March 27, 2012

The Supreme Court appeared closely divided along ideological lines during tense arguments over President Barack Obama’s healthcare law on Tuesday, with conservative justices vigorously questioning the Obama administration’s lawyer on whether Congress had the power to require people to buy medical insurance.

During two dramatic hours, pivotal justices on the nine-member court suggested they would uphold this so-called individual mandate – to obtain insurance or pay a penalty – only if they believed they were not giving Congress broad new powers over people’s lives.

The justices were combative with the lawyers on both sides, at times firing off hard-hitting questions about the limits of the federal government’s power and whether it could even extend to requiring eating broccoli and buying gym memberships or cars.

While conservative justices took aim at the insurance mandate, liberal justices defended it.

The session was far more intense than Monday’s opening arguments during which the justices appeared willing to overcome questions about whether tax law prevented them from considering the case for several years.

The court will hear a third and final day of arguments on Wednesday in a case in which 26 of the 50 states and a small-business trade group are challenging a law that represents Obama’s signature domestic policy achievement but is reviled but U.S. conservatives.

Chief Justice John Roberts and Justice Anthony Kennedy, two conservatives who could join the four liberal justices to uphold the law, pressed the Obama administration’s lawyer, U.S. Solicitor General Donald Verrilli, to say where the limits would be on federal power if people opposed to insurance were forced to buy coverage.

Verrilli emphasized that Congress was trying to address the troubling problem of shifting costs from those who are uninsured to those who purchase coverage, arguing “the system does not work” and Congress was addressing “a grave problem.”

Roberts and Kennedy were also piercing in their questions to the two lawyers challenging the individual mandate about the government’s contention that Congress is validly regulating people who already are in the market because virtually everyone is going to need healthcare at some point.

“That’s my concern in the case,” Kennedy said, noting that young, uninsured people affect the overall market by not paying into it and ultimately receiving care over the long term.

The court’s ruling on the insurance requirement, which takes effect in 2014, could decide the fate of the massive multi-part healthcare overhaul meant to improve access to medical care and extend insurance to more than 30 million people.

COURT REFLECTS COUNTRY’S DIVISION

Views of Obama’s healthcare law that have long divided Democrats and Republicans across the country played out also in the ornate courtroom.

The four liberal justices, Stephen Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, all indicated that they believed the mandate valid under the U.S. Constitution. Two conservatives, Antonin Scalia and Samuel Alito, were vocal in their skepticism about the requirement.

Scalia in particular seemed concerned that Congress and the federal government would have unlimited powers if the law was upheld. “What is left? What else can it not do?”

The ninth justice, conservative Clarence Thomas who is expected to vote against the law, asked no questions. Thomas last asked a question from the bench more than six years ago.

At the end of day’s arguments, it looked to be close. After a third day of arguments on other issues, the justices would continue discussions behind closed doors as they draft their opinions, likely to be released in late June.

The ruling’s timing will come as Obama gears up his campaign for re-election on Nov. 6. The Republican candidates competing for their party’s nomination to challenge Obama in November all denounce the law.

Outside the white marble courthouse, a crowd of supporters and protesters filled the wide sidewalk, marching, chanting and carrying signs. A motorcycle shop manager from Massachusetts, Michael Wade, called the healthcare law a “power grab” by Obama. Supporters of the law marched and chanted: “We love Obamacare.”

No past rulings are completely on point and many observers have speculated about how the ideologically divided justices will decide the limits of congressional power to address society’s most intractable problems. Not since 1936 has the Supreme Court struck down a major piece of federal economic legislation as exceeding congressional power.

Kennedy, who often casts the decisive vote on the court, expressed concern about changing the relationship between government and the people governed by it “in a very fundamental way.”

“Do you not have a heavy burden of justification to show authority under the Constitution?” he asked Verrilli.

Roberts also offered some support to those who opposed the insurance requirement. He voiced worries about regulating those who opt out of a commercial transaction. Once you say Congress can regulate a market, “pretty much all bets are off,” he added.

At stake on Tuesday was Congress’ power to intervene in one of U.S. society’s most difficult problems – soaring healthcare costs and access to medical care. Annual U.S. healthcare spending totals $2.6 trillion, about 18 percent of the annual gross domestic product, or $8,402 per person.

Shares of health insurers and hospital companies were trading modestly lower at mid-day after the arguments. The Morgan Stanley Healthcare Payor index of insurers was down 0.8 percent, while the broader stock market was little changed.

Large insurers UnitedHealth Group and WellPoint were off 0.5 percent and 1.2 percent respectively, while shares of hospital chain Community Health Systems was down 0.7 percent and those of rival Tenet Healthcare were off 1.4 percent.

TOP LAWYERS

Taking up the challenge of fighting for and against the insurance mandate were three of the country’s top appellate lawyers, including Verrilli for the administration and Paul Clement, one of his predecessors as the government’s top courtroom lawyer during the Bush administration.

Verrilli took a low-key approach in his arguments and at times the liberal justices, notably Kagan and Ginsburg, tried to bolster his points and counter a barrage of skeptical questions from the conservatives.

Coming to Verrilli’s aid at one point, Ginsburg stressed that healthcare was more about timing, that healthy people pay in now and take it out when needed. “That’s how insurance works.”

Clement, arguing on behalf of the states challenging the law, said Congress went too far and that the individual mandate “represents an unprecedented effort” that has no limiting principles.

A New York Times/CBS News poll showed that a narrow majority of Americans oppose the individual mandate, 51 percent to 45 percent, but strongly supported other provisions of the law covering pre-existing medical conditions and allowing young adults to stay on their parents’ health insurance plans.

On its website the Supreme Court posted the audio of the oral argument as well as a transcript: http://www.supremecourt.gov/oral_arguments/argument_audio_detail.aspx?argument=11-398-Tuesday.

The Supreme Court cases are National Federation of Independent Business v. Sebelius, No. 11-393; U.S. Department of Health and Human Services v. Florida, No. 11-398; and Florida v. Department of Health and Human Services, No. 11-400.

With additional reporting by Jeremy Pelofsky and Ian Simpson in Washington and Lewis Krauskopf in New York; Editing by Howard Goller and Will Dunham