Why Obamacare May Stand: Reading Justice Kennedy, the Supreme Court’s Swing Vote

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Saul Loeb / Pool / AP

President Barack Obama shakes hands with Supreme Court Justice Anthony Kennedy, center, as Justice Ruth Bader Ginsburg looks on prior to the President's State of the Union address in Washington on Jan. 24, 2012

After three days of oral arguments and intense speculation in the press, the Supreme Court is said to be holding an initial vote Friday, March 30, on the fate of President Obama’s landmark health reform law. While conventional wisdom has swung against the high court’s upholding the law, a close reading of Justice Anthony Kennedy’s questioning and conversations with his former clerks suggests that a week of breathless coverage has overstated the likelihood of that happening.

It is true that Solicitor General Don Verrilli had a bad day on Tuesday. It is also true that the conservative Justices on the Supreme Court asked hard questions of the government and easier questions of the law’s opponents. But Verrilli’s performance and the tone of the conservatives’ questions are vastly less important to whether Obamacare survives than many seem to think.

(PHOTOS: Supreme Court Health Care Protests)

The individual mandate and Obamacare will sink or swim on one simple judgment: whether uninsured Americans are in the health insurance market. Everyone agrees that Congress can force the uninsured to buy health insurance if they are in that market. Michael Carvin, arguing for the suing small-business group, said Tuesday, “Yes, when you’ve entered the marketplace, [Congress] can impose all sorts of restrictions on you.” And Paul Clement, arguing for the suing states, agreed that a patient who shows up at an emergency room can be forced to buy insurance on the spot before receiving care.

But are those same uninsured people “in the marketplace” before they get sick? What about when they are young and healthy? On that question, Justice Anthony Kennedy and Chief Justice John Roberts were more equivocal than you might think. “[Kennedy] sounded conflicted,” says his former Supreme Court clerk, George Washington University law professor Orin Kerr. “I’m not sure which way he’ll come out.”

The best guide for navigating the question of whether the uninsured are in the health insurance market remains the opinion (.pdf) of Jeffrey Sutton, the former clerk of conservative Justice Antonin Scalia. Sutton ruled in favor of the law in the Sixth Circuit last June, and many of the questions asked this week by both sides of the court were grappling with and responding to the issues Sutton raised.

(MORE: Why Obamacare Supporters Are Getting So Nervous)

Sutton said it seemed intuitive that Congress can’t force people to buy something they don’t want. But he then showed that the courts have already given Congress that power in other areas, like taxation. He further argued that the health insurance market is in some ways unique, because everyone will be in it at some point. Sutton concluded that “sometimes an intuition is just an intuition” and that the mandate is well within Congress’s power under the Commerce Clause of the Constitution.

Looking at Kennedy’s and Roberts’ questions, it’s not clear to me they disagree with Sutton. They spent a fair amount of time testing Verrilli’s (poorly expressed) limiting principles and testing the idea that Congress’s power under the Commerce Clause might be unchecked. But Kennedy agreed on Tuesday with Sutton that Congress may have the power elsewhere:

Let’s assume that it could use the tax power to raise revenue and to just have a national health service, single payer. How does that factor into our analysis? In one sense, it can be argued that this is what the government is doing. It ought to be honest about the power that it’s using and use the correct power.

On the other hand, it means that since the court can do it anyway — Congress can do it anyway — we give a certain amount of latitude. I’m not sure which the way the argument goes.

Furthermore, much has been read into Kennedy’s statement that forcing individuals to buy health insurance changes the relationship between the individual and the government in a fundamental way, and that moment showed that Kennedy takes Sutton’s “intuitive” concern seriously. But the full exchange shows that both he and Roberts are looking at how that issue is managed in the law.

JUSTICE KENNEDY: … 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 a 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.

CHIEF JUSTICE ROBERTS: Well, but it’s critical how you define the market … You cannot say that everybody is going to participate in the substance-use-treatment market, and yet you require people to purchase insurance coverage for that.

VERRILLI: Congress has got — Congress is enacting economic regulation here. It has latitude to define essential — the attributes of essential coverage. That doesn’t — that doesn’t seem to me to implicate the question of whether Congress is engaging in economic regulation and solving an economic problem here, and that is what Congress is doing.

Does all this mean Obamacare will survive? Not at all. Another Kennedy clerk, who is occasionally politically active but whose judgment has been rock solid over the years, tells me on background, “I would say that he’s going to vote to overturn the entire bill. His questioning strongly suggested that, and it’s rare that he votes differently than he appears to lean during oral argument.  He’s fairly straightforward in that regard.  I think the bill goes down in its entirety 5-4.”

(MORE: Can Health Reform Stand Without a Mandate?)

Others say the arguments have been overread but that they are still indicative of some hostility to the mandate. Says Tom Goldstein, the dean of court watchers and a prolific member of the Supreme Court bar: “The point isn’t just that they asked the questions of the government but that they didn’t press the other side nearly as hard.  I do not think it is clear that the government will lose.  And I don’t think the oral arguments will be significant to the outcome.  But I do think that it is fair to say that they went poorly for the government.”

Will Obamacare survive? To my eyes, looking past the theatrics at the court this week, the law’s constitutionality remains very much in play.