Supreme Court health-care hearing: How bad does it look for 'Obamacare'?

The centerpiece of President Obama’s health-care reform law appeared Tuesday to be in serious peril after oral arguments at the US Supreme Court on the constitutionality of the law’s individual mandate.

Based on comments and questions posed during the two hour session, the nine-member high court seems to be divided 5 to 4 on whether Congress has the authority under the Constitution’s Commerce Clause to order every American to buy a government-approved level of health insurance or pay a financial penalty.

The session was dominated by skeptical – and at times highly critical – questioning from the court’s conservative members.

Perhaps most important, Justice Anthony Kennedy, a frequent swing vote on the court, expressed significant concerns about the mandate.

“Can you create commerce in order to regulate it,” Justice Kennedy asked Solicitor General Donald Verrilli soon after he began his argument.
 
 “That is not what is going on here,” the solicitor general replied. “What is being regulated is the method of financing the purchase of health care. That itself is economic activity with substantial effects on interstate commerce.”

Kennedy’s comment echoed arguments made by lawyers for the 26 states challenging the independent mandate. He noted that the government was facing a “heavy burden of justification” because of the unprecedented nature of the mandate.

It is never a good sign to receive such a comment so early in an argument, especially from Kennedy. The government’s prospects seemed to tumble downward from there.

“Can you identify for us some limits on the Commerce Clause,” Kennedy asked.

Mr. Verrilli said the government’s position would not justify the forced purchases of commodities to stimulate economic demand. Lawyers challenging the mandate have said frequently it would empower the government to order Americans to buy and eat broccoli and buy American cars.

“But why not,” Kennedy asked. “If Congress says that interstate commerce is affected, isn’t, according to your view, that the end of the analysis?”

“No,” Verrilli said. “In those situations Congress would be moving to create commerce. Here Congress is regulating existing commerce [in the national health-care market].”

At one point, Kennedy said that a scheme permitting the government to order Americans to buy insurance “changes the relationship of the federal government to the people in a very fundamental way.”

Some supporters of the health-care law took heart in Kennedy’s last question of the day. He said he agreed with a point made by the solicitor general that young uninsured individuals hold the power to affect health insurance rates and the costs of providing medical care in a way that doesn’t apply in other industries.

The question is potentially significant because it suggests Kennedy may agree with Verrilli’s position that the health-care mandate and the future application of the Commerce Clause power is limited by the uniqueness of the health insurance industry.

Chief Justice John Roberts posed a series of hypothetical questions that suggested a high level of skepticism about the mandate. Similar questions and hypotheticals were offered by Justices Samuel Alito and Antonin Scalia.

Justice Clarence Thomas did not comment during the session, but his past voting record suggests he will vote to invalidate the mandate.

As expected, the court’s liberal wing maintained a supportive posture toward the health-care reform law, the Patient Protection and Affordable Care Act, throughout the argument session.

“There is government compulsion in almost every government regulation,” Justice Sonia Sotomayor said, dismissing concerns of the conservative justices about the government ordering Americans to engage in commerce.

Justice Stephen Breyer staked out perhaps the most friendly position for the Obama administration and the health-care law. He said that in his view the Constitution’s Necessary and Proper Clause easily empowered Congress to select the means to accomplish its regulatory goals.

He cited the landmark 1819 case McCulloch v. Maryland, in which the court upheld Congress’ power to create a national bank even though the Constitution nowhere explicitly authorizes creation of such a bank.

Breyer said that if Congress could create a national bank “out of nothing” under the Necessary and Proper Clause, it could certainly regulate the national health insurance market by requiring Americans to buy insurance.

Paul Clement, the lawyer for the 26 states challenging the health-care reform law, said that unlike the health-care mandate, once the national bank was created in 1800s the federal government did not then force US citizens to deposit all their money in it.

Justice Scalia said that while the individual mandate may have been deemed necessary by Congress to regulate the health-care market, it was not a “proper” use of federal authority under the Commerce Clause.

The case, Department of Health and Human Services v. Florida (11-398), is seen by legal scholars as the most important high court examination of federal power under the Commerce Clause since the New Deal of President Franklin Roosevelt.

A decision is expected by late June.