'Individual Mandate' Should Hold Up, Prof Argues


The provision in the healthcare reform law that requires individuals to purchase health insurance is constitutional under the "Commerce Clause" because of the objectives it achieves, a health policy expert claims.

"The fundamental goal of the Affordable Care Act is no less than the preservation of the U.S. healthcare system," Sara Rosenbaum, JD, of the department of health policy at George Washington University, in Washington, wrote online in the New England Journal of Medicine.

"In a country that depends on health insurance to finance care, preservation cannot happen without a comprehensive regulatory scheme that reaches from coast to coast and sets the minimum rules of market entry and operation for health insurers. The glide path to this new system is long and complex, but the law's end point is clear and visionary, and its constitutionality -- at least in this first round -- is incontrovertible."

The "first round" Rosenbaum referred to was a decision by a federal district court judge in Michigan, George Caram Steeh, who ruled earlier this month that he would not grant an injunction to prevent the individual mandate portion of the Affordable Care Act (ACA) from being implemented in 2014.

Rosenbaum did note that a federal judge in Florida did allow part of a similar lawsuit -- which also questioned the constitutionality of the individual mandate -- to proceed.

Steeh's ruling rests on the issue of what is permissible under the Commerce Clause -- Article I, Section 8, Clause 3 -- of the Constitution, which grants to Congress the power to "regulate commerce with foreign nations, and among the several states."

Rosenbaum noted that according to "a wealth of U.S. Supreme Court precedent," whether Congress has the power to regulate a particular individual activity (like buying health insurance) under the Commerce Clause depends on whether the activity is an integral part of a bigger law that, in turn, regulates interstate commerce.

The ruling, Rosenbaum wrote, addresses both issues. First, Steeh ruled that "economic decisions as to how to pay for healthcare services have direct and substantial impact on the interstate healthcare market."

Second, Rosenbaum wrote, Steeh agreed that the "minimum coverage provision is essential to the Act's larger regulation of the interstate business of health insurance."

"Both of these elements are essential," Rosenbaum argued. "If there is no individual activity that directly and substantially affects interstate commerce, Congress cannot act. And if there is no broader statutory scheme regulating interstate commerce, then the federal law will fail the constitutional test, as other laws have done."

The ACA addresses two large problems with the U.S. healthcare system, Rosenbaum continued. The first is that millions of Americans are uninsured, and the second is that the healthcare costs for those uninsured are shifted to "millions of other Americans who have chosen to be insured and are fortunate enough to be able to obtain coverage."

The act is a constitutional intervention into the market, wrote Rosenbaum, because of the five objectives it achieves:

  • Transforming insurance into a public accommodation
  • Establishing minimum national standards for the design of health insurance plans
  • Creating a nationwide system of health insurance exchanges serving the individual and small-group markets, and giving states the option to expand their exchanges to reach larger groups
  • Establishing a uniform national subsidy system that insures Medicaid coverage for the poorest Americans and tax subsidies toward health insurance premiums for those low-income Americans who are not Medicaid-eligible
  • Using uniform, stable financing to make changes to the healthcare system, such as encouraging the growth of primary care.

Rosenbaum added that "as Judge Steeh noted, the healthcare market is unlike any other market, because there is no way that 'living breathing beings' can opt out of it. Everyone needs healthcare at some point, and thus all of us are market purchasers, however reluctantly. How individuals buy healthcare is fundamentally a matter that affects the healthcare system nationwide."


Rosenbaum declared that she had no conflicts of interest to disclose.