Supreme Court poised for landmark health care battle
There are a few things both sides agree on in the coming supreme court battle over Barack Obama’s signature healthcare reforms. One of them is that it is likely to prove the most politically significant constitutional decision in years, and the outcome could shape the future of Obama’s presidency.
For some conservatives, at stake is a question of fundamental liberties, characterised at its most extreme as to whether the government can force people to eat their brussel sprouts or go on a diet. For the government, the supreme court hearing beginning on Monday is an opportunity to defend what it regards as the most important piece of social justice legislation of recent times. But if the ruling, expected in June, goes against the president it could prove a severe blow to his campaign for re-election.
The court will hear a challenge by the attorney generals of 26 states and private business interests who argue that the healthcare law violates the constitution and tramples on individual freedoms by requiring almost all Americans to buy health insurance.
With an election looming and the public sharply divided on the healthcare reforms, the hearings are the most politically loaded since the court handed George Bush the presidential election over Al Gore in 2000. They are also scheduled to be the longest in recent history with nearly six hours set aside to hear challenges to the law.
“I think the court recognises the extraordinary importance of the case, not so much because of the jurisprudential issues but because of the political impact,” said Professor Michael Dorf, a constitutional law scholar at Cornell law school. “Suppose that the justices agree with the plaintiffs and say that this law exceeds the power of Congress, there are many ways Congress could get around that limitation and still have all of the power it has. The reason it would be important would be because it would have struck down the signature domestic policy accomplishment of a president. In that sense, the political stakes in this case are higher than in any case since Bush v Gore.”
The law, officially called the patient protection and affordable care act but derided by its opponents as “Obamacare”, was passed two years ago as a sweeping reform of the healthcare insurance industry. It is intended to extend insurance coverage to more than 50 million Americans who were priced out of the market and to end a slew of immoral practices that led to people losing their homes to pay medical bills after their insurance was cut off.
Among other things, the new law bars discrimination such as higher insurance rates for women and people with chronic illnesses. It ends the common practice of insurance companies cutting off coverage when people fall ill and bars limits on the long term cost of providing care.
There are a raft of other measures that kick in before the legislation is fully implemented in 2015.
Conservatives – Republicans and Democrats – generally loathe the healthcare law in its entirety, claiming that it will lead to bureaucrats replacing doctors in making medical decisions and a diminishing of the quality of healthcare. But the reforms are also widely unpopular among many less political Americans who have so far seen few benefits as the changes kick in.
Popular opposition helped galvanise the Tea Party movement. The House of Representatives, now under Republican control, has held a largely symbolic vote to repeal the legislation. Obama’s opponents for president have promised to overturn the law if elected. Political fights have flared over individual elements such as the requirement for health insurance to cover contraception.
Residents of Missouri and Ohio have voted not to implement the legislation in their states, although it is legally doubtful they can refuse. Virginia has passed a law to the same end.
But in the supreme court, the assault on the legislation is narrower, even if the outcome could be to cause the collapse of the entire reforms.
The principal challenge focuses on a legal requirement for almost every American to buy health insurance in order to make it affordable for millions more people by spreading the risk and cost.
Conservatives say that is an infringement on their freedom with “big government” telling them what they must do. Some have argued that if Washington can force people to buy health insurance it can oblige them to join Weight Watchers or eat their vegetables.
“If the government can force us to buy health insurance it can force us to buy cars to prop up Detroit or stocks and bonds to prop up Wall Street,” said Betsy McCaughey, a conservative Democrat and former lieutenant governor of New York.
Randy Barnett, a lawyer for business interests that have brought the action at the supreme court alongside the states’ attorney generals, said the legislation is unconstitutional because for the first time Congress obliges most Americans to buy a product from the private sector with no means of opting out.
“They’re trying to funnel money out of people’s pockets into the pocket of the private insurance companies. It’s a difference between a tax, which is a power the Congress has, and the power to take money from a person and direct it to a private company which is a power they don’t have,” he said. “It’s a constitutional power that if recognised would be a fundamentally dangerous new power that the government would have.”
The Obama administration has countered that regulation of the health industry, which accounts for 18% of the US economy, is essential to control spiralling costs that have contributed to tens of millions of Americans having no medical coverage.
The legal challenges have been dismissed as little but politicking by some judicial conservatives. Charles Fried, solicitor general under President Reagan and now a Harvard law school professor, has described the lawsuits as “grandstanding in a preposterous way”.
“It is simply a political ploy and a pathetic one at that,” he said.
But the politics is not always as straightforward as it may seem.
Obama has embraced the legal challenge as a useful weapon against his likely Republican opponent in the presidential election, Mitt Romney.
Romney introduced similar health insurance reforms as governor of Massachusetts six years ago including a requirement for state residents to buy insurance. At the time, he said he thought the law would make good national legislation.
The legal path to the supreme court
A barrage of legal challenges to the legislation began almost as soon as it was passed. They have produced conflicting court rulings even within the same state.
Virginia’s attorney general won the first ruling in a federal court against the new law in December 2010 when a district judge declared a part of the legislation unconstitutional because it exceeded the powers of the government by punishing individuals with financial penalties for not buying health insurance. The ruling did not discuss the rest of the law.
That decision was overturned a month later when an appeals court ruled that Virginia did not have the authority to challenge the reforms.
But another Virginia court reached a different decision when it declared the law constitutional. Judge Norman Moon rejected the argument that Congress does not have the authority to force people to buy health insurance against their will.
An appeals court in Washington DC also held that the healthcare law is constitutional on the grounds that the federal government has the right to regulate “national solutions to national problems”. Another Washington court rejected a challenge made on religious grounds.
In Michigan, an appeals court last year upheld a lower court ruling that said the entire healthcare law is constitutional.
But the ruling being taken up by the supreme court was handed down in a federal district court in Florida.
In January 2011, Judge Roger Vinson ruled in a legal action by 26 states that the individual mandate is unlawful and therefore the entire health care reform law is unconstitutional. That went further than decisions in other courts which only struck down part of the law but let the rest stand.
Eight months later, an appeals court upheld Vinson’s ruling on the individual mandate but ruled that it could be separated from the rest of the health care law which should be permitted to remain on the books.
The justice department then asked the supreme court to hear the case.
Tax vs fine
The supreme court will hear the case over three days.
The first will consider whether the supreme court should even be considering the case now. That issue hinges on whether the punishment for failing to buy health insurance is a fine or a tax.
Under the new law, anyone not exempt from having health insurance will be charged additional income tax for each month they are without coverage. But some opponents of the legislation say that what is dressed up as tax is really a fine.
If the supreme court agrees, it may decide it cannot rule on other aspects of the law because legal challenges to fines cannot be brought until the penalty has been imposed on someone, and that has yet to happen.
The commerce clause
The core of the case will be heard on day two.
Arguments already submitted in briefs to America’s highest court centre on interpretation of a clause in the constitution that gives Congress the authority to regulate commerce between US states. The precedent was set 70 years ago when the supreme court ruled in the case of an Ohio farmer who challenged the government’s right to control how much wheat he could grow for his own use.
In the 1930s, the government limited wheat production in order to force up prices during the Great Depression. The farmer, Roscoe Filburn, was growing more than permitted, but said that it was to feed his own animals and therefore was not commercial.
Filburn won in a lower court, but the supreme court unanimously ruled against him, on the grounds he was using his wheat to feed livestock that produced eggs and milk sold as a commercial transaction, and that if he had not grown his own crop he would have had to buy grain on the open market.
In other words, his wheat crop was inextricably bound up with the agricultural trade between states even if he was only growing it for his own use.
The government is pressing a similar argument in its defence of the legal requirement for almost all Americans to buy health insurance. It says that millions of people have been prevented from taking out insurance in part because it was unaffordable – particularly for those with poor health.
The healthcare law seeks to make insurance accessible by requiring almost everyone to take out policies so as to spread the cost of treatment.
The government argues that if an individual is without insurance, that does not mean they do not have any impact on healthcare because almost everyone uses hospitals at some time. A refusal to buy insurance simply means others pick up most of the bill – and that is a national issue which Congress has the right to regulate just as it could limit Filburn’s wheat crop.
“In 2009, more than 55% of Americans under age 65 who were uninsured for more than 12 months had at least one visit to a doctor or an emergency room; about 80% of those who were uninsured for less than 12 months did so,” a government brief to the court said. “The average bill for a single hospital stay for an uninsured person was $22,200, and nearly 60% of those hospitalizations generated bills greater than $10,000. Individuals without insurance can rarely cover charges of this magnitude.”
The government said that uninsured people used $116bn of health care services in 2008 but left unpaid 63% of the costs.
“Those costs are shifted to other market participants, raising the average family’s annual health insurance premiums by more than $1000,” the government brief said.
Activity v inactivity
Opponents of the law say there is a fundamental difference between Filburn growing wheat and a modern-day American refusing to buy health insurance. Filburn was being prevented from doing something he wished to do, whereas the health care law forces people to buy insurance against their will. Opponents say that the law is in essence “regulation of inactivity”.
“Congress is claiming a power they’ve never claimed before, which is the power to compel purchases,” said Barnett. “The ability to compel purchases is a very awesome and great and attractive power. The rationale for why they should have that power would essentially give them an unlimited power. What we’re being told is that because the decision not to buy something is an economic decision and that economic decision effects either interstate commerce or the ability of Congress to regulate it, therefore Congress can make people buy things. Well, that rationale is without limits.”
Barnett said that the claim that healthcare is a unique product that eventually everyone makes use of is “irrelevant constitutionally”. He said that had Congress set up a single-payer system through the government similar to the British National Health Service he would not have seen a constitutional issue. But forcing people to give money to a private company is a different matter.
A brief to the supreme court by Barnett and others lawyers representing business interests that are party to the case also argues that Congress is forcing healthy people to act against their own interests by buying insurance that is used to subsidise the unhealthy.
“The mandate’s primary purpose and effect is not to regulate uninsured individuals engaging in harmful economic activity, but to compel the uninsured into engaging in economic activity that is harmful for them but beneficial to third parties. Never before has Congress enacted such a regulatory mandate,” it said. “The mandate imposes an extraordinary and unprecedented duty on Americans to enter into costly private contracts. By commanding citizens to subsidize voluntary participants in the insurance industry through disadvantageous contracts, it exemplifies the threat to individual liberty that occurs when Congress exceeds its limited and enumerated powers.”
The Missouri attorney general, Chris Koster, argues in a supreme court brief that if the law stands the government will be able to force Americans to go on a diet.
“If Congress can force activity under the Commerce Clause, then it could force individuals to receive vaccinations or annual check-ups, undergo mammogram or prostate exams, or maintain a specific body mass,” he said.
Whether to scrap the whole law or part of it
The third day of hearings will be mostly taken up with arguments over what should happen if the court decides that the healthcare law breaches the commerce clause of the constitution. The justices may then have to decide whether that means the entire reform law should be scrapped.
The government and its opponents agree that the individual mandate is a key component without which the law cannot work. So the court has hired a lawyer to make the alternative argument that the rest of the legislation can remain in place even if the requirement for compulsory insurance is struck down.
Barnett says he does not believe that argument can prevail.
“The government itself concedes that the individual mandate cannot be disconnected from the regulations that are being imposed on the insurance companies,” he said. “You pull the heart out of a body and the body dies. The bill is remarkably interconnected and I don’t think the act could survive as Congress intended it to if you take those parts of it away.”
The legal battle on the court floor will be led by senior law officers of this and previous administrations.
The government will be represented by the US solicitor general, Donald Verrilli, who has a long history with the supreme court, having served as a law clerk to the late justice William Brennan. Later, he argued a dozen cases before America’s highest court. Before his appointment as solicitor general, Verrilli worked as associate deputy attorney general at the justice department dealing with security policy and then deputy White House counsel. His briefs in that post included healthcare, financial regulation and the BP oil spill in the Gulf of Mexico.
Verrilli will be facing down Paul Clement, solicitor general under George W Bush, who will be arguing for the 26 states challenging the healthcare law.
Clement, who has been touted as a potential supreme court nominee in a future Republican administration, was a classmate of Obama’s at Harvard law school. He served as a clerk to justice Antonin Scalia, who is still sitting on the bench.
Clement has argued several prominent cases dear to conservative activists before the supreme court, including a defence of Arizona’s controversial immigration laws. He quit a private law firm last year after it dropped its defence of a law forbidding the federal government from recognising same sex marriages.
Private business interests that are part of the action against the healthcare reforms will be represented by Michael Carvin, who argued for George Bush at the Florida supreme court in his battle against Al Gore over whether there should be a recount of votes cast in the state in the 2000 presidential election. Carvin worked in several justice department posts in the Reagan administration.
The supreme court has appointed its own lawyers, Robert Long and Bartlow Farr, to offer alternative opinions to the shared views of the government and its opponents that the case should be heard immediately, rather than when someone is penalised for not taking out health insurance, and that if the individual mandate is ruled illegal, the whole of the health care law will collapse.
Conventional legal opinion is that it will not come to that.
There are nine supreme court justices, although some conservatives would like to see it down to eight. They argue that Elena Kagan should recuse herself because she was Obama’s solicitor general when the administration began planning its legal defence of the healthcare law. That looks unlikely to happen.
Court watchers expect Kagan and three other generally more liberal judges – Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor – to uphold the law. The conservative Clarence Thomas is assumed to be likely to vote against it. Of the swing votes, Anthony Kennedy is thought the most likely to side with the administration. All eyes will be on the chief justice, John Roberts, in particular.
“Justice Thomas will almost certainly vote to strike it down, because he’s voted to strike down a lot of laws as being beyond the scope of Congress’s power,” said Dorf. “That leaves four others of whom the betting would be Kennedy is the most likely to join the liberals but I could see any or even all of Roberts, [Antonin] Scalia and [Samuel] Alito joining the liberals. It just depends on how they perceive this case.”
Although much is made in the US of the separation of powers, the appointment of supreme court justices is highly politicised and reflected in some of their judgments, from the Bush v Gore ruling that decided the 2000 election to the highly controversial decision that unleashed virtually unlimited amounts of money in to political advertising ahead of this year’s presidential election.
Dorf says the justices will not be unaware of the political sensitivities, particularly with a major rally led by members of Congress planned outside the court on Tuesday.
“Historically, there’s always been criticism of that the court is politically biased,” said Dorf. “Usually it’s by people who disagree with the outcomes and that’s depending on the political whims, that can be almost anybody. That could cut either way. It could lead to the justices wanting to trim their sails, it could lead to particular justices wanting to dig in their heels.”
The public is not confident.
A Bloomberg poll this month found that 75% of voters believe that politics will influence the supreme court ruling. Just 17% thought the case would be decided on the legal merits.