,” said Sen. Mike Johanns (R-Neb.). “That was my impression.”

Most Democrats weren’t as sunny, though a White House official said the arguments did not shake the administration’s confidence that the court will uphold the healthcare law. The official noted that conservative judges in lower courts also asked tough questions during arguments but ultimately ruled that the mandate is constitutional.

Tuesday’s session was the centerpiece of the court’s historic three-day argument, and the stakes were abundantly clear. Hundreds of protesters rallied outside the Supreme Court building as the courtroom filled up with a who’s who of government leaders, including Senate Minority Leader Mitch McConnell (R-Ky.), White House adviser Valerie Jarrett and Attorney General Eric Holder — Verrilli’s boss.

Supporters of the law had seen Chief Justice John Roberts and Justice Antonin Scalia as possible supporters of the mandate in addition to Kennedy, but the two offered aggressive questions during the two hours of arguments.The debate hinged largely on whether the mandate requires people to enter the market for health insurance or regulates the market for healthcare. Verrilli argued that everyone either uses healthcare or is at risk of unexpectedly ending up in the market for healthcare services. The mandate simply ensures that those services are paid for, he said.

Scalia wasn’t buying it.

“I don’t agree with you that the relevant market here is health care. You’re not regulating health care. You’re regulating insurance,” Scalia said. “It’s the insurance market that you’re addressing and you’re saying that some people who are not in it must be in it.”

Roberts also took issue with the way Verrilli framed the case.

“It’s good for you in this case to say ‘Oh, it’s just insurance.’ But once we say that there is a market and Congress can require people to participate in it … or, as you would say, that people are already participating in it — it seems to me that we can’t say there are limitations on what Congress can do under its commerce power,” Roberts said.

Verrilli struggled to articulate his case amid the tough questioning, after beginning the day by stumbling through his opening statement.

The performance left the court’s liberal justices at times making a more convincing argument that the mandate is constitutional.

Following an exchange between Verrilli and Scalia, Justice Sonia Sotomayor spent a full two minutes outlining the three main elements of the Justice Department’s position, then she asked Verrilli, “Which of these three is your argument? Are all of them your argument?”

Roberts pressed Verrilli to explain where Congress’s power to issue new mandates would stop. The lack of a “limiting principle” has dogged the Justice Department’s case throughout the process, prompting one lower-court judge to question whether Congress could also require citizens to buy broccoli, because a healthy diet would cut down on healthcare costs.

The Supreme Court justices revived the broccoli analogy and ran through several more, asking whether the government could mandate the purchase of cellphones, gym memberships, cars, prescription drugs or burial insurance.

None of those markets has the same type of cost-shifting that exists in healthcare, Verrilli argued. Federal law requires hospitals to care for people who cannot afford to pay, and the costs of that uncompensated care are passed on to the government and people with insurance.

According to the Justice Department, the decision to go without insurance therefore has a substantial effect on commerce and can be regulated, using a mandate, under the Commerce Clause.

Former Solicitor General Paul Clement, arguing against the healthcare law, said the court would be crossing a new threshold if it decides that Congress can regulate the decision not to buy something.

“The cost-shifting that the government tries to uniquely associate with this market — it’s everywhere,” Clement said.

Justice Elena Kagan asked whether Clement might be “cutting the bologna thin” by separating health insurance from healthcare.

“The two are inextricably interlinked,” she said. “We don’t get insurance so that we can stare at our insurance certificate. We get it so that we can go and access health care.”

Despite their skepticism while questioning Verrilli, Roberts and Kennedy pressed Clement to respond to the government’s position.

“The government tells us … the insurance market is unique. And in the next case, it’ll say the next market is unique,” Kennedy said. “But I think it is true that … 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.”

Conservative judges in lower courts have upheld the mandate on the grounds that healthcare is unique, due to the risk of accidents and the nature of its cost-shifting. Although other goods also get more expensive when people don’t buy them, there are few parallels to the requirement to treat uninsured patients.

The mandate is also considered essential to effectively implementing other parts of the healthcare law. Provisions requiring insurance companies to cover sick people, and prohibiting them from charging those patients higher prices, could dramatically raise the price of insurance if not counterbalanced with the mandate. 

“That seems to me a self-created problem” that could be solved by not imposing those regulations, Scalia said.

—This story was posted at 12:23 p.m. and updated at 8:31 p.m.