Case for Market-Based Health Reform Challenged in Supreme Court Hearing

During the second day of arguments in the Supreme Court’s review of the Affordable Care Act (ACA), a number of Justices, along with a lawyer for the plaintiffs, pointed to a tax-funded, public health care system as a more solid alternative to the government’s market-based reform.

Justices Kennedy, Ginsberg and Sotomayor questioned why the government hadn’t used the “correct power” and simply raised taxes to establish a national health service or single payer system. Justice Roberts pointed to the government’s role in providing police, fire and 911 assistance, and asked why health care was treated differently. Defending the ACA, the Solicitor General, Mr. Verrrilli, resorted to defining health insurance as a market system, different from other public goods. In contrast, speaking for the plaintiff, Mr. Carvin agreed that setting up a tax-funded public health care system would have been acceptable.

Excerpts from the transcript of the Supreme Court hearing, March 27, 2012

CHIEF JUSTICE ROBERTS:  […] You don't know when you're going to need police assistance. You can't predict the extent to emergency response that you'll need. But when you do, and the government provides it. I thought that was an important part of your argument, that when you need health care, the government will make sure you get it. Well, when you need police assistance or fire assistance or ambulance assistance, the government is going to make sure to the best extent it can that you get it — get it.
GENRAL VERRILLI: I think the fundamental difference, Mr. Chief Justice, is that that's not an issue of market regulation. This is an issue of market regulation, and that's how Congress, that's how Congress looked at this problem. There is a market. Insurance is provided through the market system – …

[…]

JUSTICE KENNEDY: […] If the Congress has alternate means, let's assume it can 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 the 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. […]
GENERAL VERRILLI: […]  what Congress chose to do was to rely on market mechanisms and efficiency and a method that has more choice than would the traditional Medicare/Medicaid type model; and so it seems a little ironic to suggest that that counts against it.

[…]

JUSTICE GINSBURG:  […] So if Congress could see this as a problem when we need to have a group that will subsidize the ones who are going to get the benefits, it seems to me you are saying the only way that could be done is if the government does it itself; it can't involve the private market, it can't involve the private insurers. If it wants to do this, Social Security is its model. The government has to do — has to be government takeover. We can't have the insurance industry in it. […]

[…]

JUSTICE SOTOMAYOR: So the — I — I want to understand the choices you're saying Congress has. Congress can tax everybody and set up a public health care system.
MR. CARVIN: Yes.
JUSTICE SOTOMAYOR: That would be okay.
MR. CARVIN: Yes. Tax power is –
JUSTICE SOTOMAYOR: Okay.
MR. CARVIN: I would accept that.

See NESRI's blog on the Supreme Court and the ACA.