IE 11 is not supported. For an optimal experience visit our site on another browser.

High court considers cornerstone of health care reform law

Two years after a hard-fought victory, President Obama’s signature legislative accomplishment faces its stiffest challenge yet as the United States Supreme Court heard arguments Tuesday about the cornerstone of the health care reform law. The outcome of Tuesday's argument could demolish the entire law or cement it for decades to come.

The fate of the health care overhaul will hinge on the issue the justices weigh during two hours of argument Tuesday morning: does Congress have the power to force individuals to buy a product they otherwise would not have purchased?

Much of Tuesday’s battle will focus on the extent of Congress’s reach under the power to regulate interstate commerce which the Constitution assigns to it.

Arguing on behalf of Florida and 25 other states, Paul Clement, the former solicitor general in the Bush administration, contended in his brief that “the Commerce Clause does not grant Congress the power to compel individuals to enter into commerce.”

President Obama's landmark health care reform law is under the microscope during a second day of arguments at the Supreme Court. NBC's Pete Williams reports.

“If Congress has the power not just to regulate commercial suppliers and those who voluntarily enter the market, but to compel demand as well, then we have truly entered a brave new world,” Clement wrote in his brief.

If the justices allow the insurance mandate to stand, he said, then it “would allow Congress to control the most basic of decisions about how to live life – in other words, to withhold from individuals the very liberty that the Constitution was designed to protect.”

The mandate is backed up by a financial penalty the law imposes on uninsured people who choose to not buy insurance. This provision takes effect in 2014.

In his brief for the Obama administration, Solicitor General Donald Verrilli defended the minimum coverage provision – the requirement to purchase insurance -- saying it “regulates economic activity that substantially affects interstate commerce. Its links to interstate commerce are tangible, direct, and strong. It is therefore well within the established scope of Congress’s power.”

“The manner in which individuals finance and pay for services in the health care market,” he said, has a substantial effect on interstate commerce.

Verrilli also relied on the argument that when it enacted the 2010 health care overhaul, Congress had addressed an urgent national need.

“Congress found that the cost of tens of billions of dollars in uncompensated care provided to the uninsured is passed on to insured consumers, raising average annual family premiums by more than $1000,” he said.

And in an appeal to conservative Justice Antonin Scalia, Verrilli in his brief frequently cites Scalia’s concurring opinion in the court’s 2005 Gonzales v. Raich medical marijuana decision. In that case, the court ruled that a woman who grew marijuana in her backyard for her own consumption was still subject to federal laws banning marijuana.

Verrilli approvingly quoted Scalia’s concurrence in the Raich case: “Marijuana that is grown at home and possessed for personal use is never more than an instant from the interstate market.”

So, too, Verrilli said, a person who chooses to go without insurance is never more than an instant from needing medical care. “Because of human susceptibility to disease and accident, we are all potentially never more than an instant from the ‘point of consumption’ of health care, yet it is impossible to predict which of us will need it during any period of time,” he said.

And he said, “Health insurance, by definition, must be purchased before filing a claim. Individuals who think they can go without it will often turn out to be wrong. At the point health care is consumed, it is too late to avoid the market disruption caused by the shifting of risks and costs to others,” he said.

The Obama administration also contends the individual mandate is a valid exercise of Congress’s taxing power.

In its oral argument on Monday, the court considered whether those who seek to overturn the individual mandate must first pay the penalty.

Verrilli argued that the penalty is not a tax and therefore not covered by the Anti-Injunction Act, a law requiring payment of a tax before that tax can be challenged in court.

Justice Samuel Alito said to 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.”

Alito asked if the Supreme Court had ever ruled that “something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?”  

No, Verrilli replied, but the court has held that “something can be a constitutional exercise of the taxing power whether or not it is called a tax.”

Also arguing the case Monday morning will be former Reagan administration Justice Department official Michael Carvin, representing the National Federation of Independent Business, which opposes the insurance mandate.

Veteran court observers caution that one shouldn't read too much into what any particular justice says during oral arguments; a justice will sometimes test out a theory and his comments don’t necessarily indicate which way he'll decide. The court is expected to hand down its ruling in June.