Five key questions for the Supreme Court to consider in a healthcare decision

by Sam Baker - 03/31/12 12:00 PM ET

A handful of specific questions from last week’s oral arguments could help shape the Supreme Court’s landmark ruling on President Obama’s healthcare law.

{mosads}The over-arching question before the court is whether the law’s individual mandate is constitutional. But that’s a complicated question, and the two sides of the case don’t even agree about how best to ask it.

A decision is expected to come in June — just months before the presidential election.

The biggest takeaway from last week’s arguments was that the mandate is very much in jeopardy. That doesn’t mean, however, that the court is sure to strike it down, and the oral arguments helped illuminate several areas the justices will likely consider in their private deliberations.

Here are five questions that could shape the court’s ruling:

Is this about healthcare or health insurance?

The 26 states that filed the healthcare suit say the mandate forces people into the market for insurance. The Justice Department says it’s really about the market for healthcare — which everyone is already part of.

“I mean, health insurance exists only for the purpose of financing healthcare,” Justice Elena Kagan said. “The two are inextricably interlinked. We don’t get insurance so that we can stare at our insurance certificate. We get it so that we can go and access healthcare.”

{mosads}The distinction between healthcare and health insurance goes to the heart of the legal challenge. But where earlier arguments focused on the legal differences between economic activity and inactivity, the Supreme Court put the debate in its real-world context.

“It was teased out more,” said Ilya Shapiro, a legal expert at the libertarian Cato Institute. “That has been in the briefing, but it wasn’t emphasized. … It did come out more clearly in the oral arguments.”

The more practical distinction was also clearly an issue for Justice Anthony Kennedy, the court’s traditional swing vote. Kennedy initially seemed to be siding with his conservative colleagues, asking Solicitor General Donald Verrilli Jr., “Can you create commerce in order to regulate it?”

But as Tuesday’s debate went on, Kennedy seemed to at least be considering whether insurance can truly be separated from healthcare. The uninsured “are in the market in the sense that they are creating a risk that the market must account for,” he said during an exchange with former Solicitor General Paul Clement, who represented the challenging states.

Five questions that could shape the court’s ruling:

Where do the mandates stop?

Probably the biggest weakness in the government’s case is its failure to define a “limiting principle.” If the Commerce Clause allows Congress to mandate the purchase of health insurance, judges wanted to know, what can’t it mandate?

The issue has dogged the government at every level, even in cases it ultimately won, and was — predictably — on the justices’ minds. Multiple justices asked Verrilli multiple times, point blank, to name a limiting principle. He did not clearly articulate one.

{mosads}“That was the strangest part” of Tuesday’s arguments, Shapiro said.

In the past, the Justice Department has argued that it doesn’t need to define a limiting principle because healthcare is unique. Upholding the insurance mandate wouldn’t open the door to other mandates because other markets don’t have the same kind of cost-shifting as healthcare, the government argues.

Kennedy seemed to be entertaining that argument, which is closely tied to the difference — or lack thereof — between healthcare and insurance.

“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,” he said. “That’s my concern in the case.”

Five questions that could shape the court’s ruling:

What constitutes an “activist” approach?

If the court finds the mandate unconstitutional, it will then have to decide whether to strike down the entire healthcare law. Some legal experts see that part of the decision as a way to mitigate the inevitable cries of an “activist” ruling. But the justices disagreed over which approach would expand the court’s power and which would constrain it.

{mosads}“It’s a choice between a wrecking operation, which is what you are requesting, or a salvage job,” Justice Ruth Bader Ginsburg said to Clement. “And the more conservative approach would be salvage rather than throwing out everything.”

Kennedy, siding with the court’s conservatives, took the opposite view.

“We would be exercising the judicial power if one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended,” Kennedy said.

Five questions that could shape the court’s ruling:

What happened to the Necessary and Proper Clause?

The Constitution gives the federal government certain powers, and it also says Congress can pass laws that are “necessary and proper” to exercise those powers. That clause has become an increasingly big part of the Justice Department’s defense.

{mosads}The Justice Department said in its written briefs that the point of the healthcare law is to impose new regulations on insurance companies and expand access to affordable coverage — and that the mandate is a way to make those regulations work. Verrilli barely mentioned that part of his case during the oral arguments.

“I didn’t think that got nearly enough attention,” said Tim Jost, a Washington & Lee University law professor who supports the mandate. “They didn’t make that argument nearly as strongly as they could have.”

Five questions that could shape the court’s ruling:

Why does the mandate exist?

While framing the mandate as a way to regulate the healthcare market, the government says the purpose of the mandate is to crack down on “free riders” — uninsured people who go to the hospital and can’t pay their bills, passing the cost of their care on to taxpayers and people with insurance.

{mosads}But if that’s the idea, Chief Justice John Roberts asked, shouldn’t people be able to satisfy the mandate with a policy that only covers catastrophic care? The healthcare law requires much more robust benefits, including services like maternity care, which many people will never need.

The mandate’s other purpose is to bring young, healthy people into the system, offsetting the cost of requiring insurance companies to cover sick people. But in that context, it’s linked more directly to the insurance market.

“This statute undeniably operates in the health insurance market,” Clement said. “And the government can’t say that everybody is in that market. The whole problem is that everybody is not in that market, and they want to make everybody get into that market.”

Five questions that could shape the court’s ruling: