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ObamaCare Takes Hits from SCOTUS: What the Affordable Care Act Means for America

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By all accounts, the Obama administration did not have a good day in court on Tuesday.

Day two of the Supreme Court's three days of hearings over whether President Obama's health care reform law is constitutional featured some tough questions for the President's lawyer, Donald Verrilli Jr.

"Assume for the moment that this is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to act to go into commerce," declared Justice Kennedy. "If that is so, do you not have a heavy burden of justification?"

Justice Kennedy, a potential swing vote in this case, was referring to the most controversial aspect of the Affordable Care Act (a.k.a. ObamaCare), the individual mandate.

Opponents of the mandate, including 26 State Attorneys General, believe the federal government's power to set rules for interstate commerce does not extend to regulating "inactivity," i.e. the government can't force citizens to pay a fine for refusing to buy health insurance.

Justice Scalia, one of the court's most conservative judges, also challenged Verrill's arguments, comparing health care to food.

"Everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli," Justice Scalia said.

Prior to Tuesday's hearing, a majority of Constitutional scholars, as well as former Supreme Court clerks expected the court to uphold the law. They may still, and tough questions do not necessarily indicate how a given Justice will vote but "Las Vegas would puts the odds more in favor of [the Supreme Court] striking down the law" today vs. yesterday, says Dr. Michael Sparer, chair of the Columbia Mailman School of Public Health's Department of Health Policy and Management.

Ever since the New Deal, the Supreme Court has effectively allowed the federal government more and more leeway to regulate anything that could affect interstate commerce. The government's argument this week is that 45 to 50 million people without health insurance has a huge impact on commerce.

"People are doing all sorts of things," Dr. Sparer observes. "They end up in emergency rooms…can't pay the bills and hospitals shift costs to private insurance companies," which in turn drives up health care premiums for those with insurance.

The State AGs, along with the National Federation of Independent Businesses (NFIB) argue the individual mandate brings the federal government to the "outer limits" of what it can regulate, Dr. Sparer says. "The question for the court: do they really go with the prior 60 years of precedent, [health care] has obviously an effect on interstate commerce, or do they say 'we've gone too far.'"

Tuesday's hearings suggest the "skepticism by a number of judges of whether we've hit that limit," he says.

CNN's legal analyst Jeffrey Toobin, called Tuesday "a train wreck for the Obama administration" and declared the President's signature legislation "looks like it's going to be struck down. I'm telling you, all of the predictions including mine that the justices would not have a problem with this law were wrong."

Dr. Sparer, for one, still believes the Affordable Care Act will be upheld.

"Odds are the law will be upheld as constitutional," he says. "A large majority of constitutional law scholars would say if the court applies prior precedent, they'll uphold the law."

In the accompanying video, taped prior to Tuesday's hearing, Dr. Sparer and I also discuss the basic elements of ObamaCare.

Arguably the most polarizing piece of legislation in a generation, the Affordable Care Act has been described as "Socialized Medicine" and the beginning of the end of the American way of life.

According to Dr. Sparer, President Obama's goal was something far less nefarious: To make the health care system "more efficient, more affordable and more accessible."

The Affordable Care Act attempts to do that in six major ways, he says:

  • Expand Medicaid. (The Supreme Court will also hear oral arguments over the law's requirement that states comply with an expansion of Medicaid to cover about 16 million lower-income people without health insurance. Citing lower court rulings on this issue, Dr. Sparer says it's highly unlikely the Supreme Court will side with opponents of the Act.)
  • Create purchase pools for individuals and small business to buy insurance, including subsidies to buy private insurance.
  • Mandate employers with over 50 employees provide insurance or pay a penalty. (Some people believe this is a Trojan Horse to government-run insurance, suggesting many employers will calculate it's cheaper to pay the fine vs. provide insurance to employees, pushing millions more onto government roles. Dr. Sparer says that's a risk but argues one with a low probability.)
  • Give tax credits to small businesses for providing insurance.
  • Impose a whole host of new federal regulations, including prohibitions on excluding people with preexisting conditions.
  • The individual mandate requiring every American to obtain insurance by 2014 or pay a penalty. (See above.)

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com

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