A jagged line running north-south through the map of Virginia separates the state's Eastern and Western federal judicial districts. As 2010 wound down, that boundary came to symbolize a deep philosophical split over whether an activist, ambitious government is good or bad.
At stake is the 2010 act that extends health insurance for the first time to almost all Americans, rich and poor alike. On Nov. 30 a federal district judge in the Western District who was appointed by President Bill Clinton, Norman K. Moon, supported the Obama Administration by upholding the constitutionality of the act. On Dec. 13, scanning the same facts in a different case, Judge Henry E. Hudson of the Eastern District, who was appointed by President George W. Bush, ruled the Patient Protection and Affordable Care Act unconstitutional. Hudson said its requirement that people must buy health insurance if they can afford it was an "unchecked expansion" of congressional authority that "would invite unbridled exercise of federal police powers."
Hudson's strong language has the flavor of the Supreme Court decisions of the 1930s, when the high court frustrated President Franklin D. Roosevelt by nixing key elements of the New Deal. For the Obama Administration, the risk is that the Supreme Court, already moving rightward under conservative Chief Justice John G. Roberts, will see things Hudson's way when the case he heard, or a similar one, reaches the high court on appeal. If the Roberts Court seizes on this case to lay down a sweeping precedent limiting congressional power, it will be a blow not only to universal health care but also to a wide range of other government initiatives.
Can the Obama Administration save the health-care act? Yes, but not by relying solely on familiar legal arguments.
In Sebelius v. Virginia, the case that came before Hudson, the government contended that Congress can impose an insurance mandate under 1) its constitutional authority to regulate interstate commerce, and 2) its power to pass any law "necessary and proper" to carry out its enumerated powers. That didn't impress Hudson, and there's no certainty that it will sway Justice Anthony M. Kennedy, the Supreme Court's swing voter in many close decisions. In 1995, Kennedy concurred with the majority in United States v. Lopez, a guns-in-schools case in which the high court for the first time since the New Deal put limits on Congress's application of the Constitution's commerce clause.
To win the legal battle—as well as the battle for public opinion—the Obama Administration must address directly the qualms about overreaching that Hudson expressed in his opinion. The way to do that is to make a persuasive case that mandatory coverage is not the first step on a slippery slope to totalitarianism.
The best case against the slippery slope argument isn't even a legal one. It's in an amicus curiae brief filed in November in a broader Florida case by 41 top economists, including three Nobel laureates, Kenneth Arrow of Stanford, Eric Maskin of Princeton, and George Akerlof of Berkeley. They argue that health care has unique characteristics that justify the congressional mandate—and since other markets such as food and housing don't have those characteristics, Congress will never have any justification to intervene in them to the same degree.
The economists' argument bears attention. Arrow, 90 years old, has been probing the peculiarities of the health sector since 1963, when he wrote a much-cited paper, "Uncertainty and the Welfare Economics of Medical Care," that's mentioned in the brief. Arrow and the other economists say—in agreement with the Obama Administration—that a health insurance system that must accept all comers but can't require everyone to join will quickly enter a death spiral. Healthy people won't opt in until they need coverage, so many or most of the insured will be sick and costly. As a result, insurers will have to raise rates, pushing the last few healthy customers out, forcing rates on the rest to go even higher, and so on until it leads to collapse. Amitabh Chandra, an economist at Harvard University's John F. Kennedy School of Government who joined the amicus brief, writes in an e-mail: "We don't let people buy car insurance after they've wrecked their cars, or after we find their house is on fire. For the same reason, the individual mandate is absolutely key."
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