The Health Care Challenge Threatens All Regulation
March 1, 2011
Mar 1, 2011
6 Min read time
If Congress had voted to provide every American with health care through a national health service, that new law would be safe from constitutional challenge.
The Patient Protection and Affordable Care Act—which critics sometimes label Obamacare, as if the issue were the president, rather than providing adequate and affordable medical care—is under sharp legal attack, condemned as unconstitutional by conservative federal judges in Virginia and Florida.
Yet the grounds for the constitutional assault, ironically, stem from the Act’s conservatism, not its radicalism. If Congress had voted to provide every American with health care through a national health service, that new law would be safe from constitutional challenge. As would be laws that provide tax-supported health insurance to everyone by levying a special tax on businesses that provide no insurance to their workers, or even larding a special excise tax onto fattening foods.
It has long been understood that the power to tax and spend—enumerated in Article I of the Constitution—lies largely with Congress: it decides what to tax and how to spend the revenue. To be sure, those powers are limited, but the limits come from other constitutional provisions—for example, the First Amendment would prohibit Congress from imposing a special tax on atheists or providing better benefits to registered Republicans—and, most importantly, from our democratic system, which gives voters the power to eject from office those representatives who support objectionable policies.
So what is the constitutional problem with the Act? The Act’s “individual mandate” requires most Americans to buy qualifying health-care coverage if they don’t receive it either from the government (such as through Medicaid and Medicare) or their employers. Starting in 2014 those who flout the requirement will face a small tax penalty.
A few people—including every Republican state attorney general and a few Republican governors—have sued, claiming that the individual mandate exceeds Congress’s power under the Commerce Clause of Article I, which gives Congress the power to “regulate Commerce . . . among the several States.” Although the nineteenth-century Supreme Court drew a sharp line between commerce and other aspects of the economy—such as agriculture and manufacturing—by the mid-twentieth century, the Court had recognized reality. As Justice Robert Jackson put it:
Questions of the power of Congress are not to be decided by reference to any formula which would give controlling force to nomenclature such as ‘production’ . . . and foreclose consideration of the actual effects of the activity in question upon interstate commerce.
That statement came in the Court’s unanimous 1942 decision in Wickard v. Filburn. There, a farmer challenged a federal penalty for growing and then consuming on his farm wheat beyond the amount that a federal marketing order had permitted him. (The controls on wheat supply were part of a price-support program intended to help farmers during the Great Depression.) Filburn argued that the commerce power did not permit Congress to regulate his home consumption because his activities were purely local, thus not part of interstate commerce. Justice Jackson rejected that contention, writing that Filburn’s grain “supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce.” He pointed out that the effect on interstate commerce of Filburn’s decision, “taken together with that of many others similarly situated, is far from trivial.”
Since Wickard v. Filburn, the Court has deferred to congressional judgments about the scope of the commerce power. That deference sustained, among other things, the public-accommodations provisions of the Civil Rights Act of 1964, one of the cornerstones of the Second Reconstruction. And although the Rehnquist Court later struck down two federal statutes on the grounds that the activities they regulated (possessing a gun near a school and committing gender-motivated violence) were noncommercial, it reaffirmed the proposition that Congress can regulate essentially any economic activity. Its 2005 decision in Gonzales v. Raich, for example, upheld Congress’s power to criminalize the personal cultivation and possession of marijuana for medical use. Justice Stevens’s opinion explained that Congress had enacted comprehensive national drug laws and found “no difficulty concluding that Congress had a rational basis for believing that failure to regulate the intrastate manufacture and possession of marijuana would leave a gaping hole” in that regulatory regime. And both he and Justice Scalia in his concurring opinion also relied on the Necessary and Proper Clause of Article I, which authorizes Congress “to make all Laws which shall be necessary and proper for carrying into Execution” its enumerated powers.
The argument for the constitutionality of the individual mandate flows easily from Wickard and Raich. Health care constitutes more than 17 percent of U.S. GDP. And since the 1940s, the Court has recognized that insurance companies engage in interstate commerce. The Affordable Care Act is a comprehensive regulation and reform of health care that, among other things, forbids insurance companies from denying coverage on the basis of preexisting conditions or from imposing lifetime caps on benefits. Congress concluded that aspects of the Act would be undercut if individuals could refuse to purchase insurance until they needed care. Thus the mandate. Moreover, Congress concluded that broadening the insurance pool to include healthy individuals would help to lower insurance premiums and administrative costs.
Maybe Congress was wrong about these empirical judgments. I don’t know; I’m just a law professor. But the constitutional question is not whether Congress’s judgment was correct; rather, it is whether Congress’s judgment was rational. In this regard, the many prize-winning economists who agree with Congress are enough to justify its decision.
So what are the challengers’ central arguments? For one, they see a constitutionally significant difference between the individual mandate and all prior law: the mandate, they argue, regulates inactivity—the refusal to buy insurance—rather than something people are already doing, such as growing wheat or marijuana.
But this argument assumes a bright line where reality is more complicated. Virtually everyone will spend money on health care during their lifetimes. That spending itself is clearly economic activity within Congress’s reach. What the individual mandate does is regulate the timing of that activity, in essence requiring people to pay upfront as part of a pool rather than gamble that they will be able to pay when the services are needed or that society will pay for the services if they can’t.
Moreover, in exercising other enumerated powers—such as running the court system or providing for the national defense—Congress has long required individuals to engage in activities they might otherwise choose not to perform. Jury service and registration for the draft are the two most familiar examples, but for those opponents of the individual mandate who want to return to the time of the Framers, here’s another: the Militia Act of 1792 required white men between the ages of eighteen and 45 to provide themselves with muskets and other equipment. Because the national welfare required it, Congress required individuals to purchase goods from the market. Other laws operating today penalize the refusal to engage in economic activity. Both the Sherman Antitrust Act and federal labor law prohibit certain kinds of boycotts.
The more fundamental challenge to the individual mandate trains its sights not on the activity/inactivity distinction but on the entire edifice of modern regulatory law. In this view, the Court went off track when it abandoned the divide between commerce and other forms of economic activity. If this roll-back-the-twentieth-century attack were to succeed, health-care reform would be only the first statute to fall. Federal safety standards; antidiscrimination provisions; minimum-wage and hour laws for agricultural workers, miners, and factory workers; and most other efforts to protect employees from the power of owners would go too, since those employees are not engaged in commerce in its narrowest sense. Although such success is not likely, it is possible, and that—not the 2010 health-care reform—would mean victory for a genuinely radical program.
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March 01, 2011
6 Min read time