Argument: The mandate is not constitutional under the commerce clause

Many attorneys general have fought constitutionality of mandates. Since the passage of the legislation in March of 2010, many state governments, governors, and attorney generals have pressed forward with lawsuits centred on the idea that the individual mandate in the legislation is unconstitutional.(7) Underlying these legal challenges is a debate about the basis of the national Congress’s lawmaking powers. In order for laws passed by Congress to be considered legitimate and enforceable, those laws must be based on a power conferred on congress by the Constitution. On those areas of law and public life where the Constitution is silent, legislative power rests not in the hands of Congress, but rather is “reserved to the States respectively, or to the people.”(9)

It has been argued that the individual healthcare mandate is authorised by the Constitution's empowerment of Congress to “regulate interstate commerce” (known as the “commerce clause”), however this is not true and the commerce clause does not authorize health insurance mandates. As the Congressional Research Service has written: "Despite the breadth of powers that have been exercised under the Commerce Clause, it is unclear whether the clause would provide a solid constitutional foundation for legislation containing a requirement to have health insurance. Whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or a service.”(2) The most obvious reason for this is that an omission to buy health insurance can in no way be termed 'interstate commerce', as there is no activity or commerce going on. This is not in keeping with the commerce clause, unlike other previous federal healthcare laws.

There is no doubt that Congress can regulate an entire array of economic activities, large and small, inter- and intra-state. Thus, for example, there is no problem, Constitution-wise with having Congress regulate health care insurance purchase transactions. The problem with an individual insurance purchase mandate, however, is that it does not regulate any transactions at all; it regulates human beings, simply because they exist, and orders them to engage in certain types of economic transactions.(8)

While most health care insurers and health care providers may engage in interstate commerce and may be regulated accordingly under the Commerce Clause, it is a different matter to find a basis for imposing Commerce Clause related regulation on an individual citizen who chooses not to undertake a commercial transaction. The decision not to engage in affirmative conduct is arguably distinguishable from cases in which Commerce Clause regulatory authority was recognized over intra-state activity: growing wheat, for example, (Wickard v. Filmore) or, more recently, growing marijuana (Gonzales v. Raich).(6)

If Congress were to invoke its Commerce Clause authority to support legislation mandating individual health insurance coverage, such an action would have to contend with recent Supreme Court precedent limiting unfettered use of Commerce Clause authority to police individual behaviour that does not constitute interstate commerce: United States v. Lopez, invalidating the application of the Gun Free School Zones Act of 1990 to individuals, and United States v. Morrison, invalidating certain portions of the Violence Against Women Act.

In the case of a mandate to purchase health insurance or face a tax or penalty, Congress would have to explain how not doing something – not buying insurance and not seeking health care services – implicated interstate commerce.(6) Therefore, it is clear that Congress is not empowered to regulate the choice not to buy healthcare, as it lacks constitutional authorisation to interfere in this aspect of individual Americans’ private lives.

Candidate 1: "A refusal to purchase healthcare insurance can have an effect on interstate commerce, because in shrinking the risk pool of insured the premiums would incrementally rise. In 2007, healthcare expenditures amounted to $2.2 trillion, or $7,421 a person, and accounted for 16.2% of the gross domestic product. These statistics leave no doubt that regulating health insurance is synonymous with regulating interstate commerce.(10)

Not engaging in economic transactions is a form of commercial behaviour that Congress can regulate. The Supreme Court held that Congress could require that hotels and restaurants provide services to African-Americans. Their refusal to engage in commerce still was deemed to be within the scope of Congress's commerce clause power.(10)

The likelihood is that everyone will require medical care at some point. An uninsured person in a car accident will be taken to the emergency room for treatment. An uninsured person with a communicable disease will be treated; indeed, it is necessary for the health and welfare of the general population to provide treatment to individuals suffering from infectious diseases. Congress can ensure that there is an adequate fund to pay for everyone's medical needs."
Candidate 2: "The mandate is constitutional under the commerce clause

Congress has ample power and precedent through the Constitution’s “Commerce Clause” to regulate just about any aspect of the national economy.

Health insurance is quintessentially an economic good. The only possible objection is that mandating its purchase is not the same as “regulating” its purchase, but a mandate is just a stronger form of regulation. Where a Congressional power exists, nothing in law says that ”strong” and potentially more intrusive forms of action are less supported than weaker ones.(11)

Critics of an individual mandate cite recent Supreme Court cases in which the Court has limited the commerce clause’s power. However, those cases (Lopez and Morrison) involved regulation of non-economic activity. The individual mandate regulates the relationship between sellers and buyers of health care insurance. Moreover, the Court was concerned in Lopez and Morrison with efforts by Congress to intrude into areas that are properly regulated by state governments and thereby to upset the balance of power between the federal and state governments. By contrast, congressional regulation of the health care industry does not violate state prerogatives.

To be sure, much regulation of insurance occurs at the state level, but that is because Congress has chosen by statute to defer to state regulation. The Constitution does not prevent Congress from revoking its statutory grants to state governments.(12) Those who argue that this is unconstitutional maintain that those not purchasing health insurance, by definition, are not part of interstate commerce. There are numerous flaws with this argument.

First, Congress can regulate activities that themselves are not part of interstate commerce if they have a substantial effect on interstate commerce. For example, in Wickard v. Filburn, the Supreme Court held that Congress could regulate wheat that farmers grew for their own home consumption. More recently in Gonzales v. Raich, the Court ruled that Congress could prohibit cultivating and possessing small amounts of marijuana for personal medicinal use. Even though the individuals were not personally engaged in commerce, the matter still fit within the commerce power.(10)

Second, the decision to abstain from particular economic transactions is a form of commercial behaviour that Congress can regulate. The Supreme Court held that Congress could require that hotels and restaurants provide services to African-Americans. Their refusal to engage in commerce still was deemed to be within the scope of Congress's commerce clause power.(10) This is made more significant by the fact that the decision to remain uninsured can affect commerce- both within and between states- by raising health insurance premiums. This is because insurance premiums tend to rise in response to reductions in the size of the pool of individuals to whom financial risk can be distributed.(14)

Citizens who forego health insurance are forcing other Americans to cover their costs if they are sent to hospital for emergency treatment. They are also forcing others to pay higher insurance rates, now that insurance companies can no longer legally exclude those with pre-existing conditions.(15)

Third, the likelihood is that everyone will require medical care at some point. An uninsured person in a car accident will be taken to the emergency room for treatment. An uninsured person with a communicable disease will be treated. Congress can ensure that there is an adequate fund to pay for everyone's medical needs. In other words, the health care system is part of interstate commerce. Providing care for all unquestionably has a substantial economic effect. Congress, then, can use its authority under the necessary and proper clause to make sure that the system that it is creating is viable and capable of providing health care for all.(10)

Therefore the individual healthcare mandate is constitutional because it is authorized under the commerce clause of the constitution."
Candidate 3: "The healthcare insurance can be unprecedented but still be constitutional as Erwin Chemerinsky argues: “Anything that has never been done before is literally unprecedented, which means it lacks any precedent. So the question is, will the Supreme Court want to authorize this new extension of congressional power in light of the fact that it violates the first principles it affirmed in Lopez and Morrison? Or, to the contrary, will it want to take the opportunity reaffirm that these principles still apply, notwithstanding Raich, in a case with no further implications beyond the statute in question?”(10)

Regarding the argument that the healthcare mandate will allow Congress to regulate everything and everyone, such hyperbole and apocalyptic predictions are familiar in this area. In 1918, in Hammer v. Dagenhart, the Supreme Court declared unconstitutional a federal law that prohibited the shipment in interstate commerce of goods made by child labour. The Court concluded its opinion by declaring: "[I]f Congress can thus regulate matters entrusted to local authority by prohibition of the movement of commodities in interstate commerce, all freedom of commerce will be at an end, and the power of the states over local matters may be eliminated, and thus our system of government practically destroyed." For more than 70 years Congress has prohibited child labour and none of these dire predictions have come to pass. Nor would allowing Congress to mandate the purchase of health insurance mean that Congress could regulate who people invite to their homes for dinner or end our system of federalism.(10)"
Candidate 4: "The federal government mandates positive activities all the time, and this is why several courts have also upheld the constitutionality of the individual mandate.(7)

Regarding the charge that the individual mandate penalizes a 'non-action', Stephanie Cutter, an adviser to President Barack Obama, has argued: "Individuals who choose to go without health insurance are making an economic decision that affects all of us—when people without insurance obtain health care they cannot pay for, those with insurance and taxpayers are often left to pick up the tab."(7) Thus these people are not engaging in a 'non-action' but rather in an economic choice which has negative implications for other Americans, something Congress has the constitutional power to regulate under the commerce clause and the constitution's provision that Congress should promote the general welfare."
Candidate 5: "The mandate falls under taxation and general welfare powers

An insurance mandate would be enforced through income tax laws, so even if a simple mandate were not a valid 'regulation,' it still could fall easily within Congress’s plenary power to tax income. For instance, anyone purchasing insurance could be given an income tax credit, and those not purchasing could be assessed an income tax penalty.

The only possible constitutional restriction is an archaic provision saying that if Congress imposes anything that amounts to a 'head tax' or 'poll tax' (that is, taxing people simply as people rather than taxing their income), then it must do so uniformly (that is, the same amount per person). This technical restriction is easily avoided by using income tax laws.

Purists complain that taxes should be proportional to actual income and should not be used mainly to regulate economic behaviour, but our tax code, for better or worse, is riddled with such regulatory provisions and so they are clearly constitutional. (11) In many ways, the 'mandate' could be considered a tax, but a tax which people would not have to pay if they purchased health insurance. The House bill imposes a tax of 2.5% on adjusted gross income if a taxpayer is not part of a qualified health insurance program. The Senate bill imposes what is called an “excise tax”, a tax on transactions or events, or a “penalty tax”, a tax for failing to do something (e.g., filing your tax return promptly). The tax is levied for each month that an individual fails to pay premiums into a qualified health plan. Taxing uninsured people helps to pay for the costs of the new regulations. The tax gives uninsured people a choice. If they stay out of the risk pool, they effectively raise other people’s insurance costs, and Congress taxes them to recoup some of the costs. If they join the risk pool, they do not have to pay the tax. A good analogy would be a tax on polluters who fail to install pollution-control equipment: they can pay the tax or install the equipment.(17)

Health insurance mandates incentivize behaviour like many other laws. At one time, the Supreme Court restricted the ability of Congress to use its taxing power to regulate people's activities. In the early part of the 20th Century, the Court drew a distinction between taxes designed to raise revenue, which were permissible, and taxes designed to regulate behaviour, which might not be permissible. However, this distinction was jettisoned by 1937, and the taxing power is now recognized as a broad congressional power.(12) Moreover, Congress has the power to make laws which promote the general welfare. As Democratic House Majority Leader Steny Hoyer argued in November of 2009: “Well, in promoting the general welfare the Constitution obviously gives broad authority to Congress to effect that end. The end that we're trying to effect is to make health care affordable, so I think clearly this is within our constitutional responsibility." The words "general Welfare" show up in the first line of Article I, Section 8 of the US Constitution: "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.”(12)

The power to promote the general welfare becomes crucial when it is considered that it is impossible to create a national health insurance system and help the current 30 million uninsured is to mandate everyone to buy health insurance. You cannot have universal health insurance without a mandate. Every country in the world that has a universal health-insurance system either requires its citizens to buy health insurance, or includes its citizens in a default insurance programme automatically and taxes them for it (which is effectively the same thing). The reasons for this are simple, and have been covered hundreds of times since the current debate over universal health insurance began during the Democratic presidential primaries in late 2007. If citizens within a state are not obliged to participate in a healthcare scheme (whether privately of publicly organised), then many young and healthy people will bet on not needing insurance, and will decline to buy it. Such behaviour will alter the composition of the risk pool, such that it is made up of older, sicker people with higher medical costs, and thus premiums will rise. That in turn will cause more healthy people to leave the system. This is the phenomenon of "adverse selection". Ultimately you're left only with rich old sick people, and nobody else can afford insurance. This is known- somewhat histrionically- as an “insurance death spiral”.

States that wish to pursue the goal of creating an affordable, universally available system of healthcare, must ensure that the majority of their citizens buy into such a scheme.(13) Because there is a compelling benefit to the "general welfare" in instituting a national welfare program, the federal government may rely on Constitutional authority to impose a health insurance mandate. If the States were left to do this, with some instituting a mandate and some not, many would be left uninsured and the risk pool would not be adequately spread. The difference in benefits to the country clearly justifies federal action to create this individual mandate under the Constitution."
Candidate 6: "Mandatory health insurance is analogous to constitutional mandates

Federal mandates are a cornerstone of the American legal system and the everyday life of every American. As Ohio Attorney General Richard Cordray and Iowa's attorney general Tom Miller, argued in 2010: "We live under mandates every day. Without them, society as we know it would disintegrate. Every criminal law tells us what we cannot do. And sometimes the law tells us what we must do. Congress can require young Americans to register for the draft to serve in the military, for example, or can require us all to pay taxes for programs like Social Security and Medicare. We can- and do- argue about what shape these laws should take, without claiming that our leaders are constitutionally barred from dealing with our most pressing problems."(16)

Car insurance is mandatory, so why not health insurance too? If the government requires that individuals buy car insurance, why should it not also be allowed to require that individuals buy health insurance? Some say that there is no mandate to buy car insurance because if you don't want to buy that car insurance, you simply don't have to drive. Yet, for the majority of families and workers, driving is a necessity and not a choice. So, the mandate on drivers to buy insurance is, therefore, directly analogous to a mandate on individuals to buy health insurance.

Medicare tax also sets an important justifying precedent for the individual healthcare mandate. The Medicare program imposes a payroll tax on Americans as a way to fund coverage of their hospital costs once they reach age 65. People cannot opt out of Medicare; it is an obligatory system of health care insurance for one's senior years. Similarly, Congress can use a payroll tax to implement a mandate for individuals to purchase health insurance before they reach age 65. Under the House bill, for example, people will pay a 2.5 percent tax on their income unless they have health care coverage.(12)

It is significant here that there is no fundamental right to go without insurance under the Constitution; no core constitutional rights are violated by the individual mandate. Under both liberal and conservative jurisprudence, the Constitution protects individual autonomy strongly only when “fundamental rights” are involved. There may be fundamental rights to decide about medical treatments, but having insurance does not require anyone to undergo treatment. It only requires them to have a means to pay for any treatment they might choose to receive, alongside treatment that they might not be able to consent to (by reason of infirmity), but that doctors and hospitals may be ethically obliged to provide.

The “liberties” that are modified by the individual mandate are purely economic and have none of the strong elements of personal or bodily integrity that are normally used to invoke Constitutional protection.

In short, there is no fundamental right to be uninsured, and so various arguments based on the Bill of Rights fall flat. The closest plausible argument is one based on a federal statute protecting religious liberty, but Congress is Constitutionally free to override one statute with another.(11) This means that the healthcare mandate is no different to the many other mandates the federal government imposes on the American people to support the general welfare, and as such should be upheld as constitutional."

A refusal to purchase healthcare insurance can have an effect on interstate commerce, because in shrinking the risk pool of insured the premiums would incrementally rise. In 2007, healthcare expenditures amounted to $2.2 trillion, or $7,421 a person, and accounted for 16.2% of the gross domestic product. These statistics leave no doubt that regulating health insurance is synonymous with regulating interstate commerce.(10)

Not engaging in economic transactions is a form of commercial behaviour that Congress can regulate. The Supreme Court held that Congress could require that hotels and restaurants provide services to African-Americans. Their refusal to engage in commerce still was deemed to be within the scope of Congress's commerce clause power.(10)

The likelihood is that everyone will require medical care at some point. An uninsured person in a car accident will be taken to the emergency room for treatment. An uninsured person with a communicable disease will be treated; indeed, it is necessary for the health and welfare of the general population to provide treatment to individuals suffering from infectious diseases. Congress can ensure that there is an adequate fund to pay for everyone's medical needs.
