Straight talk on health care reform: Supreme Court preview: Arguments for and against the mandate
From the beginning, there was little doubt that the minimum-coverage provision of the Affordable Care Act, also known as the individual mandate, would end up in the Supreme Court. That provision requires most American citizens and legal residents to purchase a minimum level of health insurance coverage from a private insurer or pay a tax penalty.
More than two-dozen cases challenging the constitutionality of the mandate and the Affordable Care Act (ACA) were filed in fifteen federal district courts. Several of the cases found their way to federal appeals courts, the highest judicial authority before the Supreme Court. Ultimately, two courts found the mandate to be constitutional and one found it to be unconstitutional. That latter ruling, rendered by the 11th Circuit Court of Appeals in State of Florida v. the United States Department of Health and Human Services, will be the foundation for the Supreme Court's review of the new health care reform law.
Debate surrounding the mandate and the ACA has fallen along predictable partisan lines, but in the appeals court rulings, opinions divided in surprising ways. Two conservative jurists, appointed by Presidents Reagan and G.W. Bush, helped write majority opinions that favored the mandate, and one of the judges who found it unconstitutional was appointed by President Clinton.
On Monday, the Supreme Court will begin three days of oral arguments (six hours, the longest scheduled arguments in court history). The ruling will be delivered at the end of June.
The court will consider several questions, but the most important of them will be the constitutionality of the individual mandate. Here are the main arguments for and against the mandate.
Is the mandate constitutional? The most fundamental and far-reaching of the issues that will be argued is whether the individual mandate is an appropriate use of Congress' power under the Constitution to regulate commerce. This decision, whichever way it goes, will be a watershed event not only for the future of the Affordable Care Act but also for Congress' authority to regulate commerce in a variety of markets that have nothing to do with health care.
The larger constitutional issues will focus on three main areas: 1) the unprecedented nature of the provision, 2) whether the mandate is a constitutional use of congressional authority under the Commerce Clause (Article 1, Section 8) of the Constitution and 3) will the implementation of the mandate open the door to ever-expanding federal authority, at the cost of state's rights and individual liberties.
Unprecedented? An August 1994 report from the Congressional Budget Office describes the individual mandate as "an unprecedented federal action" in that "the government has never required people to buy any good or service as a condition of lawful residence in the United States."(1) In separation-of-powers cases, the Supreme Court has frequently said that a "lack of historical precedent can indicate a constitutional infirmity"(2) in congressional legislation. Opponents contend that given the fact that we have not seen a similar mandate in more than 200 years of American history, the court should question constitutionality of the mandate.
Supporters say that every new proposal is in some way unprecedented. New laws such as the Social Security Act of 1935 or the Civil Rights Act of 1964 were unprecedented and were challenged constitutionally. Drawing a constitutional line in the sand against any new or novel national policy ignores both history and case law.
This issue did not significantly concern the two conservative judges who ruled the mandate constitutional. In his majority opinion, Judge Laurence Silberman of the District of Columbia Court of Appeals stated that the unprecedented nature of the mandate "seems to us a political judgment rather than a recognition of constitutional limitations."(3) And Judge Jeffrey Sutton of the 6th Circuit in Cincinnati suggested that the mandate may "offer one more example of a policy necessity giving birth to an inventive (and constitutional) congressional solution."(4)
Proper use of the Commerce Clause? The Commerce Clause states that Congress shall have power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Since the text of the clause is general,congressional authority has largely been dictated over time by case law. Since the New Deal, case law has significantly expanded Congress' power to regulate interstate commerce.
Opponents say that the mandate is an inappropriate use of Congress' commerce power, because for the first time, Congress will attempt to compel American citizens to purchase a private product that they may not wish to purchase, may never have purchased and may never use. The decision not to purchase health insurance, they maintain, constitutes commercial "inactivity," which is not related to interstate commerce and therefore is not subject to regulation.
Opponents grant that Congress may regulate even non-commercial activity, if in the aggregate it has a substantial affect on interstate commerce; however, to compel an individual to actually engage in economic activity is a dangerous expansion of federal authority. As the majority opinion by the 11th Circuit Court of Appeals put it: Congress would require "individuals to enter into commerce so that the federal government can regulate them."(5)
Supporters argue that the mandate is a proper use of congressional authority because health care has a huge impact on the economy. In 2009, health care represented 17.6 percent of the national economy, and private and government insurance financed about 75 percent of all health care spending.(6) The Affordable Care Act is, therefore, an appropriate vehicle for regulating interstate commerce in a coordinated way that states simply cannot do independently. Additionally, the mandate represents a constitutional solution because it focuses on stabilizing the entire health care market and is not merely regulating individual conduct.
Supporters of the mandate also point out that the language of the Commerce Clause does not distinguish between economic activity and inactivity. Additionally, no Supreme Court case has ever held or implied that the clause applies only to individuals actively engaged in commerce.(7)
They also question the argument that individuals will never purchase or need health insurance or engage in economic activity regarding health care. Individuals cannot guarantee that they can or will remain commercially or economically "inactive." To the contrary, it is a virtual certainty that at some point, an individual will become actively engaged in the health care market. Individuals cannot guarantee that they will not become sick. Without insurance, individuals cannot guarantee that they will be able to completely pay for their treatment. And unlike providers in other markets, hospitals cannot refuse service based upon an individual's ability to pay. Thus, the real issue is how and when individuals will consume and pay for those services and not whether they will consume them.
Supporters discount the argument that people are simply "sitting alone in their homes and doing nothing" when they make the decision not to buy insurance. This decision to self-insure is a decision about how to manage future financial risk and is in itself an active economic decision. The decision to self-insure or purchase insurance represents two alternatives for addressing the same financial risk. One decision is no less "active" than the other, and each directly involves commerce.(8) In 2008, the uninsured were unable to pay for about 63 percent of the cost of their treatment, leaving some $43 billion in uncompensated costs that were passed on to insurers and then their customers. Those costs raised family health insurance premiums by an average of $1,000 a year.(9)
One final consideration on the Commerce Clause: If the Supreme Court were to accept the distinction between "commercial activity and inactivity" as a legal precedent, it could create significant implementation problems across a variety of commercial markets. As Judge Sutton wrote: "... were 'activities' of some sort to be required before the Commerce Clause could be invoked, it would be rather difficult to define such 'activity.' ... The Supreme Court has repeatedly rejected these kinds of distinctions in the past – disavowing, for instance, distinctions between 'indirect' and 'direct' effects on interstate commerce – because they were similarly unworkable."(10)
Slippery slope? One of the strongest legal arguments against the mandate is that it offers no limiting principle regarding even more expansive mandates. When courts evaluate a new expansion of Congress' constitutional authority, they have historically wanted to see clear limits to those powers.(11)
Opponents say that without such a limiting principle, there would be little to prevent expansion of Commerce Clause powers. They see no legal barrier to preventing lawmakers from compelling the purchase of other products from private industry in other markets.
Supporters argue that health care is unique among commercial markets because virtually everyone will use health care, hospitals must treat patients regardless of their ability to pay and those costs are inevitably shifted on to others. Opponents counter that even if health care is a unique market, that in itself does not provide a limit on Congress' commerce powers. Moreover, courts would be required to judge every future mandate based upon the specifics of the market it attempts to regulate, and that should not be the responsibility of federal courts.
Opponents argue that the Constitution allows Congress to infringe upon state and individual sovereignty only in very limited circumstances. Without a limiting principle, the federal government could eventually, if not inevitably, chip away at the separation of state and federal powers. Ruling the mandate constitutional would fundamentally alter the relationship between federal and state government, as well as, the relationship between the federal government and individual citizens. In the words of the 11th Circuit Court of Appeals majority opinion, to compel Americans "to purchase insurance from a private company for the duration of their lives is unprecedented, lacks cognizable limits and imperils our federal structure."(12)
Supporters maintain that, even without a direct limiting principle, the mandate does not represent a slippery slope to unchecked federal power. They say that Congress and the courts are merely interpreting the scope of a long-established constitutional power, not creating a new constitutional right.(13)
They say that existing Commerce Clause case law already provides a limiting principle because it demands that any future mandate must have a very direct and substantial impact on interstate commerce, that the health care market is so unique that the Supreme Court could limit its ruling to that one market alone, that protections found in the Bill of Rights would limit any direct impact on individual or personal liberties, and finally that since the mandate is a rational form of commercial regulation that states could not accomplish independently, it would not weaken the constitutional separation of state and federal power.
In the end, the decision about the constitutionality of the individual mandate rests in the hands of the nine justices of the Supreme Court. Regardless of which argument holds sway, their decision will forever affect health care in America and define the scope of federal authority in the future.
1) Congressional Budget Office Memorandum, The Budgetary Treatment of an Individual Mandate to Buy Health Insurance, August 1994.
2) Virginia Office for Protection and Advocacy v. Stewart, 131 S. Ct. 1632, 1641.
3) D.C. District Circuit Court of Appeals, majority opinion, Susan Seven-Sky v. Holder, Nov. 8, 2011.
4) 11th District Circuit Court of Appeals, dissenting opinion, State of Florida v. the United States Department of Health and Human Services, Aug. 12, 2011.
5) 11th District Circuit Court of Appeals, majority opinion, Aug. 12, 2011.
6) Centers for Medicaid & Medicare Services, NHE Fact Sheet, Feb. 23, 2012, and Families USA, Hidden Health Tax: Americans Pay a Premium (2009), pages 7-8.
7) D.C. Circuit Court of Appeals, majority opinion.
8) 6th Circuit Court Majority Opinion: Thomas More Law Center v. Obama, June 29, 2011.
9) Families USA, Hidden Health Tax: Americans Pay a Premium (2009), pages 7-8.
10) D.C. Circuit Court of Appeals, majority opinion.
11) Baker, Sam, Lawyers, courts see weaknesses in defense of Obama's healthcare law, The Hill, Jan. 15, 2012.
12) 11th District Circuit Court of Appeals, majority opinion.
13) D.C. Circuit Court of Appeals, majority opinion.