Reading the Kennedy tea leaves

It is no doubt true that during the Solicitor General's turn at the dais, Justice Kennedy asked a number of questions suggesting he was quite skeptical of the minimum coverage provision's constitutionality. Perhaps most tellingly, he commented that he thought the provision "changes the relationship between the Federal Government and the individual in a fundamental way," and thus requires "a heavy burden of justification."

But there were some glimmers of hope for the Government from Kennedy in the second half of the argument. Let me point out three specific exchanges, which will likely be analyzed and re-analyzed thousands of times between now and the end of June.

First, consider this question that Kennedy asked Paul Clement, at pp. 56-57 of the transcript:

Is the government's argument this--and maybe I won't state it accurately. It is true that the noninsured young adult is, in fact, an actuarial reality insofar as our allocation of health services, insofar as the way health insurance companies figure risks. That person who is sitting at home in his or her living room doing nothing is an actuarial reality that can and must be measured for health service purposes; is that their argument?

This hints at, perhaps, some sympathy with the notion that Congress must regulate this group--must force them into the insurance market--because their "actuarial reality" is necessarily having a substantial impact on interstate commerce, and in a market in which those people do generally participate--that for health care services.

Second, consider this exchange with Clement, on p.70 of the transcript:

MR. CLEMENT: And with respect to the health insurance market that's designed to have payment in the health care market, everybody is not in the market. And that's the premise of the statute, and that's the problem Congress is trying to solve. 

And if it tried to solve it through incentives, we wouldn't be here; but, it's trying to solve it in a way that nobody has ever tried to solve an economic problem before, which is saying, you know, it would be so much more efficient if you were just in this market-- 

JUSTICE KENNEDY: But they are in the market in the sense that they are creating a risk that the market must account for. 

MR. CLEMENT: Well, Justice Kennedy, I don't think that's right, certainly in any way that distinguishes this from any other context. . . . 

Again, Kennedy is here revealing at least some sympathy for the notion that the practice of not acquiring health insurance is having a very real and substantial impact on the health care market. This practice of "self-insuring," if you will, is ensuring the existence of uncompensated care, which has a very real and immediate impact on the current pricing of health insurance premiums (and the price of health care services).

Finally, consider this exchange with Michael Carvin on p. 104 of the transcript:

MR. CARVIN: It is clear that the failure to buy health insurance doesn't affect anyone. Defaulting on your payments to your health care provider does. Congress chose, for whatever reason, not to regulate the harmful activity of defaulting on your health care provider. They used the 20 percent or whoever among the uninsured as a leverage to regulate the 100 percent of the uninsured. 

JUSTICE KENNEDY: I agree--I agree that that's what's happening here. 

MR. CARVIN: Okay. 

JUSTICE KENNEDY: And the government tells us that's because the insurance market is unique. And in the next case, it'll say the next market is unique. But I think it is true that if most questions in life are matters of degree, in the insurance and health care world, both markets--stipulate two markets--the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries. 

That's my concern in the case. 

This is probably the most telling passage. It certainly does not indicate that Kennedy is convinced by the Government's argument for constitutionality. But Kennedy has at least expressed a "concern" with the challengers' position--not to mention an admission that this case is not black-and-white, falling into a clear and distinct categorical prohibition. A willingness to tolerate some gray is certainly to the Government's advantage.

Again, taking the argument as a whole, one has to be left with the impression that Kennedy was leaning against upholding the individual mandate. But he seemed at least a little bit torn.

Perhaps just a bit of solace for the federal government, on a day that otherwise seemed quite bleak.