Michael Carvin misrepresented the mandate in oral argument

Arguing before the Supreme Court on March 27 that the individual mandate in the Affordable Care Act forces people to buy more health insurance coverage than they need -- an argument that Alito, Roberts and Scalia also voiced -- plaintiff's counsel Michael Carvin asserted,  "Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance"  (p. 105).

I've noted that someone should have stressed to the justices that the ACA does allow those under 30 to purchase purely catastrophic coverage. The AP has weighed in with a story citing insurance experts who assert that the "bronze" plans offered in the insurance exchanges are skimpy enough to reasonably be dubbed catastrophic coverage. Randy Barnett, a prime mover of the case against the ACA, rebutted that claim today, as did Carvin himself in the AP story.

In a way it's a perverse argument. Why should defenders of the law have to argue that the ACA allows people to buy coverage crummy enough not to be construed as an undue infringement on personal liberty? Be that as it may, I want to return to one point noted in passing in my original post.

While the assertion that the ACA offers "catastrophic" coverage to those who want the bare minimum depends on your definition of 'catastrophic,'Carvin's assertion that "Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance" is simply not true.

The point is technical but telling. Carvin was exaggerating the extent to which the law requires Americans to buy more coverage than they might conceivably individually need, or think they need. 

The ACA Section 1302 (e), defines eligibility to purchase catastrophic coverage this way:

INDIVIDUALS ELIGIBLE FOR ENROLLMENT.—An individual
is described in this paragraph for any plan year if the individual—
(A) has not attained the age of 30 before the beginning
of the plan year; or
(B) has a certification in effect for any plan year under
this title that the individual is exempt from the requirement
under section 5000A of the Internal Revenue Code
of 1986 by reason of—
(i) section 5000A(e)(1) of such Code (relating to
individuals without affordable coverage); or
(ii) section 5000A(e)(5) of such Code (relating to
individuals with hardships).*

Those exempt from the mandate, and therefore eligible to buy catastrophic coverage, include:

(e) Exemptions- No penalty shall be imposed under subsection (a) with respect to-- `(1) INDIVIDUALS WHO CANNOT AFFORD COVERAGE-

`(A) IN GENERAL- Any applicable individual for any month if the applicable individual's required contribution (determined on an annual basis) for coverage for the month exceeds 8 percent of such individual's household income for the taxable year described in section 1412(b)(1)(B) of the Patient Protection and Affordable Care Act. For purposes of applying this subparagraph, the taxpayer's household income shall be increased by any exclusion from gross income for any portion of the required contribution made through a salary reduction arrangement....

and

(5) HARDSHIPS- Any applicable individual who for any month is determined by the Secretary of Health and Human Services under section 1311(d)(4)(H) to have suffered a hardship with respect to the capability to obtain coverage under a qualified health plan.

The goals of the ACA are to (1) shield all Americans from risk of financial ruin stemming from illness, and (2) to ensure all Americans access to health care likeliest to enable them to maintain their health at an affordable price. The plaintiffs acknowledged that Congress could seek to meet those goals by other means, e.g., a single payer system that everyone would pay for through taxes.  With that goal accepted, it seems to me that the reasonable burden on Congress was to minimize the impingement on freedom imposed by the mandate -- that is, the minimum needed for Congress to exercise its right, in Verrilli's awkward phrase, to include regulation, including a regulation of this kind, if it is necessary to counteract risks attributable to the scheme itself that people engage in economic activity that would undercut the scheme.

To limit the mandate to the minimum needed to make the scheme work -- that is, to impose community rating and guaranteed issue on the insurers -- the law's framers went to considerable length to avoid imposing an undue financial burden via the mandate, e.g., by (1) expanding Medicaid access, (2) making catastrophic coverage available to young adults and those for whom the mandate constitutes hardship, and (3) including a "skinny" -- some would say catastrophic -- option within the exchanges.  The results, as Kaiser Notes on Health Insurance and Reform highlighted shortly before the oral arguments (on 3/21) leave a quite limited group of people obligated to buy full coverage (usually subsidized) on the individual market:

The mandate’s exemptions cover a variety of people, including: members of certain religious groups and Native American tribes; undocumented immigrants (who are not eligible for health insurance subsidies under the law); incarcerated individuals; people whose incomes are so low they don’t have to file taxes (currently $9,500 for individuals and $19,000 for married couples); and people for whom health insurance is considered unaffordable (where insurance premiums after employer contributions and federal subsidies exceed 8% of family income).

In simulations prepared for Kaiser, Jonathan Gruber of the Massachusetts Institute of Technology estimates that about 40% of those who would be uninsured in the absence of the ACA would be exempt from the mandate. That means almost 9 in 10 non-elderly people would either satisfy the mandate automatically or be exempt from it. In Massachusetts – a state where an individual mandate was implemented in 2007 and has largely been effective with less controversy than greeted the ACA – about 1% of taxpayers paid a penalty in 2009, and 70% of people uninsured for any part of the year were exempt from it.

Kaiser goes on to illustrate that a typical family of four, with middle aged adults, would be exempt from the mandate if the family income was either below $25k or between about $61k and $150k. Those with incomes between $25k and $61k would have their purchases subsidized, as would those between $61k and about $80k. [update: Kaiser has weighed in more recently to argue explicitly that the bronze plans offered in the exchanges constitute a carastrophic coverage option.  See Kaiser weighs in: the ACA offers catastrophic coverage to all comers.]

So yes, the mandate does impose a...mandate on some.  But the skeptical justices asked, not for no imposition, but for a "limiting principle."  Seems to me that Congress legislated on a self-limiting principle, paring the mandate to the minimum necessary to provide near-universal coverage. And if Justice Kennedy or another on-the-fence justice wants to go further, the notion of a mandate pared to the minimum could provide a path, as Marty Lederman (and I) have suggested, to upholding the mandate while further limiting it, e.g., by instructing Congress to make the purely catastrophic coverage option available to all.

More on the mandate and catastrophic coverage (updated 5/9)
Attention SG Verrilli and Justices Kennedy, Roberts: A plea for one more pleading (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) 

and also:
Attention, Justices Kennedy, Roberts et al: read the young people's brief (5/5)