Misrepresentation of the ACA in the Supreme Court: a postscript

In April and May,  during the countdown to the Supreme Court decision on the constitutionality of the Affordable Care Act, I did everything I could to highlight the material misrepresentation of the individual mandate in oral argument by Michael Carvin, counsel to the law's opponents.  To serve his argument that the ACA forces young and healthy individuals to buy insurance far in excess of their needs, Carvin  asserted, "Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance" (p. 105). That was wrong on two counts: 1) the ACA allows not only adults under 30, but older adults who can show financial hardship, to buy bare-bones catastrophic coverage offered outside the ACA's insurance exchanges; and 2) the cheapest plans on offer in the exchanges provide coverage of an actuarial value low enough to be considered "catastrophic coverage" by most experts, including the Kaiser Family Foundation.


Via Don Taylor, I learned just last week that the plaintiffs' broader claim that the ACA forced people to buy insurance in excess of their needs was misleading on yet another count. The ACA contains a little-known option for states that want to provide affordable to those ineligible for Medicaid yet poor enough that the cheapest option within the insurance exchanges may prove a financial hardship. States may opt to establish a federally-funded Basic Health Plan (BHP). A March 2011 McKinsey report summarizes:

The only adult in the (Heritage Foundation) room

Perhaps Donald Verrilli did not have the smoothest delivery in the Court on March 27, when he defended the constitutionality of the individual mandate.  But in this Heritage Foundation panel discussion, as reported by Josh Gerstein, he seems on a different moral plane entirely from plaintiff's attorney Michael Carvin and libertarian U. of Chicago Professor Richard Epstein:

The bogus economic basis of the case against the individual mandate

As I have noted before, the plaintiff's argument against the constitutionality of the individual mandate in the Affordable Care Act centered largely on a morality tale spun by the plaintiffs, in which the main characters were hoards of healthy young adults being forced to buy more coverage than they need in order to subsidize the coverage of older adults. The ACA is structured "to compel the uninsured into engaging in economic activity that is harmful for them" (Michael Carvin brief on the individual mandate, p. 1). "They're making young, healthy people subsidize insurance premiums for the cost that the nondiscrimination provisions have put on insurance premiums and insurance companies" (Carvin, oral argument, p. 100). In the 3/27 pleadings, Justices Alito, Roberts and Scalia appeared to buy this argument, voicing various aspects of it.

I have also pointed out that the Michael Carvin misrepresented the mandate in oral argument when he stated. "Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance" (p. 105). In fact, the ACA provides the catastrophic coverage option for others exempt from the mandate, e.g. on grounds of financial hardship. In the 3/27oral session, no one pointed noted explicitly that the ACA provides a catastrophic coverage option for those under 30, let alone that it extends that option to others exempt from the mandate on financial or other grounds -- or that the bronze plans offered in the exchanges, as the Kaiser Family Foundation recently detailed, might also reasonably be labeled "catastrophic" coverage.

Now, two economists from the University of Michigan, Jill Horwitz and Helen Levy, writing on the Health Affairs blog, demonstrate on several fronts that  bogus economic premises underpin the plaintiff's argument that the mandate exploits the healthy young uninsured for the sake of the sick and old -- and that it grants Congress unlimited powers to impose purchase mandates. The main thrust of their argument is that the health insurance market is unique across several dimensions, while bogus analogies to mandated purchases of cars or broccoli or whatever are each analogous in only one dimension. Then, regarding the emotional core of the plaintiffs' case -- those imagined legions of healthy young people exploited by the mandate -- Horowitz and Levy write:

Misrepresentation of the mandate in the Supreme Court: why it still matters

I have made the case below piecemeal, across many posts. This is an attempt to make it as succinctly and completely as possible.
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In his oral argument against the constitutionality of the ACA's individual mandate on March 27, plaintiff's counsel Michael Carvin asserted, "Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance" (p. 105).

That is not true -- the ACA provides the catastrophic coverage option for others exempt from the mandate, e.g. on grounds of financial hardship. And that factual error signals a greater distortion, one that was not countered and apparently made a major impression on Justices Alito, Roberts and Scalia: that the mandate forces Americans to buy coverage greatly in excess of what's required to offset the cost of catastrophic care for those lacking health insurance. No one pointed out that a) the ACA provides a catastrophic coverage option for those under 30; b) that it extends that option to others exempt from the mandate on financial or other grounds; or c) that the bronze plans offered in the exchanges, as the Kaiser Family Foundation recently detailed, might also reasonably be labeled "catastrophic" coverage.

It seems to me that a) the justices were misled on this potentially crucial point, and b) Kennedy and/or another might still be convinced, if not to accept the mandate as constructed, to divide the baby by further limiting it -- as Marty Lederman suggested they might:

A catastrophic error: The misrepresentation of the ACA's individual mandate in the Supreme Court

[I am reposting this at intervals.  Justice Kennedy: come in for some cookies and tea?] For those who've noted that, contra the 3/27 oral arguments in the Supreme Court on the constitutionality of the individual mandate in the Affordable Care Act, the ACA does in fact offer various catastrophic coverage options, an index of coverage of this issue, here and elsewhere:

Michael Carvin misrepresented the mandate in oral argument (4/12) 

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)
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)

A Catastrophic Error: The Misrepresentation of the ACA's Individual Mandate in the Supreme Court

For those who've noted that, contra the 3/27 oral arguments in the Supreme Court on the constitutionality of the individual mandate in the Affordable Care Act, the ACA does in fact offer various catastrophic coverage options, an index of coverage of this issue, here and elsewhere. The first, out of sequence, is the most comprehensive statement of the plaintiffs' misrepresentation of the mandate. The rest are in chronological order, by category.

Misrepresentation of the mandate in the Supreme Court: Why it still matters (5/10)
A postscript about the ACA's Basic Health Plan option for states (8/13)
What about state-imposed individual mandates? (6/24)

Three possible surprise rulings on the Affordable Care Act (6/15)

Late pleadings for the ACA (5/31)

The bogus economic basis of the case against the mandate (5/29)

Ask whom the mandate tolls (5/23)

Don Taylor envisions a distant healthcare compromise; might Kennedy impose something like it next month? (5/16)

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

A plea for one more pleading (4/29)
Kaiser weighs in: the ACA offers catastrophic coverage to all comers (4/27

Another 'limiting principle' to the individual mandate: states can opt out (4/23)
Jonathan Cohn tells the justices: the ACA has catastrophic coverage options (4/20)
Michael Carvin misrepresented the mandate in oral argument (4/12)
The ACA offers catastrophic coverage: the AP notices  (4/10)
Marty Lederman concurs: the individual mandate could be trimmed, not killed (4/5)
Go tell the justices: the ACA has a catastrophic coverage option (3/31, updated 4/2)

On the mandate more broadly
The individual mandate is a piece of Cake (4/25)
Verrilli's limiting principles (4/24)
If only Verrilli had said (A, B, C) (3/31)
Verrilli, slapped silly, recovers willy-nilly (3/28)
External links
The morality tale that could sink the ACA (xpostfactoid in the Atlantic, 6/22)
Patient cost-sharing under the Affordable Care Act (Kaiser Family Foundation. 4/27)
Will the justices make a catastrophic error? (Jonathan Cohn, 4/19)
Policy ignorance at the Supreme Court (Steve Benen, Maddow blog, 4/16)
Supreme Court misunderstanding on health overhaul? (AP's Ricardo Alonso-Salvidar, 4/10)
The bounded, minimalist way to uphold the ACA (Marty Lederman at Balkinization, 4/2) 
Ragbatz on the catastrophic coverage options in the ACA - a healthcare attorney picks up the plaintiff's con in real time ( 3/28)

Kaiser weighs in: the ACA offers catastrophic coverage to all comers

As I have noted several times this month, the plaintiffs seeking to get the Affordable Care Act struck down have based their case in large part on assertions that the individual mandate will force masses of healthy young people to buy coverage far in excess of their needs, exploiting them as "golden geese" to fund insurance for older and sicker citizens. I have pointed out that the ACA in fact includes a catastrophic insurance option not only for all adults under 30 but for others who can show financial hardship or are otherwise exempt from the mandate. The AP's Ricardo Alonso-Zaldivar chimed in with an article citing several experts asserting that the cheapest class of plans to be offered in the insurance exchanges, the "bronze" plans, also offer extremely limited coverage -- just 60% of an average policyholder's expenses -- and can also be reasonably deemed "catastrophic." Steve Benen and Jonathan Cohn have also taken up the point.

Now cometh the Kaiser Family Foundation -- perhaps prompted by Cohn, who has written for them -- with a detailed breakdown of the coverage levels and likely deductibles to be faced by policyholders selecting the various levels of coverage made available by the ACA.  Seconding the experts cited by Alonso-Zaldivar, Kaiser deems the "bronze" plans tantamount to catastrophic coverage:

Another 'limiting principle' to individual mandate: states can opt out

In the Supreme Court arguments over the constitutionality of the individual mandate in the Affordable Care Act, the justices who seemed hostile to the mandate challenged Solicitor General Donald Verrilli to articulate a "limiting principle" -- a rule that would place boundaries on Congress's right to mandate purchases. Verrilli did so, rather awkwardly:

When Congress is regulating -- is enacting a comprehensive scheme that it has the authority to enact that the Necessary and Proper Clause gives it the authority 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.

Much of the oral argument focused on the plaintiff's claims that the mandate exceeded the scope necessary to fulfill this purpose --  that it was was "forcing healthy individuals to immediately start paying inflated premiums that exceed their actuarial risk," as Michael Carvin's brief put it -- an argument that seemed to make a deep impression on Justices Alito, Roberts and Scalia. I have argued in several posts that the drafters of the ACA in fact took care on several fronts to limit the scope of the mandate to the minimum required to create a viable private market for affordable health insurance (e.g., by providing catastrophic coverage and limited-coverage options)-- in effect, that the mandate is self-limiting. I have further suggested that Justice Kennedy, who seemed troubled by the scope of the mandate but also recognized  the need to draw the relatively young and healthy into the insurance market, might either recognize the relatively narrow scope in his ruling or divide the baby by limiting the mandate to catastrophic coverage -- an argument developed with considerably more legal precision by Marty Lederman, who served in Obama's Office of Legal Counsel.

Here I want to focus on an element in Donald Verrilli's reply brief  that provides a complementary path to arguing either that the mandate is already sufficiently limited or that it might be further limited.

Jonathan Cohn tells the justices: the ACA has catastrophic coverage options

Jonathan Cohn, one of the foremost bloggers on the U.S. healthcare system and healthcare reform, has taken up the cudgels regarding the Supreme Court justices' apparent ignorance of catastrophic coverage options provided in the Affordable Care Act.  While Cohn is wary of catastrophic coverage on the merits, he regards the "bronze" plans, the cheapest option in the subsidized healthcare exchanges, as providing it, noting too that the ACA allows people under 30 (and others exempt from the mandate, I would add, e.g. those showing financial hardship) to buy catastrophic coverage more strictly construed.

Cohn does not think that the availability of catastrophic coverage in the ACA ought to matter on the legal merits, and there I would take partial issue with him. He writes:

Even if the Affordable Care Act didn’t have a catastrophic coverage option and established a higher standard for benefits, you could make the same constitutional arguments for it—that the law is a perfectly reasonable exercise of federal power to tax, regulate interstate commerce, and do what is “necessary and proper” for carrying out its duties.  

That might be true in a depoliticized legal vacuum.  But the plaintiffs' arguments plainly made a deep impression on Alito, Robert, Scalia -- and, somewhat more equivocally, on Kennedy, all of whom voiced various aspects of those arguments. And Michael Carvin's brief on the individual mandate hammered home relentlessly the claim that the mandate was "forcing healthy individuals to immediately start paying inflated premiums that exceed their actuarial risk" (p. 38); that the mandate would "compel the uninsured into engaging in economic activity that is harmful for them but beneficial to third parties" (p. 1), etc. etc. -- and the conservative justices seem to have bought this argument.

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. 

Verrilli, slapped silly, recovers willy-nilly

I read rather than listened to the Supreme Court pleadings on the individual mandate yesterday, so I missed all the cues of body language and tone. Maybe that's why  I think that Solicitor General Verrilli is getting something of a bad rap in the lethal post-mortems.  (I'll also cop to being biased in favor of those under attack.)

To a degree, I suspect that critics are projecting their own discomfort and shock at the apparent intense hostility to the mandate expressed by Scalia, Roberts and Alito at the outset onto Verrilli, concluding that he buckled under the pressure of hostile questioning. Maybe he did look and sound ill at ease -- the play's the thing, not the script. But if  he did not answer this point or that point at the particular moment when one critic or another thought appropriate, it was in large part because he was repeatedly interrupted.  Ironically, some of the interventions by Ginsburg and Breyer may have diverted him an early answer to the core question: what was his "limiting principle, " a line the federal federal government could not cross while exercising its power to regulate interstate commerce.

By my count, Verrilli was interrupted 44 times in 50 pages of testimony.  Plaintiff's counsel Paul Clement, who was more fluent, was interrupted just 12 times in 24 pages. Clement's co-counsel Michael Carvin was interrupted at a rate similar to Verrilli -- 25 times in 27 pages. But the intensity in the two halves of the proceeding was reversed:  the liberal justices got in the groove of defending the mandate near the end of the proceeding, while Verrilli was buzz-sawed most intensely at the outset -- 16 times in the 15 pages following his opening statement. 

It therefore took him a while to spit out the core points. But he did get them out. The fractured early focus was the basis of much criticism -- for example, Noah Feldman's: