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Magazine / OPENING ARGUMENT

Health Law Not A Sure Bet In Court

... But A Decision In Its Favor Is Still The Best Bet.

March 26, 2010

Editor's Note: This is an updated version of Stuart Taylor's Dec. 12 Opening Argument column.

What chances of success await the lawsuits challenging the constitutionality of the new health insurance reform law filed by 14 state attorneys general this week, with more lawsuits by states, individuals, and companies in the pipeline?

Not much, according to most of the academic experts who have weighed in. They confidently predict that the Supreme Court will (if the case gets that far) uphold the new law's major provisions. These include the much-debated mandate for individuals to buy comprehensive health insurance unless they're already covered by employer-based plans, and also the requirement that states spend billions of dollars expanding their Medicaid programs (unless they withdraw) and administering the complex new law.

 

These experts cite the justices' very broad reading since the New Deal of Congress' powers to regulate interstate commerce and to tax and spend.

The need to govern an ever more interconnected nation has spawned a long line of precedents expanding the commerce power.

I, too, would bet on the major provisions of the 2,400-page law being upheld. But "these challenges are not frivolous," as the Washington Post said in an editorial, and "the case is not as clear-cut as many legal scholars have argued."

The fact is that the costly federal mandates that the law imposes on state governments, individuals and families are without close precedents. And the lopsided academic response is attributable partly, though not entirely, to the lopsidedly liberal policy preferences of the professoriate.

Indeed, most scholars and other analysts have virtually ignored the new law's most vulnerable (in my opinion) major provision, which the plaintiff states say violates their sovereignty.

That is the law's requirement that cash-strapped state governments spend billions of their own tax dollars both to vastly expand their Medicaid eligibility standards and to help administer the new law, especially the health care insurance exchanges required by the law.

The states' only alternative to spending billions more on the state-federal Medicaid program would be to drop out of it entirely, leaving millions of current Medicaid recipients without coverage -- a drastic step that the justices might or might not consider an adequate option. Also relevant is the fact that the states, unlike the federal government, are required by their own constitutions to balance their budgets every fiscal year.

To be sure, the Supreme Court has upheld many federal encroachments on state sovereignty. But it has also set some outer limits, which the new law arguably exceeds. The big precedent on this issue is the 1992 decision in New York v. United States, in which the justices ruled that the federal government "may not conscript state governments as its agents" or "simply commandeer [their] legislative processes."

Justice Sandra Day O'Connor's opinion for a 6-3 majority held unconstitutional a central portion of a federal law essentially requiring states to take legal ownership of and responsibility for the low-level radioactive waste generated within their borders. "In this provision, Congress has crossed the line distinguishing encouragement from coercion," O'Connor wrote.

She added that state governments "are neither regional offices nor administrative agencies of the federal government." More broadly, she explained that "where the federal government directs the states to regulate, it may be state officials who will bear the brunt of public disapproval, while the federal officials who devised the regulatory program may remain insulated from the electoral ramifications of their decision."

O'Connor based her opinion mainly on the 10th Amendment, which provides that powers not expressly given to the federal government by the Constitution are "reserved to the states" or to "the people."

The second most vulnerable -- and most discussed by scholars -- major provision is the new law's mandate that people not covered by employer-based insurance plans either spend thousands of dollars to buy health insurance meeting the law's costly specifications or pay a penalty that will, by 2016, reach $750 per year for an individual and up to $2,200 for a family, or 2 percent of household income, whichever is greater.

Never in the history of the nation, say experts including David Rivkin and Lee Casey, lead outside counsel for 13 (and counting) of the states challenging the new law, has Congress required people to buy a product or service simply because they exist and live in the United States. Nor has the Supreme Court held that Congress can penalize inactivity in the name of regulating interstate commerce.

It seems a stretch to see these provisions as within Congress' power to "regulate commerce... among the several states." And legalities aside, the mandate to buy health insurance offends the libertarian streak that runs far broader and deeper in this country than in most others.

Although the Constitution also grants Congress power "to make all laws which shall be necessary and proper" to regulate interstate commerce, and some precedents provide indirect support for a health insurance mandate, no precedent squarely supports it.

With perhaps a touch of hyperbole, Rivkin told me that the states' lawsuit is "the most important constitutional challenge of our generation, and one of the two or three most important in our history."

So why am I betting that the justices would uphold the new law?

The answers shed light on how far constitutional jurisprudence has devolved -- inevitably, in my view -- into a mix of policy preferences, political prudence and legal precedents that long ago departed from the actual words and original meaning of the Constitution.

It's true that the proposed mandate to buy health insurance, like much else that Congress has done since the New Deal, would extend federal powers far beyond anything envisioned by the Framers. The commerce clause, in particular, was not intended to allow Congress to regulate activities that were neither interstate nor commercial.

But the need to govern an ever more interconnected nation, in which once-local activities such as health care have become critical components of the national economy, has spawned a long line of precedents expanding the commerce power, especially since the justices began upholding New Deal programs in 1937.

On this and other issues, the Court must often choose whether to be faithful to a literal interpretation of the Constitution's original meaning or to the hundreds of precedents that -- sometimes for good policy reasons, sometimes not -- have stretched or departed from it.

The strongest precedents for supporters of the mandate are Gonzales v. Raich, a 6-3 decision in 2005 that Congress can make it a federal crime for Californians to grow marijuana at home for their own personal, medical use -- even though this is legal as a matter of California law -- and Wickard v. Filburn, a 1942 ruling that Congress could limit the amount of wheat that farmers grew to feed their own livestock.

Marijuana and wheat grown and consumed at home don't sound much like interstate commerce. But Raich held that it is "necessary and proper" for Congress to regulate local behavior when doing so is "an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated."

Inactivity -- failing to buy health insurance -- is even further removed from interstate commerce than the medical marijuana in Raich. But uninsured people affect commerce, and in many cases impose costs on society, when they seek free care from emergency rooms or spread communicable diseases. The proposed mandate can also be defended as "necessary and proper" to finance the subsidies that are the core of the new law.

Yale Law School's Jack Balkin and others assert that Congress' authority to tax and spend for the general welfare -- on which the somewhat analogous Social Security and Medicare taxes are based -- is even more sweeping than the commerce power, and more than sufficient to support the penalty tax for failing to buy health insurance.

Rivkin and Casey have countered that the justices have never held congressional impositions on people who engage in no relevant activity at all to be necessary and proper to regulation of interstate commerce. Such a holding would cross an important line, and would make America less free, they have stressed. The logic used by defenders of the mandate to buy health insurance could also support a mandate to buy health club memberships, cars (to stimulate the economy), or anything else, they add.

The most critical point, Rivkin and Casey have asserted, is that the commerce power must be limited by some coherent principle, under the logic of the 5-4 decisions in 1995 and 2000 striking down a federal law against possessing a gun near a school and a provision of the Violence Against Women Act. And, they claim, no such principle could survive a decision upholding the health insurance mandate.

The analogy drawn by some of the new law's supporters to state laws requiring car owners to buy car insurance does not survive scrutiny. You can avoid that requirement simply by not buying a car. And states have broad powers to regulate purely intrastate activities that the framers of the Constitution put off-limits to the federal government.

I don't see a clear winner in the dueling arguments about commerce-clause and taxing-power precedents. I also think that it would have been far better for Congress simply to increase taxes to finance the subsidies needed by people with pre-existing conditions and modest incomes, which -- while politically toxic -- would raise no constitutional problem.

Still, the bottom line is that I think that a perhaps narrow majority of the justices would defer to the political branches here. The alternative would be to strike down the president's signature initiative -- something that no Court has done in more than 70 years, for good reason.

But what if the new law continues to remain unpopular with voters, or even become more unpopular? What if they sweep congressional Democrats out of power in November, or even sweep Barack Obama out of the presidency in 2012? What if majorities of the new House and Senate sign friend-of-the-court briefs asking the justices to strike down the mandate, which was passed without a single Republican vote? And what if -- politics and law aside -- the whole business comes to look like a mess that can be salvaged only by a Supreme Court decision clearing the decks for Congress to rethink health care reform from the ground up?

Such are the dreams of those who imagine the justices striking down the proposed health care mandate. I hope that they don't all come true. But if they do, five justices might go with the flow.

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