Supreme Court hearing on individual mandate tees up blockbuster decision

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Supreme Court to examine health care's individual mandate

Controversial part of ObamaCare goes before high court

The Supreme Court hearing Tuesday on the controversial federal health care law will be one for the history books.

After presumably clearing away a technicality which was the focus of the in-the-weeds opening day, the justices are getting down to the indisputable linchpin of the entire health law challenge and the matter that will most likely end up making legal history.

The so-called individual mandate is now under scrutiny, as the Supreme Court launched into its hearing Tuesday morning.

Though the ruling likely won't be issued for months, both sides of the argument descended on Washington for this day. At issue is the provision in the law requiring Americans to buy health insurance. And it could unravel President Obama's biggest domestic policy achievement if it's struck down.

Tuesday's arguments will present the justices the opportunity to determine how much power the federal government has in forcing Americans to purchase a product or enroll in a government program they might otherwise avoid. Washington lawmakers have never before used this power. Some say that's because it's never been this necessary; others contend it's because the authority doesn't exist.

The justices will be looking at three significant constitutional areas to determine whether the Affordable Care Act (ACA) is lawful: the Commerce Clause, the Necessary and Proper Clause and the federal government's taxing power.

The most prominent of these is the Commerce Clause, which gives the government power to regulate commercial activity among the states.

Both sides have used the Court's precedents on Commerce Clause cases to bolster their arguments. Over the years, the power has been broadly interpreted giving the feds greater authority to regulate local activities ranging from wheat production to marijuana use. But the Court has also in recent years found several narrow areas to check federal action.

In many ways, the conflict is one of perspective.

The government would like the nine justices to view the problems of uninsured people and the high costs of insurance for those who have it as a matter of vital importance to the country's future.

"This is classic economic regulation of economic conduct," Solicitor General Don Verrilli told the court, working under the theory that all people must at some point in time purchase or use health care.

The government tries to bolster its case by pointing out the economic difficulties in sustaining the old system. Verrilli says the health law was passed to address a "crisis in the national health care market." He cited numbers showing the average cost of a hospital stay for an uninsured person exceeded $22,000 and that oftentimes these individuals "can rarely cover charges of this magnitude," forcing others to cover the difference.

The contrary view pressed by the plaintiffs is more focused on an individual level and examines what activity -- or inactivity -- Congress can regulate. They agree that the federal government has every right to control commerce, but argue the feds have no constitutional authority to force people into the marketplace by making them buy a product -- health insurance -- that they don't want or feel they don't need.

"A power to regulate existing commercial intercourse is precisely what the framers sought to confer upon the new federal government," Paul Clement, a former solicitor general now representing the 26 states challenging the law, told the court.

But he then went on to argue that "the power to compel individuals to enter commerce, by contrast, smacks of the police power, which the framers reserved to the States."

It is this line of argument about unchecked authority that gives rise to the concern that an unlimited commerce power could lead to the government issuing mandates about what cars people must buy or food they must consume.

The phrase Clement will use in the courtroom is "limiting principle." It's determining where the line is drawn. For instance, we know that police officers may enter a home to search for evidence. But the Constitution limits that power by forcing the authorities to get a judge's approval with a signed warrant. Clement says that sort of limiting principle doesn't exist in the ACA and must be struck down.

In his opinion last year affirming the ACA, Judge Laurence Silberman of the D.C. Circuit Court of Appeals, said the word "regulate" very much includes the idea of requiring action of participants and non-participants alike. Silberman, widely regarded as a reliably conservative jurist, said that Supreme Court opinions over the years only addressed existing "activities" because the "inactivity" concern wasn't an issue.

Clement, in an interview with Fox News, spoke about his role in the case and made a general reference to the Silberman ruling. "You know, the other side likes to point to a couple of Republican-appointed judges who upheld the law." He then noted that a judge appointed by President Clinton, a Democrat, struck down the law in the 11th Circuit case that's now before the high court. "And I just think this shows this is a case where the judges and justices are open to persuasion, and therefore the advocacy really matters."

As with any case before the Supreme Court, there is much attention given to the justices and examining their writings in past cases with the hope of divining how they might vote. Justices Anthony Kennedy and Antonin Scalia have issued separate opinions in several Commerce Clause cases that provide some insight into their views.

Scalia concurred in a marijuana case affirming the federal government's authority to regulate a home-grown marijuana operation even though it was strictly for personal use and had no direct tie to commerce. Some liberals see the ruling as a sign that Scalia, a conservative justice, will similarly vote in favor of the health care mandate.

Clement disagreed.

"I think some people, frankly, haven't read the whole opinions they're talking about. A lot of people are very excited about Justice Scalia's opinion (in the marijuana case)," Clement said in the interview. "I look at what he wrote and I think it's actually, frankly, helpful for us in arguing this case."

But that case and others haven't directly addressed the mandate issue before the Court. Silberman and others think the one case that comes closest to the mandate question was decided by the Court in 1942.

The Court unanimously voted in favor of the government when a wheat farmer grew additional grain beyond the allowed allotment. Though Ohio farmer Roscoe Filburn grew the excess wheat for his family's own consumption, the Court ruled that he could still be regulated by the feds because that wheat (or some of it) could still be diverted to the national marketplace. The court noted that the wheat regulation was constitutional even though it forced some people to buy wheat they could otherwise provide for themselves.

But Michael Carvin, representing the National Federation of Independent Businesses and several individual challengers, said the health care case and wheat case are different. Carvin argued that Filburn's wheat production was an active effort that thwarted federal regulations, unlike someone's decision to simply not buy health insurance.

The Necessary and Proper Clause is closely related and gives the government power to implement laws to help carry out legitimate policies. In this instance the government argues the health care law is needed to provide near universal health insurance coverage at an affordable cost.

But Carvin says it doesn't matter if Congress is trying to encourage, or discourage, commerce. "It cannot regulate conduct that is not interstate commerce simply because the regulation itself would improve interstate commerce."

Just as with the Commerce Clause cases, all sides on this issue look to past precedents for guidance on their arguments. The most recent case involved a challenge to a federal law mandating civil commitment for people convicted of sex crimes who are still deemed a threat when their prison terms have ended. That ruling said the federal government's law was necessary and proper to fulfill its obligations in protecting the public.

Chief Justice John Roberts signed on to the court's majority opinion. Justice Kennedy agreed with the result but he issued his own separate write-up to emphasize that in his view, "this is a discrete and narrow exercise of authority over a small class of persons already subject to the federal power."

The ACA is anything but narrow and may give opponents of the health care law reason for hope that Kennedy, often seen as the key vote on the bench, will side with them to strike down the law.

The other fundamental constitutional battle is over whether the federal government's taxing power legitimizes the health care mandate. This area returns the Court back to the debate over whether the cost of noncompliance is a "penalty" or a "tax," an issue the Court heard Monday in a dispute over whether lawsuits challenging the ACA should be blocked until 2015. The Court signaled they should not.

Verrilli's brief says the minimum coverage provision is effectively a tax law because it is administered and enforced by the IRS, even though the law clearly says penalty.

The states argue a penalty is not a tax and therefore contend it's not constitutionally protected.

They also point out that language in the House version of the bill called it a tax, but that was scrubbed suggesting that Congress knows the difference between the two. President Obama is also quoted giving his assurance that the law isn't a tax.

However, their more fundamental argument, Clement says, is that the lawsuit is directed at the mandate and not the fine for those who don't comply. "Whether Congress enforces the mandate through a penalty, a tax, denial of federal benefits, or criminal consequences, the question concerning the constitutionality of the mandate remains the same," he said.

Of all the issues before the Court, this is the case for which the justices allotted the most time -- two hours for arguments. The Court under Chief Justice John Roberts has on occasion been willing to extend arguments beyond their scheduled time.

A transcript and audio recording will be posted on the Court's website, www.supremecourt.gov.

Click here for full coverage on the ObamaCare hearings.

Fox News' Shannon Bream contributed to this report.