Day two of arguments focused on whether Congress has the power to compel citizens – either through its ability to regulate interstate commerce or through its taxation power – to purchase or carry health insurance, known as the individual mandate. There clearly has been a bipartisan argument to be made for an individual mandate; NRF, among others, has admittedly made that argument in the past.
The Affordable Care Act’s (ACA) construct of guaranteed-issue coverage and strict rating bands require universal participation. To do otherwise would invite people to wait until they are sick to buy health care coverage. Think of someone buying fire insurance when their house is in flames.
NRF abandoned its support for the individual mandate when it became clear that it would catastrophically overburden many businesses and retailers, and hemorrhage jobs without reducing health care costs.
The beauty of our health care system – up until ACA’s passage – had been its voluntary nature.
Employers want to attract and retain top talent and often voluntarily offer health care coverage as part of the employee’s compensation. Employers who can’t offer coverage today are not “freeloaders” but are rather priced out of the market. The ACA’s mandates turned this system on its head in favor of interlocking obligations and tax penalties.
The question before the Court today was whether Congress could compel all individuals to purchase health coverage or to obtain subsidized coverage.
While it is really hard to take a definitive view based on oral arguments alone, the questions the Justices’ posed to the lawyers are fairly suggestive of the direction the Court is leaning. If that is the case, today was not a very good day for Obamacare.
Nevertheless, NRF would not encourage anyone to write the ACA’s obituary – at least not yet. Nor should retailers, restaurants, states or others stop their efforts to smooth future compliance with the law. It is still not clear whether all, some or none of the law will fall but ACA implementation is still chugging down the track. No prudent business should ignore the possibility that ACA will go forward as planned.
Tomorrow’s oral arguments before the Court – the third in three days – will focus on the issue of severability (whether various components of the law can be severed away from the law’s whole) and whether Congress can compel states to expand Medicaid eligibility.