Excerpts from Supreme Court hearing on ObamaCare

The following are excerpts from Tuesday's Supreme Court hearing on the federal health care overhaul. 

JUSTICE ANTHONY KENNEDY: Can you create commerce in order to regulate it?

SOLICITOR GENERAL DON VERRILLI: That's not what's going on here, Justice Kennedy, and we are not seeking to defend the law on that basis.

In this case, the -- what is being regulated is the method of financing health, the purchase of health care.
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JUSTICE SAMUEL ALITO: Do you think there is a, a market for burial services?

VERRILLI: For burial services?

JUSTICE ALITO: Yes.

VERRILLI: Yes, Justice Alito, I think there is.

JUSTICE ALITO: All right, suppose that you and I walked around downtown Washington at lunch hour and we found a couple of healthy young people and we stopped them and we said, "You know what you're doing? You are financing your burial services right now because eventually you're going to die, and somebody is going to have to pay for it, and if you don't have burial insurance and you haven't saved money for it, you're going to shift the cost to somebody else."

Isn't that a very artificial way of talking about what somebody is doing?

VERRILLI: No, that -

JUSTICE ALITO: And if that's true, why isn't it equally artificial to say that somebody who is doing absolutely nothing about health care is financing health care services?

VERRILLI: It's, I think it's completely different. The -- and the reason is that the, the burial example is not -- the difference is here we are regulating the method by which you are paying for something else -- health care -- and the insurance requirement
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JUSTICE ALITO: But isn't that a very small part of what the mandate is doing? You can correct me if these figures are wrong, but it appears to me that the CBO has estimated that the average premium for a single insurance policy in the non-group market would be roughly $5,800 in -- in 2016.

Respondents -- the economists have supported -- the Respondents estimate that a young, healthy individual targeted by the mandate on average consumes about $854 in health services each year. So the mandate is forcing these people to provide a huge subsidy to the insurance companies for other purposes that the act wishes to serve, but isn't -- if those figures are right, isn't it the case that what this mandate is really doing is not requiring the people who are subject to it to pay for the services that they are going to consume? It is requiring them to subsidize services that will be received by somebody else.

VERRILLI: No, I think that -- I do think that's what the Respondents argue. It's just not right. I think it -- it really gets to a fundamental problem with their argument.

JUSTICE RUTH BADER GINSBURG: If you're going to have insurance, that's how insurance works.

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JUSTICE KENNEDY: Could you help -- help me with this. Assume for the moment -- you may disagree. 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. If that is so, do you not have a heavy burden of justification?

I understand that we must presume laws are constitutional, but, even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?

VERRILLI: So two things about that, Justice Kennedy. First, we think this is regulation of people's participation in the health care market, and all -- all this minimum coverage provision does is say that, instead of requiring insurance at the point of sale, that Congress has the authority under the commerce power and the necessary proper power to ensure that people have insurance in advance of the point of sale because of the unique nature of this market, because this is a market in which -- in which you -- although most of the population is in the market most of the time -- 83 percent visit a physician every year; 96 percent over a five-year period -- so virtually everybody in society is in this market, and you've got to pay for the health care you get, the predominant way in which it's -- in which it's paid for is insurance, and -- and the Respondents agree that Congress could require that you have insurance in order to get health care or forbid health care from being provided
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JUSTICE KENNEDY: Well, then your question is whether or not there are any limits on the Commerce Clause. Can you identify for us some limits on the Commerce Clause?

VERRILLI: Yes. The -- the rationale purely under the Commerce Clause that we're advocating here would not justify forced purchases of commodities for the purpose of stimulating demand. We -- the -- it would not justify purchases of insurance for the purposes -- in situations in which insurance doesn't serve as the method of payment for service -

JUSTICE KENNEDY: But why not? If Congress -- if Congress says that the interstate commerce is Affected, isn't, according to your view, that the end of the analysis.

VERRILLI: No. The, the -- we think that in a -- when -- the difference between those situations and this situation is that in those situations, Your Honor, Congress would be moving to create commerce. Here Congress is regulating existing commerce, economic activity that is already going on, people's participation in the health care market, and is regulating to deal with existing effects of existing commerce.
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JUSTICE ANTONIN SCALIA: Oh, no, it's not. They all involved commerce. There was no doubt that was what regulated was commerce. And here you're regulating somebody who isn't covered.

By the way, I don't agree with you that the relevant market here is health care. You're not regulating health care. You're regulating insurance. It's the insurance market that you're addressing and you're saying that some people who are not in it must be in it and that's -- that's difference from regulating in any manner commerce that already exists out there.

VERRILLI: Well, to the extent that we are looking at the comprehensive scheme, Justice Scalia, it is regulating commerce that already exists out there. And the means in which that regulation is made effective here, the minimum coverage provision, is a regulation of the way in which people participate, the method of their payment in the health care market. That is what it is.

And I do think, Justice Kennedy, getting back to the question you asked before, what -- what matters here is whether Congress is choosing a tool that's reasonably adapted to the problem that Congress is confronting. And that may mean that the tool is different from a tool that Congress has chosen to use in the past. That's not something that counts against the provision in a Commerce Clause analysis.

JUSTICE SCALIA: Wait. That's -- that's -it's both "Necessary and Proper." What you just said addresses what's necessary. Yes, has to be reasonably adapted. Necessary does not mean essential, just reasonably adapted. But in addition to being necessary, it has to be proper. And we've held in two cases that something that was reasonably adapted was not proper because it violated the sovereignty of the States, which was implicit in the constitutional structure.

The argument here is that this also is -- may be necessary, but it's not proper because it violates an equally evident principle in the Constitution, which is that the Federal Government is not supposed to be a government that has all powers; that it's supposed to be a government of limited powers. And that's what all this questioning has been about. What -- what is left? If the government can do this, what, what else can it not do?
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JUSTICE KENNEDY: But the reason, the reason this is concerning, is because it requires the individual to do an affirmative act. In the law of torts our tradition, our law, has been that you don't have the duty to rescue someone if that person is in danger. The blind man is walking in front of a car and you do not have a duty to stop him absent some relation between you. And there is some severe moral criticisms of that rule, but that's generally the rule.
And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases and that changes the relationship of the Federal Government to the individual in the very fundamental way.

VERRILLI: I don't think so, Justice Kennedy, because it is predicated on the participation of these individuals in the market for health care services. Now, it happens to be that this is a market in which, aside from the groups that the statute excludes, virtually everybody participates. But it is a regulation of their participation in that market.

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JUSTICE ELENA KAGAN: And this is especially true, isn't it, General -

VERRILLI: -- because that's the judgment Congress has made.

JUSTICE KAGAN: -- Verrilli, because in this context, the subsidizers eventually become the subsidized?

VERRILLI: Well, that was the point I was trying to make, Justice Kagan, that you're young and healthy one day, but you don't stay that way. And the -- the system works over time. And so I just don't think it's a fair characterization of it. And it does get back to, I think -- a problem I think is important to understand -

JUSTICE SCALIA: We're not stupid. They're going to buy insurance later. They're young and -- and need the money now.

VERRILLI: But that's -

JUSTICE SCALIA: When -- when they think they have a substantial risk of incurring high medical bills, they'll buy insurance, like the rest of us. But -

VERRILLI: That's -- that's -

JUSTICE SCALIA: -- I don't know why you think that they're never going to buy it.

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