Justice Roberts' opinion on the Commerce Clause in NBIF v. Sebelius contains two parts:
1) Congress cannot use the Commerce Clause to compel individual citizens to enter commerce in order to regulate that commerce. His review of precedent, including landmark cases expanding the scope & power of the Commerce Clause such as Wickard v. Filburn, Roberts finds that in all cases Congress had sought to regulate already-existing economic activity. He asserts that allowing Congress to compel economic activity would remove virtually all limits from the Commerce Clause, enabling Congress to reach individual citizens with an authority indistinguishable from the Police Power, which is properly reserved to the states.
2) He finds that the individual mandate, construed as a mandate (i.e., an exercise in police power) would compel uninsured individuals to enter into commerce as above, and become active in a market which they had elected to avoid. Therefore, as an expansive application of Commerce Clause power beyond any precedent or articulable limit, the the government & Congress's contention that the individual mandate holds up under that clause is rejected.
But how did the Chief Justice reach this conclusion? I.e. his assertion that uninsured people are not currently active in commerce, and that requiring them to purchase a health insurance policy is tantamount to compelling them to "enter commerce"? He doesn't say. Indeed he notes in his opinion that the government vehemently disagrees, and believes uninsured individuals are in fact active participants in the commerce in health insurance:
The Government repeats the phrase “active in the market for health care” throughout its brief, see id., at 7, 18, 34, 50, but that concept has no constitutional significance. An individual who bought a car two years ago and may buy another in the future is not “active in the car market” in any pertinent sense. The phrase “active in the market” cannot obscure the fact that most of those regulated by the individual mandate are not currently engaged in any commercial activity involving health care, and that fact is fatal to the Government’s effort to “regulate the uninsured as a class.”
Everyone will likely participate in the markets for food, clothing, transportation, shelter, or energy; that does not authorize Congress to direct them to purchase particular products in those or other markets today. The Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions. Any police power to regulate individuals as such, as opposed to their activities, remains vested in the States.
But wait, wait, wait. Hold on a minute. How, exactly, did we arrive at this "fact" that most of those reached by the individual mandate are "not currently engaged in any commercial activity involving health care"? How is a lower court, attempting to apply this dicta-on-steroids to a Commerce Clause challenge, supposed to make a determination between two parties, one of whom says there is commercial activity, and one of whom says there isn't?
The closest he comes to defining a rule or test for determining whether a law is regulating commerce or creating commerce is when he offers a kind of "proximity test."
The Government says that health insurance and health care financing are “inherently integrated.” Brief for United States 41. But that does not mean the compelled purchase of the first is properly regarded as a regulation of the second. No matter how “inherently integrated” health insurance and health care consumption may be, they are not the same thing: They involve different transactions, entered into at different times, with different providers. And for most of those targeted by the mandate, significant health care needs will be years, or even decades, away. The proximity and degree of connection between the mandate and the subsequent commercial activity is too lacking to justify an exception of the sort urged by the Government.
The government contended that uninsured individuals are "active" in commerce...because they are currently covered under other people's insurance. Uninsured individuals have "coverage," even though they don't pay for it. In the government's position, it doesn't matter when or if they ever need to receive health care, they are currently beneficiaries of health insurance coverage.
Roberts entirely rejects that view, but instead of saying why, he sloppily conflates the concept of insurance coverage with the act of seeking health care. All he says is that Congress can't make people pay for coverage today...because they aren't actively seeking health care today. He doesn't explain why "coverage" doesn't count as an active form of commerce, and offers no guidance to future courts on how to distinguish active from inactive commerce.
What this means is that, binding or not, Roberts' opinion is going to be useless as tits on a kite the next time two parties come before a court, one of whom saying so-and-so class of people are active in commerce, the other saying no they ain't.
Worse, his "proximity test" undermines the logic of all insurance. Can Congress not regulate the payment of insurance premiums in order to have an effect on insurance claims? Or can Congress not regulate how insurance claims are paid in order to control premiums, since these two transactions are years, or even decades apart? Can Congress not regulate health care providers in order to affect insurance premiums, or vice versa? How exactly does a court decide whether or not two related financial exchanges separated by time, place, or kind are "too improximate" to survive this new Commerce Clause challenge? The proximity test is useless, and probably dangerous to every other form of insurance regulation you can imagine.
INSURANCE FOR DUMMIES (AND THE SUPREME COURT): A SIMPLE PRIMER
Since the conservatives on the Supreme Court, in the judiciary, the amici curiae like Randy Barnett, and even SG Verrilli and some of the liberal members of the court seem to have trouble understanding how a person who is covered under someone else's insurance is "actively" involved in the commerce of insurance, a little refresher course is in order. Hopefully when this comes up again (as invariably it must given such a terribly-written opinion), this little reminder of basic common sense will somehow squeeze itself out into the wider discourse and guide judges towards wiser decisions.
What is insurance?
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.
In the most abstract terms, an insurance policy consists of a fund collecting premiums contributed by policyholders. In exchange for premiums, policyholders receive coverage in the form of payments from the fund in the event of a loss.
In essence, insurance is therefore the distribution of loss. All policyholders experience a small, predictable loss (payment of premiums), and then those "losses" are turned around and used to cover the few policyholders who experience large, unpredictable losses. Those policyholders become beneficiaries, and this legally binding right to become a beneficiary is what is meant by "coverage." This can also be thought of as the distribution of risk. The important point is that the lucky many among the policyholders subsidize the unfortunate few who experience drastic losses.
Now let's compare this abstract picture to the US healthcare market.
The "fund" in healthcare is actually composed of many different funds...private insurers, Medicare, the VA, various state & city pension & health systems, self-insured individuals, etc. etc. But the important thing to note is that they are all fungible...healthcare resources are available to all US residents (and tourists) at all times and regardless of locale, and those resources are funded indiscriminately by all of the aforementioned sources. The US healthcare system therefore, in a direct and measurable way, draws its resources from a single insurance "fund."
Now, who receives coverage from the US healthcare fund? Who is eligible to become a beneficiary at any given time of day, wherever they happen to be in the country? Everyone! Every man, woman and child in this country is legally and by long practice entitled to lifesaving, perhaps catastrophically expensive health care 24/7/365. This is why SG Verrilli kept insisting that the uninsured are nonetheless "active" in the health insurance market. They may not be paying into the fund, but they're damn sure beneficiaries of the coverage it offers!
Are other forms of insurance like this? Meaning, do other forms of insurance routinely offer coverage to people who are not also policyholders with their premiums paid in full? No! This is a highly unique situation that has evolved in the US over many years, but it is a central fact that is utterly and inexplicably ignored by the conservative justices, but the uninsured are not only regular consumers of health care, they are also, every last one of them, beneficiaries of health insurance. Today. Right now. Not at some unguessable remove years or decades hence. At this moment, 40 million people are covered by US health insurance without paying a dime in premiums.
What does this have to do with broccoli? Nothing! Broccoli isn't paid for via insurance. The sudden need to eat broccoli isn't a "contingent, uncertain loss." If you need broccoli, you buy it. If you buy broccoli, the cost of said broccoli is fairly predictable. If broccoli sometimes cost $3.99 a pound, and sometimes cost $39,999.00 a pound, with no way to predict on a given day what the price tag might read, then people might start forming insurance groups in order to distribute the risk of a broccoli price armageddon. And finally, if it became a widespread problem where millions of people were enjoying insanely high-cost broccoli but skipping out on premiums, implying that there were more people active in "broccoli insurance" than could be bothered to buy policies, then and only then would we be approaching a valid analogy to healthcare. And yes, in that bizarre case of high-risk, utterly necessary, insurance-funded broccoli then yes, Congress could compel the beneficiaries to pay for their coverage.