in my hypothetical. you don't know when you need police assistance. you can't predict the extent to emergency response that you'd need. but when you do, the government provides it. i thought that was an important part of your argument. when you need health care, the government will make sure you get it. when you need police assistance or fire assistance or ambulance assistance the government is going to make sure to the best extent it can that you get it. >> i think the fundamental difference mr. chief justice is that's not an issue of market regulation. this is an issue of mark regulation. that's how congress -- that's how congress looked at this problem. there is a market. insurance is provided through a market system. >> do you think there is a market for burial services? >> for burial services? >> yes. >> yes. >> suppose that you and i walked around downtown washington at lunch hour and we found a couple

of healthy young people and we said you know what you're doing you're financing your burial services right now. eventually you're going to die and somebody's going to have to pay for it. if you don't have burial insurance or you haven't saved money for it, you're going to shift the cost to somebody else. isn't that an artificial way of talking about what somebody is doing? if that's true, why isn't it equally argument official to say that somebody who's doing absolutely nothing about health care is financing health care services? >> 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. my friends acknowledge it is

under congress's power to -- and to impose a minimum coverage provision. their argument is just that it has to occur at the point of sale. >> i don't see the difference. you can get burial insurance, you can get health insurance. moat people need health care. everybody is going to be buried or cremated at some point. >> one big difference is you don't have the cost shifting to other market participants. >> sure you do. if you don't have money, then the state is going to pay for it or a family member. >> that's the difference. it's a significant difference that this -- in this situation one of the economic effects that congress is addressing is that the many billions of dollars of uncompensated costs are transferred directly to other market participants because health care providers charge higher rates to cover uncompensated rates and they're covered in higher premiums which

translates to $1,000 per family. >> isn't that a small part of what the mandate is doing? it appears to me that the cbo has estimate that had the average premium for a single insurance policy in the nongroup market will be roughly $5,800 in 2016. respondents the economists who supported the spobts 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. if those figures are right, isn't it is 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 would be received by somebody else? >> no. i do think what's what the respondents argue. it's just not right. i think it really gets to a fum problem. >> that's how insurance works. >> it is how insurance works. b, the problem that they're identifying is not that problem. the guaranteed issue and community reforms do not have the effect of forcing insurance companies to take on lots of additional people who they then can't afford to cover because they tend to be the sick and that is -- in fact, the exact opposite is what happens here. when guaranteed issue and rating reforms and you do so in the absence of a minimum coverage provision, it's not that insurance companies take on more and more people and they need a subsidy to cover it, it's that fewer and fewer people end up with insurance because the rates are not regulated. insurance companies when they

have to offer guaranteed issuing in community rating they're entitled to make a profit. they charge rates sufficient to cover only the sick population. >> could you help me with this. assume for the moment you may disagree. assume for the moment that this is unprecedented. this is a step beyond what our cases have allowed. a affirmative duty to go into commerce. if that is so, do you not have a heavy burden of justification. i understand that we must presume laws are constitutional. even though, when you are changing the relation of the individual to the government in this what we can stipulate is i think a unique way, do you not have a heavy burden of justification to show authorization under the constitution? >> so, two things about that, justice kennedy. first, we think this is regulation of people's participation in the health care

market. and all this minimum conch provision does is say that instead of requiring insurance at the point of sale, that congress has the authority under the commerce power and the necessary proper power to ensure that people have insurance in advance of the point of sale because of the unique nature of this market. because this is a market in which -- in which -- although most of the population is in the market most of the time 83% visit a physician every year. 96% over a five-year period. so virtually everybody in society is in this market. you've got to pay for the health care you get. the predominant way in which it's paid for is insurance. and the respondents agree that congress could require that you have insurance in order to get health care or forbid health care for being provided. >> why do you define the market

that broadly? health care. it may well be that everybody needs health care sooner or later, not everybody needs a heart trant plant. not everybody needs a liver trant plant. >> could you define the market everybody has to buy food. you define the market as food. therefore everybody's in the market. therefore you can make people buy broccoli. >> no. that is quite different. that is quite different. the food market while it shares that trait that everybody's in it, it is not a market in which your participation is often unpredictable and often unvoluntarily. it is not a market in which you don't know what you need before you go in. it is not a market in which if you go in and seek to obtain a product or service you will get it even if you -- >> is that a principal basis for distinguishing this from other situations?

you could also say the person subject to this has blue eyes. that would indeed distinguish it from other situations. it is a principal basis? it's a basis that explains why the government is doing this. but is it a basis which shows that this is not going beyond what the system of enumerated powers allows to government to do? >> yes. for two reasons. first, this is the test as this court has articulated is congress regulating economic activity with a substantial effect on interstate commerce. the way in which this statute satisfies the test son the basis of the factors that i have identified. >> i thought that your main point is that is unlike food or any other market when you make the choice not to buy insurance,

even though you have every intent to the world to self-insurance and save for it, when disaster strikes, you may not have the money. and the tangible result of it is we were told there was one brief that maryland hospital care bills 7% more because of these uncompensated costs that families pay $1,000 more than they would if there were no uncompensated costs. i thought what was unique about this is it's not my choice whether i want to buy a product to keep me healthy. but the costs that i'm forcing on other people if i don't buy the product sooner rather than later. >> that is definitely a difference that distinguished this market and justifies this as a -- >> if that is your difference, i'm somewhat uncertain about your answers to prex justice kennedy asked, can you under the

commerce clause, congress create commerce where previously none existed? i thought the answer to that was since mccull law versus maryland when which said that congress could prevent the bank of the united states, which jobs created commerce that did not previously exist. since that time the answer's been yes. i would have thought that your answer to can the government in fact require you to buy cell phones or buy burials that if we propose comparable situations, if we have for example, a uniform united states system of paying for every burial such as medicare burial, medicaid burial, chip burial, erisa burial. and emergency burial beside the side of the road and congress

wanted to rationalize that system, wouldn't the answer be yes? of course they could. the same with computer ors the same with the cell phones if you're driving by the side of the highway and there is a federal emergency service just as you say you have to buy certain mufflers for your car that don't hurt the environment, you could -- you see doesn't it depend on the situation? >> it does, justice breyer. if congress were to enact laws like that, we -- >> so then -- >> i would defend them on a rational like that. i do think we are advancing a narrower. >> then the question is whether or not there are any limits on the commerce clause. can you identify for us some limits on the commerce clause. >> yes. the rational under the commerce

clause would not justify forced purchases of commodities for the purpose of stimulating demand. it would not justify purchases of insurance for the purposes in situations in which insurance doesn't serve as the method of payment. >> why not? if congress says that the interstate commerce is affected isn't according to your view that the end of the analysis. >> no. the -- we think that in a -- when the difference between those situations and this situation is that in those situations, your honor, congress would be moving to create commerce. here congress is regulating existing commerce, economic activity that is already going on. people's participation in the health care market and is regulating to deal with existing effects. >> that seems to me it's a passage in your reply brief that i didn't quite grasp. it's the same point you say health insurance is not

purchased for its own sake like a car or broccoli. it is a mean os of financing health care consumption and covering universal risks. a car or broccoli aren't purchased for their own sake either. they're purchased for the sake of trps or broccoli covering the need for food. i don't understand that distinction. >> the difference mr. chief justice is health insurance is the means of payment for health care. >> that's a significant -- i'm sorry. >> broccoli is not the means of payment for anything else. >> it's the means of satisfying a basic human need just as insurance is the means of satisfying -- >> i do think that's the difference between existing commerce activity in the market already occurring, the people in the health care market purcha purchasing obtaining health care services and the creation of commerce and the principal that we're advocating here under the commerce clause does not take the step of justifying the creation of --

>> can we go back to, justice breyer asked a question and kind of interrupted your answer to my question. tell me if i'm wrong about this, but i thought a major, major point of your argument was that the people who don't participate in this market are making it much more expensive for the people who do. that is, they will get a good number of them will get services that they can't afford at the point when they need them. and the result is that everybody else's premiums get raised. it's not just your free choice. what you do is going to affect others. affect them in a major way. >> that absolutely is a justification for congress's action here. that is existing economic activity that congress is

regulating -- >> you could say that about buying a car. if people don't buy cars, the price that those who do buy cars pay will have to be higher. so you could say in order to bring the price down, you're hurting these other people by not buying a car. >> that is not what we're seeing. >> that's not what you're saying? >> i thought it was. you were saying other people are going to pay more for insurance because you're not buying it. >> no, it's because you're going in the health care market you're going into the market without the ability to pay for what you get, getting the health care service anyway as a result of the social norms that allow -- that to which we've on littled ourselves. >> don't obligate yourself to that. you can do it, but does that expand your ability to issue mandates to the people? >> this is not a purchase

mandate. this is a law that regulates the method of paying for a service that a class of people to whom it applies are inevitably consuming. >> general, i see or have seen three strands of arguments in your briefs. echoed today. the first strand that i've seen is that congress can pass any necessary laws to effect those powers within its rights. ie because it made a decision that to affect -- to affect mandatory issuance of insurance that it could also obligate the mandatory purchase of it. the second strand i see is self-insurance affects the market. and so the government can

regulate those who self-insure. the third argument, see all of them as different is that what the government is doing -- i think it's the argument you're making today that what the government is saying is if you pay for -- if you use health services you have to pay with insurance. because only insurance will guarantee that whatever need for health care that you have will be covered. because virtually no one, perhaps with the exception of 1% of the population can afford the massive costs if the unexpected happens. this third argument seems to be saying what we're regulating is health care. and when you go or have services you have to pay for insurance.

and since insurance won't issue at the moment that you consume the product, we can reasonably, necessarily, tell you to buy it ahead of time. because you can't buy it at the moment that you need it. is that -- which of these three is your argument? are all of them your argument? i'm not sure. >> let me try to state it this way. the congress enacted reforms of the insurance market. guaranteed issuing community rating reforms. it did so to deal with a very serious problem that results in 40 million people not being able to get insurance and therefore not access to the health care market. everybody agrees in this case that those are within congress's article one powers. the minimum coverage provision is necessary to carry those provisions into execution because without them, without those provisions -- without

minimum coverage guaranteeing issuing community rating will make matters worse not better. there will be fewer people covered. it will cost more. >> so on that ground, you're answering affirmatively to my colleagues that have asked you the question, can the government force you into commerce? there's no limit to that power? >> no. that's the first part of our argument. the second part of our argument is that the means here that congress has chosen, the minimum coverage provision is a means that regulates the -- that regulates economic activity, namely your transaction in the health care market with substantial effects on interstate commerce. it is the conjunction of those two that we think provides the particularly secure foundation for this statute under the commerce power. >> we've talked a couple of times about the other alternatives that congress might have had. other alternatives that the respondents suggest to deal with

this problem. in particular the alternative of mandate and insurance at the point at which somebody goes a an emergency room and asks for care. did congress consider those alternatives? why did it reject them? how should we think about the question of alternative ways of dealing with these problems? >> i do think, justice kagan, that the point of difference between my friends on the other side in the united states and about one of timing. they've agleed congress has article 1 authority to impose insurance requirement or other penalty at the point of sale and they've agreed that congress has the authority to do that to achieve the same objectives the minimum coverage of the min ma'am afford act is designed to achieve. this is a situation in which we are talking about means. congress gets substantial deference in the choice of means and if one thinks about the difference the means they say congress should have chosen it's aened means congress did choose i think can you see why it was eminently more sensitive tore

congress to choose it's means that it chose. >> i'm not sure which way it cuts, if the congress has ultimate means. the national health service. how does that factor into our analysis? in one sense it can be argued this is what the government is doing and ought to be honest about using the correct power. on the other hand, since the court can do it any way, i'm not sure which way the argument moves? >> let me try to answer that and get back to the question you asked me early per's earlier. i do think one striking feature of the argument here that this is a novel exercise of power is that what congress chose to do was to rely on market mechanisms and efficiencies and a method that has more choice than would the traditional medicare or medicaid-type model.

seems a little ironic to suggest that that counts against it, but beyond that, in the sense that it's novel, this provision is novel in the same way, or unpresidentsed in the same way the sherman act was unprecedented when the court upheld in the northern securities case or the packers and stockyards act was upunprecedented or the national labor relation act when the was upheld or the dairy price supports and right with dairy -- >> no, it's not. all involved commerce. there was no doubt what was regulated was commerce and here you're regulating somebody who isn't commerce. by the way, i don't agree with you that the relevant market here is health care. you're not regulating health care. you're regulating insurance. it's the insurance market that you're addressing and you're saying that some people who are not in it must be in it. and that's -- that's different from regulating in any manner.

commerce that already exists out there. >> to the extent we're looking at the comprehensive scheme, justice scalia it is regulating commerce that already exists out there and the means in which that regulation is made effective here, the minimum coverage provision, is a regulation of the way in which people participate a method of their payment in the health care market. that is what it is. and i do think, justice kennedy, getting back to the question you asked before, what matters here is whether congress is choosing a tool that's reasonably adapted to the problem that congress is confronting. and that is different from the way has chose ton use in the past. not something that counts against the provision in a commerce law. that's -- >> it's both necessary and proper, what you just said addresses what's necessary. yes. has to be adapt the. necessary does not mean essential. just reasonably adapted.

in addition to being necessary it has to be proper. and we've held in two cases that something that is reasonably adapted was not proper, because it violated the sovereignty of the states. which was implicit in the constitutional structure. the argument here is that this also is maybe necessary, but it's not proper, because it violates and equally evident principle in the constitution, which is that the federal government is not supposed to be a government that has all powers. that is supposed to be a government of limited powers and that's what all this questioning has been about. what is left? if the government can do this, what else can it not do? >> look, this does not violate the norm of proper, as this court articulated in prints or in new york, because it does not interfere with the state's as sauverrens. this is a regulation -- >> no. that wasn't my point. that is not the only

constitutional principle that exists. >> but -- >> an equal li evident constitutional principle is the principle that the federal government is a government of enumerated powers and that the vast majority of powers remain in the states and do not belong to the federal government. do you acknowledge that that's -- >> of course we do, your honor. that's why we're talking about it. >> and the way in which this court and its cases has policed the boundary, that what's national sphere and what's in the local sphere, ask whether congress is regulating economic activity with an effect on interstate commerce. here it's really impossible in view of our history to say congress is invading the states sphere. this is a market in which 50% get their health care through their employer. it's 2ds 50 billion a year makes it much more affordable.

orissa and hipaa regulate that to ensure the kinds of bans on pre-existing condition discrimination and pricing practices that occur in the individual market don't occur. >> i don't understand your point. whatever the states have chosen not to do the federal government can do? >> no. not at all. >> the tenth amendment says the powers not given to the federal government are reserved not just to the states but to the states and the people. and the argument here is that the people were left to decide whether they want to buy insurance or not. >> but -- but, your honor, what the court has said and it would be a sub stshl departure from what the court has said, when congress is regulating economic activity with a substantial effect to interstate kmcommerce that will be upheld nap is what's going on here. to embark, i submit with all due respect to embark on the analysis my friends on the other side suggest court ought to embark is on is to import loughner style due process --

>> excuse me. >> the key in loughner is that we were talking about regulation of the states. right? and the states are not limited to enumerated powers. the federal government is. and seems to me it's an entirely different question when you ask yourselves whether or not there are going to be limits on the federal power as opposed to on the states which was the issue in loughner. >> i agree, except, mr. chief justice, what the court has said, as i read the court's cases, is that the way in which you ensure that the federal government stays in its sphere and the sphere reserved to the states is protected is by policing the boundary. is the national government regulating economic activity with substantial effect on interstate commerce? >> but the reason this is concerning is because it requires the individual to do an affirmative act in the law of torts, our tradition, our law has been that you don't have the duty to rescue someone if that

person's in danger. the blind man's walking in front of a car, you do not have a duty to stop him. absence some relation between you. and there's a severe moral criticism of that rule bu that's generally the rule. and here the government is saying that the frost government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous statements. that changes the relationship of the federal government to the individual in a very fundamental way. >> i don't think so, justice kennedy, because it is predicated on the participation of these individuals in the market for health care services. now it happens to be that this is a market in which aside from the groups that the statute excludes virtually everybody participates, but it is a regulation of their participation in that market. >> well, but it's critical how you define the market. if i understand the law, the policies you're requiring equal to purchase involve, must

contain provision for maternity and newborn care, pediatric services, and substance use treatment. it seems to me you cannot say that everybody is going to need substance use of treatment, substance use treatment, or pediatric services and yet that is part of what you require them to purchase. >> well, it's part of what the statute requires the insurers to offer and i think the reason is because it's trying to define minimum essential coverage, because -- >> yeah, but your theory is there is a market in which everyone participates, because everybody might need a certain range of health care services. and yet the -- the -- you're requiring people who are never going to need pediatric or maternity services to participate in that market. >> the -- with respect to what insurance has to cover, your honor, i think congress is entitled with lat nude making the judgments of what the appropriate scope of coverage is and the