JUSTICE ALITO: Do you think there is a market for burial services?
GENERAL VERRILLI: For burial services?
JUSTICE ALITO: Yes.
GENERAL VERRILLI: Yes, Justice Alito, I think there is.
JUSTICE ALITO: All right. Suppose that you and I walked around downtown Washington at lunch hour and we found a couple of healthy young people and we stopped them and we said: You know what you’re doing? You are financing your burial services right now because eventually you’re going to die, and somebody is going to have to pay for it, and if you don’t have burial insurance and you haven’t saved money for it, you’re going to shift the cost to somebody else.
Isn’t that a very artificial way of talking about what somebody is doing?
GENERAL VERRILLI: No –
JUSTICE ALITO: And if that’s true, why isn’t it equally artificial to say that somebody who is doing absolutely nothing about health care is financing health care services.
GENERAL VERRILLI: It’s — I think it’s completely different. The — and the reason is that the burial example is not — the difference is here you are regulating the method by which you are paying for something else — health care — and the insurance requirement I think — I mean, the key thing here is my friends on the other side acknowledge that it is within the authority of Congress under Article I under the commerce power to impose guaranteed-issue and community-rating reforms, to end — to impose a minimum coverage provision. Their argument is just that it has to occur at the point of sale, and –
JUSTICE ALITO: I don’t see the difference. You can get burial insurance. You can get health insurance. Most people are going to need health care, almost everybody. Everybody is going to be buried or cremated at some point.
GENERAL VERRILLI: Well, one big difference –
JUSTICE ALITO: What’s the difference?
GENERAL VERRILLI: One big difference, Justice Alito, is the — you don’t have the cost shifting to other market participants. Here –
JUSTICE ALITO: Sure you do, because if you don’t have money, then the State is going to pay for it or some –
GENERAL VERRILLI: But that’s different.
JUSTICE ALITO: A family member is going to pay for it.
GENERAL VERRILLI: That’s a difference, and it’s a significant difference. That in this situation, one of the economic effects Congress is addressing is that the — there — the many billions of dollars of uncompensated costs are transferred directly to other market participants. It’s transferred directly to other market participants because health care providers charge higher rates in order to cover the cost of uncompensated care, and insurance companies reflect those higher rates in higher premiums, which Congress found translates to a thousand dollars per family in additional health insurance costs.
JUSTICE ALITO: But isn’t that really a small part of what the mandate is doing? You can correct me if these figures are wrong, but it appears to me that the CBO has estimated that the average premium for a single insurance policy in the non-group market would be roughly $5,800 in — in 2016.
Respondents — the economists who have supported the Respondents estimate that a young, healthy individual targeted by the mandate on average consumes about $854 in health services each year. So the mandate is forcing these people to provide a huge subsidy to the insurance companies for other purposes that the Act wishes to serve, but isn’t — if those figures are right, isn’t it the case that what this mandate is really doing is not requiring the people who are subject to it to pay for the services that they are going to consume? It is requiring them to subsidize services that will be received by somebody else.
GENERAL VERRILLI: No, I think that — I do think that’s what the Respondents argue. It’s just not right. I think it — it really gets to a fundamental problem with their argument.