As the PPACA wends its way through federal court, there have been conflicting opinions on its constitutionality issued by varying federal judges. When the lawsuits were first filed against the health care reform law, they were given little chance of succeeding by legal experts. The reason for this is that the key challenge to the law is based on an interpretation of the Commerce Clause which runs contrary to settled law for the last 60 years. The commerce clause has been something of a political football, historically. In the late nineteenth century and early twentieth century, judges used the commerce clause to restrict the power of the federal government, and then in the New Deal era, the Supreme Court changed its view and used the commerce clause to expand the scope of the federal government. The modern conservative court has begun to incrementally restrict the scope of the Commerce Clause, but the current Supreme Court seemed to set a limit of how far they would restrict the use of this power in a 2005 case upholding the authority of the federal government to criminalize marijuana which is grown, sold and consumed within a single state. Kennedy and Scalia concurred in this decision, and Scalia's separate concurring opinion reads in part:
"Where Congress has authority to enact a regulation of interstate commerce, it possesses every power needed to make that regulation effective. ... The power to enact laws enabling effective regulation of interstate commerce can only be exercised in conjunction with congressional regulation of an interstate market, and it extends only to those measures necessary to make the interstate regulation effective. As Lopez itself states, and the Court affirms today, Congress may regulate noneconomic intrastate activities only where the failure to do so “could … undercut” its regulation of interstate commerce."
More recently, a majority including Chief Justice Roberts wrote, “determining whether the Necessary and Proper Clause grants Congress the legislative authority to enact a particular federal statute, we look to see whether the statute constitutes a means that is rationally related to the implementation of a constitutionally enumerated power.” The healthcare market is inarguably interstate and thus a fit area for government regulation, and since the individual mandate is not only "rationally related" to the regulation of this market, but integral to its regulation, it seems that it fits quite clearly into the framework established by the Court as a constitutional exercise of the government's power.
So it was (and remains) reasonable for observers to expect the Supreme Court to stand by its own longstanding and recently upheld precedents to uphold the law. Indeed, a recent group of 100 law professors signed a joint statement (PDF) in support of the constitutionality of the law. But unfortunately 100 law professors are not worth one Scalia or half a Kennedy, and what the Court will ultimately do is not clear. Opponents of the law have an interesting if logically tortured argument that PPACA attempts to regulate economic "inactivity." It has been noted that the 1942 Wickard case justified regulation of economic inactivity, so even that would seem to fail the precedents set by the Court. What we really cannot guess boils down to three things: 1.) How political is this Court, and 2.) How activist is this Court and 3.) What will Kennedy do? While we like to think of the Court as nominally apolitical, the 2000 Gore v Bush case revealed how readily the justices can at times discard principle to accomplish a politically desired outcome. The stakes in this decision are just as high, and the partisan fervor no less intense than in a presidential election. It would not surprise me in the least to see Scalia switch sides in order to stick a finger in the eye of democrats. The Roberts court already has a shocking track record of judicial activism (which I say as an observation, not a criticism; I've never thought the idea of a neutral arbiter of law was possible or desirable.) and they may well leap at an opportunity to further restrict the power, size, and scope of the federal government. However, this may be a bridge too far for them, particularly for Kennedy, since a decision restricting the Commerce Clause to this degree could invalidate a whole host of federal laws and regulations far beyond this limited case. I'm not sure Kennedy is willing to endorse such a radical restructuring of the US government, and I'm also not sure he wants to be on the "wrong side of history" in invalidating such a monumental legislative accomplishment.
This is all just speculation and guesswork. It'll likely be years before we know anything on this case. But since we are engaging in idle speculation, it might be interesting to wonder what might happen if the Court does agree that the individual mandate does violate the Commerce Clause?
First of all, it's likely that conservatives will be disappointed that "ObamaCare" will probably not be struck down in toto. While it is true that Congress did not include a specific severability clause, it's a fact that the court has also held many times that legislation can still stand if just a single element of it is invalidated. More distressingly for opponents of the legislation, the conservative judge who did rule the PPACA unconstitutional did just that: severed section 1501 (the mandate) while leaving the rest of the law in force.
This is pretty key. It means that even if we lose at the Supreme Court, it is highly likely that the rest of PPACA stands. The subsidies, the medicaid expansion, the insurance regulations and exchanges, the independent payment advisory board -- all of it. Only the mandate goes.
What would that mean for reform overall? That's less clear. For sure, coverage would be less universal. There will still be millions of uninsured even under PPACA as it is, but surely more people would opt out of buying insurance, diminishing the risk pools and creating adverse selection problems for insurers, who will still be bound by regulations requiring them to live with medical loss ratios of 80-85%. In that case I can easily see the insurance industry coming back to Congress and demanding a fix for the situation. If nothing else happens, the prediction is pretty grim from a cost perspective: health care economist Jonathan Gruber estimates that removing the mandate only would result in individual premiums being 27% higher than they would under the act with the mandate, and that only 7 million more people would have insurance, compared to the 32 million newly insured under the PPACA.
So the mandates are pretty critical to achieving the goal of near-universal healthcare coverage. It would be pretty bad for reform if that were struck down. But it wouldn't be the end of the world, and it wouldn't even necessarily be the end of reform. If the partisan furor over this bill ever dies down in a few years, once the insurance exchanges and other regulations have been accepted as part of the political landscape, it is possible and even likely that a future Congress might be able to come together to amend the law to make it work better. Maybe I'm just dreaming on that point. But it is instructive to look back on the Medicare program, which was about as controversial and bitter a fight as this when it began, and after only a few years it was accepted and expanded in a bipartisan manner to be the program it is today.