Noah Feldman notes that Kennedy asked Verrilli for a "limiting principle" on the government's right to impinge on individuals' liberty and laments that Verrilli failed to tell him that health insurance is a unique market in that can't work unless everyone's in it -- though, as I argued previously, Verrilli did kind of make that point, in pieces. Now here cometh Jeffrey Rosen, mourning one more un-fired silver bullet:
The limiting principle goes something like this: In previous cases denying Congress the power to regulate local activities such as guns in schools or violence against women, the Court has drawn a distinction between activity that is truly local and activity that is truly national, in the sense that the states aren’t able effectively to regulate the activity on their own. When it comes to violence against women or guns in schools, states arguably have the will and the resources to respond to these problems.This may be a good legal argument. I don' think, however, that it would have swayed Kennedy, because Kennedy seems to be primarily concerned about infringement on the freedom of the individual, not the state. In the exchange below, Roberts raises the issue of infringement on states' rights, and as Verrilli tries to answer, Kennedy turns the conversation to infringement on the rights of individuals:
But when it comes to providing insurance guarantees for the uninsured, any state would be worse off if it tried to solve the problem on its own, because it would end up attracting uninsured people from other states seeking to take advantage of its benefits. Because states know this in advance, most don’t even try to solve the fundamental problems of health care coverage.
CHIEF JUSTICE ROBERTS: The key in Lochner is that we were talking about regulation of the States, right, and the States are not limited to enumerated powers. The Federal Government is. And it seems to me it's an entirely different question when you ask yourself whether or not there are going to be limits on the Federal power, as opposed to limits on the States, which was the issue in Lochner.Verrilli's response to this concern was effective as far as it went, I think. But then Roberts turned the interrogation in a direction that worries me more, raising an issue that I don't think was ever fully answered: why could the adverse selection problem not be addressed adequately by requiring everyone to carry catastrophic coverage only? Continuing from Verrilli's response to Kennedy's question above:
GENERAL VERRILLI: I agree, except, Mr. Chief Justice, that what the Court has said, as I read the Court's cases, is that the way in which you ensure that the Federal Government stays in its sphere and the sphere reserved for the States is protected is by policing the boundary. . Is the national government regulating economic activity with a substantial effect on interstate commerce?
JUSTICE KENNEDY: But the reason, the reason this is concerning is because it requires the individual to do an affirmative act. In the law of torts, our tradition, our law has been that you don't have the duty to rescue someone if that person is in danger. The blind man is walking in front of a car and you do not have a duty to stop him, absent some relation between you. And there is some severe moral criticisms of that rule, but that's generally the rule.
And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the Federal Government to the individual in a very fundamental way (transcript, p. 31).
GENERAL VERRILLI: I don't think so, Justice Kennedy, because it is predicated on the participation of these individuals in the market for health care services. Now, it happens to be that this is a market in which, aside from the groups that the statute excludes, virtually everybody participates. But it is a regulation of their participation in that market.The conversation continues in this vein. Verrilli is quite right to assert that it's within Congress's prerogative to determine the appropriate scope of coverage. But neither Verrilli nor the liberal judges, when this question came up again in the questioning of the plaintiffs' lawyers, ever fully addressed the implicit argument that if individuals do have to be required to purchase coverage, in order to spread the cost of the most expensive care, then catastrophic coverage should suffice for that purpose.
CHIEF JUSTICE ROBERTS: Well, but it's critical how you define the market. If I understand the law, the policies that you're requiring people to purchase involve -- must contain provision for maternity and newborn care, pediatric services, and substance use treatment. It seems to me that you cannot say that everybody is going to need substance use treatment -substance use treatment or pediatric services, and yet that is part of what you require them to purchase.
GENERAL VERRILLI: Well, it's part of what the statute requires the insurers to offer. And I think the reason is because it's trying to define minimum essential coverage because the problem--
CHIEF JUSTICE ROBERTS: But your theory is that there is a market in which everyone participates because everybody might need a certain range of health care services, and yet you're requiring people who are not -- never going to need pediatric or maternity services to participate in that market.
GENERAL VERRILLI: The -- with respect to what insurance has to cover, Your Honor, I think Congress is entitled the latitude of making the judgments of what the appropriate scope of coverage is. And the problem here in this market is that for -- you may think you're perfectly healthy and you may think that you're not -- that you're being forced to subsidize somebody else, but this is not a market in which you can say that there is a immutable class of healthy people who are being forced to subsidize the unhealthy. This is a market in which you may be healthy one day and you may be a very unhealthy participant in that market the next day, and that is a fundamental difference, and you're not going to know in which
CHIEF JUSTICE ROBERTS: I think you're posing the question I was posing, which is that doesn't apply to a lot of what you're requiring people to purchase. Pediatric services, maternity services. You cannot say that everybody is going to participate in the substance use treatment market and yet you require people to purchase insurance coverage for that.
GENERAL VERRILLI: Congress has got --Congress is enacting economic regulation here. It has latitude to define essential -- the attributes of essential coverage. That doesn't -- that doesn't seem to me to implicate the question of whether Congress is engaging in economic regulation and solving an economic problem here, and that is what Congress is doing.
Could the Supreme Court parse its ruling to the extent of decreeing that insofar as a mandate is necessary to the regulatory scheme, it should not extend beyond a requirement for catastrophic coverage? UPDATE: poking around for info about the minimum coverage requirements in the exchanges, I have discovered that in addition to the three levels of standard plans, there are options for catastrophic coverage only, for people under thirty. Here is Timothy Jost's overview:
The ACA distinguishes among four levels of coverage based on “actuarial value”
(the average percent of medical costs covered by a health plan), with an additional
catastrophic policy (Exhibit 2).62 The bronze-level plan has to provide benefits equivalent
to 60 percent of the actuarial value, with the silver level at 70 percent, the gold level at 80
percent, and the platinum level at 90 percent.63 Catastrophic policies are available only
for persons under age 30 or those who cannot otherwise find affordable coverage or
would suffer a hardship in buying other coverage.64
Whoa. Could one of the justices' core objections be based on a misunderstanding? Stay tuned -- it's back to the transcript and the law with me!
Update 5/2: re catastrophic coverage in the ACA: I have had much more to say about this, and so have others. Links below.
CC Justices Kennedy, Roberts: A healthcare attorney details catastrophic coverage in ACA (4/29)
Kaiser weighs in: the ACA offers catastrophic coverage to all comers (4/27)
Patient cost-sharing under the Affordable Care Act (Kaiser Family Foundation. 4/27)
Another limiting principle for mandate: states can opt out (4/23)
Jonathan Cohn tells the justices: the ACA has catastrophic coverage options (4/20)
Will the justices make a catastrophic error? (Jonathan Cohn, 4/19)
Michael Carvin misrepresented the mandate in oral argument (4/12)
The ACA offers catastrophic coverage: the AP notices (4/10)
Supreme Court misunderstanding on health overhaul? (AP's Ricardo Alonso-Salvidar, 4/10)
Marty Lederman concurs: the individual mandate could be trimmed, not killed (4/5)
The bounded, minimalist way to uphold the ACA (Marty Lederman at Balkinization, 4/2)
Go tell the justices: the ACA has a catastrophic coverage option (3/31, updated 4/2)
Was Verrilli just the wrong man for the job? Part I (Ragbatz Tumblr, courtesy of Anon below, 3/28)