Employer Mandate Under Fire

"As both the Congressional Research Service and the Congressional Budget Office have observed, the PPACA is entirely without precedent insofar as it mandates individuals to enter a stream of commerce," Severino said. "The fact that, over the course of two centuries, Congress never used this purported power to compel purchases, suggests that Congress never has understood itself to have this power in the first place."

"Even under the Supreme Court's broadest reading of the Commerce Clause, no law and no case has yet attempted to compel individuals to enter a market under the guise of 'regulating' that market," Severino said.

And, in citing concerns also voiced by Justice Anthony Kennedy during oral arguments on the case Monday, Severino said that another problem with the administration's interpretation of the Commerce Clause is that it lacks any limiting principle.

"The Supreme Court's Commerce Clause jurisprudence has emphasized that government's power must have a stopping point to be constitutional, precisely because the court recognizes the structural limits on our government as the preeminent constitutional guarantee of individual liberty."

In his testimony, Steven G. Bradbury, a partner at Dechert LLP, argues that the real reason the individual mandate was enacted was not to stop cost-shifting, "but to compel millions of Americans to pay more for health insurance than they receive in benefits in order to subsidize both the voluntarily insured and the insurers, and thereby to mitigate the steep rise in insurance premiums that would otherwise be caused by the law itself." 

"The data belie the government's claim that the individual mandate is constitutional on the ground that it regulates economic conduct with a substantial effect on interstate commerce,"  Bradbury said.

Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute for Policy Research, New York, asked, "Could it be that the $2,000 per worker penalty in the new health care law, effective 2014 and levied on employers who do not provide the right kind of health insurance, is discouraging hiring?"

She testified that the law will raise the cost of employment when fully implemented in 2014.

"Companies with 50 or more workers will be required to offer a generous health insurance package, with no lifetime caps and no copayments for routine visits, or pay an annual penalty of $2,000 for each full-time worker," she testified.

"This penalty raises significantly the cost of employing full-time workers, especially low-skill workers, because the penalty is a higher proportion of their compensation than for high-skill workers, and employers cannot take the penalty out of employee compensation packages," she said.