Today marks the second day of scheduled arguments at the Supreme Court over the Affordable Care Act (PPACA). Yesterday’s hearing centered around that mountain of fun known as the Anti-Injuction Act. Which, in retrospect, was actually a pretty interesting discussion about the mandate’s relationship to what is traditionally considered a tax (at one point, they even bring up that “tax” isn’t clearly defined anywhere). Nevertheless, today is when the powder-keg of the last two years gets lit – the constitutionality of the Individual Mandate.
The individual mandate
What it is: The most-contested part of the health reform law, the Affordable Care Act’s individual mandate requires nearly all Americans to carry health insurance. The legal question centers on whether such a regulation is permissible under the Commerce Clause, which allows the federal government to regulate interstate activity.
What they’ll argue: Health reform opponents contend that the decision not to do something — namely, not buy health insurance — is economic inactivity, rather than activity, and therefore not a behavior the federal government can regulate. Health reform supporters argue that the decision to not purchase health insurance has an economic effect. An individual without coverage, for example, may not have the money to pay for an emergency room visit, sticking hospitals or taxpayers with the bill.
When it happens: Tuesday, March 27, 10 a.m. – 12 p.m.
Why it matters: With no penalty for not purchasing health insurance, but a requirement for insurers to accept anyone still standing, many expect the costs of insurance would skyrocket. Congress could, theoretically, replace the individual mandate with another policy that doesn’t run afoul of the activity-inactivity distinction but it is unlikely that congressional Republicans would permit such a fix, at least in the near term.
As it was yesterday, by the time this post goes up the arguments will be finished. I noticed a lot of links for audio fairly quickly, but again CSPAN will have it on their front webpage.
A lot has been written over yesterday’s hearing; read Jonathan Cohn (and his useful link roundup to other analysis), Sarah Kliff, Dahlia Lithwick, etc. What I’m looking for today actually relates to an exchange hear yesterday. Specifically, can the federal government claim the Individual Mandate is constitutional via the taxing power even if they simultaneously claim that the mandate is not a tax? From the transcript (edited for clarity from the original format):
JUSTICE ALITO: General Verrilli, today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax. Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?GENERAL VERRILLI: No, Justice Alito, but the Court has held in a license tax cases that something can be a constitutional exercise of the taxing power whether or not it is called a tax. And that’s because the nature of the inquiry that we will conduct tomorrow is different from the nature of the inquiry that we will conduct today. Tomorrow the question is whether Congress has the authority under the taxing power to enact it and the form of words doesn’t have a dispositive effect on that analysis. Today we are construing statutory text where the precise choice of words does have a dispositive effect on the analysis.>
Solicitor General Verrilli is arguing that yes, for the purposes of constitutionality the mandate can fall under the power of Congress to tax even if the Individual Mandate itself is not strictly a tax. I happen to agree. For the same reason that a tax credit is not itself a “tax” it still falls under Congresses’ power to lay and collect taxes, so should a tax penalty fall under those same powers. So unless we’re questioning the constitutionality of tax credits, deductions, expenditures, or anything else done through the tax system that isn’t strictly a tax, then we’re largely having a fruitless discussion.
So what will the law’s opponents be arguing today? Essentially they’ll be performing the legalese version of the mundane rhetorical attack against the mandate – ignore the tax penalty, and only pretend that Congress is forcing everyone to have health insurance coverage without the “or else” part. The biggest obstacle to such an argument may well come from the Chief Justice himself:
CHIEF JUSTICE ROBERTS: Well prevent of the collection of taxes. But the idea that the mandate is something separate from whether you want to call it a penalty or tax just doesn’t seem to make much sense.
MR. KATSAS: It’s entirely separate, and let me explain to you why.
CHIEF JUSTICE ROBERTS: It’s a command. A mandate is a command. If there is nothing behind the command. It’s sort of well what happens if you don’t file the mandate? And the answer is nothing. It seems very artificial to separate the punishment from the crime.
This, I think, is the heart of the matter. If the laws opponents are not able to effectively argue that the tax penalty is not a part of the mandate when considering it’s constitutionality, then on its own merits I don’t see how they win. I personally believe that trying to separate the penalty from the idea of the mandate is mentally dissonant gymnastics of the highest order. Without the omission of how the mandate functions, the reality of it’s relative coerciveness is apparent. Which is to say it is no more coercive as any other tax related credit, deduction, or penalty and far less coercive than how Medicare or Medicaid functions.