Alito begins, on page 8 line 23 of the transcript, while discussing :
You can correct me on these numbers if they're wrong...Don't worry, I will.
...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 $5,800 in 2016... The Respondents (that is, the 26 states suing to eliminate Obamacare) estimate that a young, healthy individual targeted by the mandate on average consumes $854 in health services each year. So the mandate is forcing these people to provide a huge subsidy...What a simplistic "analysis"! He simply takes these two dollar amounts and appears to conclude that the mandate would force the currently-uninsured to pay $5,000 into the system and get nothing in return. He fails to consider a number of factors, which causes one to doubt his ability to properly render judgment on the matter.
For starters, let's look at where the numbers come from. The $854 number is based on Appendix 22a of an amicus curiae brief (.pdf, page 67), which is based on an analysis of numbers from 2008. The $5,800 from the CBO analysis (.pdf, page 7) is a projection for 2016. Assuming a 5% rate of health care cost inflation, which I take from another CBO analysis (.pdf, page 5), that same care that in 2008 costs $854 would cost $1,262. So Alito should have definitely at least cited that number instead of $854, to compare apples to apples.
But underestimating the cost by more than 30% is far from the most significant error Alito makes. The 50% increase on one side of Alito's ledger assumes that the insured and uninsured people will consume identical amounts of health care. Having insurance will allow the citizen to have better access to care. These insured services will increase the value received for their $5,800.
By being able to more easily see a doctor, they will be generally healthier, allowing them to miss fewer work days, adding even more to the good side of the ledger, not to mention the more intrinsic value of not being sick as much. Paying for more preventive medicine now, the patient won't have to spend as much money later by having better control of their blood pressure, cholesterol, etc. By establishing a market where people of all ages pay the same rate, current young people also gain the benefit of having lower rates when they are older.
what is clear is that Alito's understanding of the facts of the case and the market involved is overly simplistic. He ignores multiple factors which affect the costs and benefits for those affected by the mandate. Since these costs and benefits were the main focus of his questions, one would have hoped he'd have put more thought into it.
It's getting late, so I'll finish my critique of Alito's position tomorrow.