Mar 272012

I’ve been reading the transcripts of and commentary about the US Supreme Court arguments taking place this week about the constitutionality of the “individual mandate” and associated penalty contained within the provisions of the Patient Protection and Affordable Care Act (2010).

Before I get into any analysis, a seeming triviality: many of the news reports about this case are noting the fact that its opponents refer to the act as “Obamacare,” as if this were some kind of novel piece of slang. It’s not. What’s new is that, ahead of these oral arguments, the Act’s supporters have started embracing the term instead of discouraging its use, as if Barack Obama himself has delivered this manna to the unhealthy. Frankly, I don’t think Obama has even read the full text of this legislation, so I refuse to give him sole credit (or blame) for it, and will refer to it by its acronym PPACA, which is the norm when referring to legislation of the American Congress. (What, did you think PATRIOT Act was capitalised because it’s a big deal? No: it’s because it’s the Uniting (and) Strengthening America (by) Providing Appropriate Tools Required (to) Intercept (and) Obstruct Terrorism Act of 2001. American politicians are nothing if not massively cheesy.)

Now let’s address why I’m writing this blog post. This case is an extraordinarily big deal, and you will have a hard time understanding why if all you read is the news media accounts of the arguments. The American media does not want to go into any great analysis of the issue, for fear that you might draw your own conclusions, and the British media does not understand the significance. In the British media in particular, you will find reporters utterly baffled by what appears, to them, to be a sneaky, underhand challenge of the president himself under the pretext of a legal technicality.

Whether or not a law, or a part of a law, is constitutional is simply not a legal technicality. The Constitution is the basis for all federal government in the United States. The federal government simply may not make laws that contravene, or surpass, what the Constitution allows it to do. The law, or the provision within the law, cannot be imposed upon the American people if it is not constitutional. And one of the basic rights Americans have is to challenge the federal government about the constitutionality of its laws. That British journalists don’t seem (or want) to grasp this, simply because they personally think the PPACA is a good thing, makes them shitty journalists.

So. What is the issue at stake?

The challenge to the PPACA is about the provisions in section 5000A, which require Americans to be covered by health insurance (whether purchased individually or through their employer) or incur a penalty. These parts of the law are collectively referred to as the “individual mandate” or the “minimum coverage provision.”

The challengers, in this case, are a number of American states and some associated individuals. Their basic contention is that the US Constitution does not permit the federal government to compel people to purchase health insurance when they are not purchasing health care services.

In this case, you have two participants: the challengers, and the US federal government (as represented by the Solicitor General). This case has gone through the federal courts already, and the Supreme Court agreed at the back end of 2011 to hear it. This is significant: the Supreme Court can choose not to hear cases, so the fact it has chosen to hear this one means the Court believes that there is enough doubt about the matter, or enough importance about the question at hand, to make it an issue worth settling. The Court’s decision is binding and, in this case, may also be precedent-setting. (This is kind of what puzzles me about the position of many British journalists; if the high court of the US thinks it’s important enough to discuss, who are you to call it a trivial technicality?)

But enough about British journalists. Part of the reason reportage about this case is so crappy is that there are lots of different strands of argument involved, not all of which make a lot of sense if you consider them in isolation.

For example, yesterday’s arguments centred around whether or not the Court could even hear the case. Here’s the background: as the case has made its way through the lower levels of courts, the government’s position has been that the penalty for not purchasing health insurance is, effectively, a tax, and taxes do not come under the jurisdiction of any court until the complainant has paid the tax, requested administrative redress, and been refused. Then, and only then, can the complainant bring suit. (Challenges to tax are covered under a law called the Anti-Injunction Act.) The government’s argument has been that, since the mandate and penalty/tax do not come into force until 2014, the law cannot be challenged on those grounds in 2012, because nobody has yet paid the tax and therefore nobody can at this point bring suit.

Interestingly, once the Court agreed to hear the case, the government switched positions, and yesterday argued before the justices that the penalty is not a tax subject to the Anti-Injunction Act. Because the challengers were making the same argument, the Court had to appoint independent counsel (the amicus curiae) to argue that the penalty is a tax. Ultimately, yesterday, the Court appeared to accept that the penalty is not a tax subject to the Anti-Injunction Act. Nobody was surprised by this; why would the Court schedule three days of argument about the matter if it envisioned recusing itself after the first day?

So. We proceed to today’s arguments, which were about the constitutionality of the mandate itself. I have read the transcript, but I am not a lawyer, so take what I am about to describe with the understanding that I am both ignorant and naive to a certain extent. However, you can read the stuff yourself on the SCOTUS website; the arguments were very accessible to the layman.

The government argued as follows. In the Constitution, the federal government is allowed the power to regulate commerce, and issues affecting commerce, between the states (the “Commerce Clause”). There are two commercial markets at issue: one is for health care services, and one is for health insurance. All people in the US are participants in the health care market, because all people in the US will require health care at some point. Health insurance is the method by which people finance their health care in the US, and therefore all people are technically participants in the health insurance market also. Ergo, Congress has the right to regulate both, as both constitute interstate commerce, even to the point of requiring people to purchase health insurance at a given point in time, because their failure to do so is an issue that affects commerce within that market.

(There is also a whole bunch of stuff about how the penalty for not buying is a tax, but I didn’t follow that part too well, and since the government argued yesterday that it is only kind of a tax, I’m not sure how germane the point is anyway.)

What it is important to understand about the government’s position is that, in the US, even if you do not have health insurance, you cannot be refused health care. So what happens is that people without the means to pay for their health care nevertheless receive it, which drives up the cost of care, which in turn drives up premiums for those people who are insured. So the government is arguing that because some people’s failure to insure themselves affects the price of everyone’s health care and insurance, Congress has the right to interfere in the purchasing (or not) of health insurance under the justification of the Commerce Clause.

By compelling people to purchase insurance (and penalising/taxing people if they don’t), the government’s aim is to reduce the free rider problem and thus lower the cost of care and insurance premiums.

If you read the transcript, Solicitor General Verrilli does a lot of waffling about the “40 million Americans who don’t have access to care,” but the upshot of what he’s saying is this: actually, these people can get care, they just don’t pay for it. So in order to cover the cost of people who can’t pay for the care they definitely do get, everyone has to be insured. That way, the insurance companies can use the premiums paid by the healthy to subsidise the cost of the care for unhealthy people who can’t pay for it themselves. Thus, because everybody is affected by this way of ensuring poor people can still get health care, Congress can do what it chooses, including compelling purchase, to deal with the problem.

So far, so clear. The system envisioned in the PPACA is one of the healthy subsidising the unhealthy.

The challengers argument was somewhat more complicated.

First, they disputed the “everybody is a participant” claim. Many of the Americans who do not have health insurance are young, healthy people who choose to spend their money on something else, believing themselves to be at low risk of requiring health care. Thus, these people are not, at a given point in time, participants in either the health care or health insurance market. The Commerce Clause, they say, does not give the government the right to compel people to participate in these markets when they otherwise would not choose to do so.

Second, they disputed that the health care and health insurance markets are so intertwined as make eventual participation in the one the justification for forced participation in the other. There are, they said, other means of subsidising the unhealthy who cannot pay for their care than compelling the purchase of health insurance. Social Security was brought up: a general tax, linked to income, levied on everyone, which the federal government then disburses to those requiring the payments, would be constitutional in a way the mandate is not, because the Constitution does give the federal government the right to levy taxes. (This is, in fact, how Medicare and Medicaid work at the moment.) The challengers also pointed out that the problem the provision is attempting to solve is one created by the government in the first place: namely, the government forces emergency rooms to treat those who cannot pay, and it forces insurance companies to insure high-risk individuals. If it did not do those things, there would not be a free rider problem, and so there are other solutions than the mandate imposed by the PPACA.

During the arguments, the justices focused particularly keenly on two problems with these issues: (1) are the health markets unique, and if so, what specifically is the limiting principle that will stop the federal government from engaging in compulsory purchase in other markets? and (2) if the challengers concede that the federal government can force people to purchase health insurance at the point of purchasing health care itself (which, apparently, they do concede), what is the problem, precisely, with moving that point of compulsion forward in time, when it will have the most beneficial effects?

A lot of today’s commentary was along the lines of “Obamacare in danger of being struck down,” because the justices seemed particularly pointed and hostile in their questioning, but I think this is premature. The mandate may be ideologically horrific to the average American mindset, but that does not mean it is unconstitutional. And the role of the justices is to pick holes in the arguments and expose the weaknesses; that doesn’t mean those weaknesses are fatal. The most aggressive questioning came from Justice Scalia, and I admit the Solicitor General didn’t seem particularly articulate in his answers—at one point, Justice Sotomayor summed up his argument for him much better than he had done, and he didn’t seem to notice—but that doesn’t mean his points are invalid.

There were a lot of other issues and sidelines in the arguments, but there was one point that came out pretty strongly to me, and it was made by Michael Carvin for the challengers. What he argued, in effect, was that the government’s own argument is self-contradicting. At the moment, people with insurance effectively subsidise those without. Under the PPACA, people with insurance will effectively subsidise those without. There is no difference in where the cost is borne; it is always borne by the people with insurance. What the PPACA proposes to do is to increase the pool of insured people to pay the subsidy, thereby spreading the cost over a larger base. The PPACA itself, and the government, admit this is the entire purpose of the mandate: to make healthy people who do not currently purchase health care purchase insurance in order to cover the cost of those people who cannot pay for the health care they purchase.

Therefore, the government is implicitly admitting that there are some people who are outside the market, who need to be drawn into the market in order to spread the cost of subsidy around—and since that is the whole purpose of the mandate, the existence of the mandate demonstrates that not everybody is a participant in these markets, and therefore are not engaging in commerce that can be regulated in this way by Congress.

It’s a neat little argument, and I wish he’d been more explicit about how circular it is. He does call it “bootstrapping,” though, and it’s true. If everyone was a participant in these markets, which is the government’s justification for this falling within the power of the Commerce Clause, there would be no need for the mandate; but because the point of the mandate is to make everyone participate, it is itself an admission that not everyone does, and therefore it can’t be justified by the claim that everyone is already a participant, because if they were, the government wouldn’t need to mandate that they participate.

The only other interesting thing to point out is that, although everyone involved seems keen not to get into the merits of the law as a whole, with the whole, y’know, making sure people don’t bankrupt themselves in order to stay healthy, the people who are most prone to talking about the merits of the law appear to be the justices themselves. This is why I think the commentators are premature: while it’s nice to think that Supreme Court judges are impartial, they’re not. They’re perfectly capable of allowing their approval of the aim of the PPACA to bias their views on its constitutionality—and by the same token, of allowing their repugnance at the methods of the PPACA to affect their judgment of its intention.

And that’s true of a lot of people right now, I think. Health care in the United States is totally fucked up, and I don’t think it’s really possible to dispute that. However, the PPACA is not the only possible solution to the problems, and my personal view is that it’s about the worst one, in fact. But people on the right are in danger of defending a really shitty situation when they attack this law, and people on the left are in danger of defending a really shitty law when they attack the current situation.

This is why, going back to the beginning, the label “Obamacare” is so pernicious. Would people really be as blindly and tribally partisan about this law if it didn’t involve a cult of personality and were, instead, the boring old PPACA?

Read the transcript for Monday’s arguments.

Read the transcript for Tuesday’s arguments.