Healthlawpalooza, Part 1: The Main Points
By Mike Dorf
Today the Supreme Court begins the first of three days of oral arguments on issues surrounding the constitutionality of the minimum coverage provision (aka the "individual mandate") of the Patient Protection and Affordable Care Act. Over the last week I have been giving sound bites to the press covering the arguments, but the truth is I have only one substantially new point to add to what I--and many others--have been saying for the last couple of years. My post tomorrow will elaborate that one new thing, but for today I thought it would be useful to recount what I believe are the main points:
1) Today's argument will focus on the tax Anti-Injunction Act. As a matter of plain old statutory construction, the Anti-Injunction Act objection to the Court's even resolving the merits now is reasonably strong--at least given the terms in which the issue has heretofore been argued. Yet delaying merits adjudication would potentially lead to the waste of billions of public and private dollars, and so there is a strong practical imperative for the Court to reach the merits. The cleanest way for that to have happened would have been for Congress to enact a special-purpose exception to the Anti-Injunction Act, but apparently the politics on the Hill wouldn't permit that. The Court still has a principled way to reach the merits without twisting the Anti-Injunction Act by placing emphasis on the fact that where, as here, the exaction at issue has not yet been triggered, a suit to block the law would not be a suit to block the "assessment" or "collection" of taxes. Neil Siegel and I elaborated this argument earlier in the year in the Yale Law Journal Online.
2) Tomorrow the Court will turn to the merits of the challenges to the minimum coverage provision. The Court could--and in my view should--duck the Commerce Clause question by simply upholding the minimum coverage provision as a tax. It's true that there are old cases limiting the ability of Congress to regulate through taxes, but the more recent cases make clear that so long as an exaction has some revenue-generating purpose, then it is sustainable as a tax. And this makes sense. As a policy matter, it is preferable for the government to tax socially harmful activities (such as gambling or cigarettes) than socially valuable ones. To be sure, there is the caveat raised in Professor Buchanan's recent Verdict column, that sometimes a tax on a productive activity like work can incentivize people to work more, but certainly there should be no constitutional rule forbidding Pigovian taxes or other taxes that have regulatory effects. And in any event, even if one requires that the revenue effects be substantial, that standard is met here. The penalty for failure to obtain minimum coverage is substantially smaller than the cost of obtaining health insurance, and so its regulatory impact is not enormous: Many people will choose to pay the penalty rather than buy insurance. Thus a substantial purpose and effect of the penalty provision is to defray some of the cost that the uninsured impose on the health care system, which puts the penalty at the core of the taxing power. I must admit that I find it a little bit mysterious that even lower court judges who thought the law valid on Commerce Clause grounds have tended not to be sympathetic to the tax power argument.
3) As far as the Commerce Clause argument goes, after all that has been said, I remain convinced that the plaintiffs' proffered distinction between regulations of activity and inactivity should be rejected, for the reasons I first elaborated in November 2009. If anything, doctrinal developments since then--especially the Comstock decision--buttress that conclusion. To my mind, the activity/inactivity distinction was always a libertarian argument masquerading as a federalism argument. For reasons I also elaborated in fall 2009, I do not think the libertarian argument is sound on its own terms, but it is not even properly presented in the current litigation. Accordingly, if this were a low-stakes case, I would confidently predict that the Supreme Court would uphold the law, probably by an 8-1 margin--with only Justice Thomas, who expressly takes a pre-New Deal view of federal power, dissenting.
4) What are the stakes? The constitutional stakes are quite low. As I explained in a column last fall, the question whether Congress can regulate "inactivity" is unimportant over the long run. The Supreme Court should not adopt a rule forbidding Congress from imposing affirmative obligations for three chief reasons: a) the distinction is made up out of more or less nothing other than language taken out of context from prior cases; b) the distinction has no logical connection to the Commerce Clause and would need to be accompanied by exceptions for the draft, for mandatory vaccinations, for federal jury duty, and potentially other vital mandates; and c) the distinction would serve no functional purpose. But because of factor c), if the Court nonetheless were to adopt the activity/inactivity distinction, it would make little difference over the long run. As in other contexts where the Court has imposed formal limits that serve little or no functional purpose, Congress could readily evade the limit by restructuring an affirmative obligation as an incentive, a tax, or a condition of some otherwise regulable activity. Sure it's a bad idea for the Supreme Court to make up pointless doctrines, but the Court has done it before and, so long as those doctrines can be evaded, no one is much the worse for it.
5) But that's over the long run. Over the short to medium run, the political stakes are very high. The ACA is the most significant expansion of a federal health program in at least two generations, purchased at considerable political cost to the Democratic Party in Congress and President Obama. Although Congress could re-write the ACA so as to reimpose the substance of the mandate after a Supreme Court decision striking it down, we know that in fact Congress wouldn't do so--at least not unless and until there were a very substantial shift in the balance of power in Congress. With low doctrinal stakes and high political stakes, the case is, as I said in last fall's column, more similar to Bush v. Gore than any case in recent memory.
6) For that reason, I have difficulty making a confident prediction about the outcome. Evaluated through the frame of ordinary doctrine, the litigation looks like a slam-dunk for the government. But evaluated through the political frame of Bush v. Gore, the result seems about as predictable as a 7-10 first-round matchup of March Madness.
Today the Supreme Court begins the first of three days of oral arguments on issues surrounding the constitutionality of the minimum coverage provision (aka the "individual mandate") of the Patient Protection and Affordable Care Act. Over the last week I have been giving sound bites to the press covering the arguments, but the truth is I have only one substantially new point to add to what I--and many others--have been saying for the last couple of years. My post tomorrow will elaborate that one new thing, but for today I thought it would be useful to recount what I believe are the main points:
1) Today's argument will focus on the tax Anti-Injunction Act. As a matter of plain old statutory construction, the Anti-Injunction Act objection to the Court's even resolving the merits now is reasonably strong--at least given the terms in which the issue has heretofore been argued. Yet delaying merits adjudication would potentially lead to the waste of billions of public and private dollars, and so there is a strong practical imperative for the Court to reach the merits. The cleanest way for that to have happened would have been for Congress to enact a special-purpose exception to the Anti-Injunction Act, but apparently the politics on the Hill wouldn't permit that. The Court still has a principled way to reach the merits without twisting the Anti-Injunction Act by placing emphasis on the fact that where, as here, the exaction at issue has not yet been triggered, a suit to block the law would not be a suit to block the "assessment" or "collection" of taxes. Neil Siegel and I elaborated this argument earlier in the year in the Yale Law Journal Online.
2) Tomorrow the Court will turn to the merits of the challenges to the minimum coverage provision. The Court could--and in my view should--duck the Commerce Clause question by simply upholding the minimum coverage provision as a tax. It's true that there are old cases limiting the ability of Congress to regulate through taxes, but the more recent cases make clear that so long as an exaction has some revenue-generating purpose, then it is sustainable as a tax. And this makes sense. As a policy matter, it is preferable for the government to tax socially harmful activities (such as gambling or cigarettes) than socially valuable ones. To be sure, there is the caveat raised in Professor Buchanan's recent Verdict column, that sometimes a tax on a productive activity like work can incentivize people to work more, but certainly there should be no constitutional rule forbidding Pigovian taxes or other taxes that have regulatory effects. And in any event, even if one requires that the revenue effects be substantial, that standard is met here. The penalty for failure to obtain minimum coverage is substantially smaller than the cost of obtaining health insurance, and so its regulatory impact is not enormous: Many people will choose to pay the penalty rather than buy insurance. Thus a substantial purpose and effect of the penalty provision is to defray some of the cost that the uninsured impose on the health care system, which puts the penalty at the core of the taxing power. I must admit that I find it a little bit mysterious that even lower court judges who thought the law valid on Commerce Clause grounds have tended not to be sympathetic to the tax power argument.
3) As far as the Commerce Clause argument goes, after all that has been said, I remain convinced that the plaintiffs' proffered distinction between regulations of activity and inactivity should be rejected, for the reasons I first elaborated in November 2009. If anything, doctrinal developments since then--especially the Comstock decision--buttress that conclusion. To my mind, the activity/inactivity distinction was always a libertarian argument masquerading as a federalism argument. For reasons I also elaborated in fall 2009, I do not think the libertarian argument is sound on its own terms, but it is not even properly presented in the current litigation. Accordingly, if this were a low-stakes case, I would confidently predict that the Supreme Court would uphold the law, probably by an 8-1 margin--with only Justice Thomas, who expressly takes a pre-New Deal view of federal power, dissenting.
4) What are the stakes? The constitutional stakes are quite low. As I explained in a column last fall, the question whether Congress can regulate "inactivity" is unimportant over the long run. The Supreme Court should not adopt a rule forbidding Congress from imposing affirmative obligations for three chief reasons: a) the distinction is made up out of more or less nothing other than language taken out of context from prior cases; b) the distinction has no logical connection to the Commerce Clause and would need to be accompanied by exceptions for the draft, for mandatory vaccinations, for federal jury duty, and potentially other vital mandates; and c) the distinction would serve no functional purpose. But because of factor c), if the Court nonetheless were to adopt the activity/inactivity distinction, it would make little difference over the long run. As in other contexts where the Court has imposed formal limits that serve little or no functional purpose, Congress could readily evade the limit by restructuring an affirmative obligation as an incentive, a tax, or a condition of some otherwise regulable activity. Sure it's a bad idea for the Supreme Court to make up pointless doctrines, but the Court has done it before and, so long as those doctrines can be evaded, no one is much the worse for it.
5) But that's over the long run. Over the short to medium run, the political stakes are very high. The ACA is the most significant expansion of a federal health program in at least two generations, purchased at considerable political cost to the Democratic Party in Congress and President Obama. Although Congress could re-write the ACA so as to reimpose the substance of the mandate after a Supreme Court decision striking it down, we know that in fact Congress wouldn't do so--at least not unless and until there were a very substantial shift in the balance of power in Congress. With low doctrinal stakes and high political stakes, the case is, as I said in last fall's column, more similar to Bush v. Gore than any case in recent memory.
6) For that reason, I have difficulty making a confident prediction about the outcome. Evaluated through the frame of ordinary doctrine, the litigation looks like a slam-dunk for the government. But evaluated through the political frame of Bush v. Gore, the result seems about as predictable as a 7-10 first-round matchup of March Madness.