Uwe E. Reinhardt: Awaiting the Supreme Court's Health-Care Ruling Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field. Anticipation has reached a fever pitch this week as the nation awaits the Supreme Court's decision on the fate of the Affordable Care Act of 2010. The core question before the court is whether the Commerce Clause in Article 1, Section 8, Clause 3 of the Constitution grants the federal government the authority to mandate individual Americans to purchase specified, minimally adequate health insurance coverage from private health insurers. For an economist, whose profession is routinely mocked with the adage "two economists, three opinions," the spectacle has been heartwarming. Evidently American legal theory is in even greater disarray than is economic theory. In this instance, the best legal minds in the nation cannot agree on what the Commerce Clause means. So we look to nine justices to tell us what they think the clause might mean. With legal theory in such disarray, ideological predilection among the justices may triumph. I recently posted a commentary on the options before the Supreme Court. Expanding upon that post a bit, I would describe the options before the Court thusly: The Affordable Care Act is upheld as constitutional in all of its provisions. Only the individual mandate is struck down, and it is deemed severable from the rest of the act. Title 1 (Insurance Reform) of the act is struck down, but the rest of the act is upheld. Both Titles 1 and 2 (Public Programs, including the expansion of Medicaid) are struck down, but the rest of the act is upheld. The entire Affordable Care Act is struck down, on the grounds that the clause covering the individual mandate, deemed by the justices to be not authorized by the Commerce Clause, is deemed not severable from the rest of the bill. Before the oral arguments at the court in March, the first option was widely given a good chance, especially among lawyers. The justices" many hostile questions on the mandate during oral arguments gave many observers second thoughts. If I had to bet, I would put my marker on the second option, the striking down of the individual mandate only. The majority of the justices may sincerely believe that the Commerce Clause does not authorize the mandate. In addition, some may not be averse to giving the president a little slap in the face. In any event, striking the mandate would not do much damage to the rest of the bill. That is because the penalties for disobeying the mandate now written into the statute are relatively low, which invites evasion by anyone whose premiums payable would exceed the penalty. Furthermore, it is easy to think of legislative fixes that could substitute for the mandate and, indeed, might even have more bite. The administration has argued that three important provisions in Title 1 of the act - community rating, guaranteed issue and guaranteed renewability - depend on the individual mandate for sound actuarial functioning of the act. To be "actuarially correct," so to speak, the court might therefore strike these three provisions of Title 1 as well, along with the individual mandate. The administration's reasoning has encouraged a number of the act's opponents to submit to the court an amici curiae brief recommending that the entire Title 1 be struck down, along with the mandate. Title 1 covers all the provisions for the reforms of the individual and small group market for health insurance, including the minimum medical loss ratios to be attained by insurers and the subsidies toward insurance premiums for low-income individuals not qualifying for Medicaid. The amici's argument is that without the individual mandate Congress would not have enacted the rest of Title 1. In other words, the amici ask the court to divine what Congress might or might not have done. It would require the justices to assume, inter alia, that Congress always acts rationally - a very tall assumption, indeed. I would be surprised if the justices were persuaded by the specious argument of these amici. Striking Title 1 would be a blow not only to millions of uninsured Americans whose health insurance coverage was to be subsidized by the federal government. It would also be a blow to the providers of health care who would lose a sizable net new revenue flow and would continue to be besieged by the millions of uninsured, should they fall ill. For the health insurance industry it would be a mixed blessing or blow. On the one hand, it would free the industry from a good number of new regulations. On the other, it would take away millions of potential new customers and, moreover, expose the industry to the highly negative publicity over medical underwriting and premiums based on the individual's health status. The justices" questioning during oral arguments suggests to me that they are not likely to strike down Title 2 of the act - Public Programs, including Medicaid expansion - should they strike down Title 1. The justices did not seem convinced that a deal offered the states by the federal government could be so generous as to be coercive and, thus, unconstitutional. Finally, the justices could defend repeal of the entire Affordable Care Act by the absence of a severability clause in the act, although it strikes me as even less likely than striking just Titles 1 and 2. That would not be a slap in the president's face, but a hefty whack with a two-by-four. Would the chief justice want this as part of his legacy? Furthermore, the rest of the bill contains numerous provisions for enhancing the quality of American health care and providing greater transparency on both quality and prices. In less partisan times, both parties have favored most of these measures. So, of course, have they favored the individual mandate in years past. It is fascinating, for example, to behold the list of co-sponsors of Senate bill S.1770 introduced in 1993 by the late Senator John H. Chafee, Republican of Rhode Island. That bill included the individual mandate. Among the co-sponsors was Senator Orrin Hatch, Republican of Utah, now a vocal opponent of the mandate. It would be instructive for the historical record to learn what epiphany caused this distinguished legislator, long a member and a former chairman of the Senate Judiciary Committee, to make a 180-degree turn on the mandate.