By Cody Pomeranz ’11, Co-Editor-in-Chief.
As President Barack Obama signed the Patient Protection and Affordable Care Act last March, lawyers across the country were already preparing their lawsuits. And over the past year, arguments for and against the constitutionality of the mandate have spanned from the Commerce Clause to the 5th
Amendment. In fact, in the past few months, two federal judges
in districts in Virginia and Florida have ruled the law unconstitutional, while other districts have upheld it. The case will inevitably be decided by the Supreme Court of the United States. What I hope to do in this article is lay out some of the various arguments for and against the new health care law, and ultimately arrive at a pragmatic conclusion regarding its constitutionality. So, to begin, is the provision mandating American citizens to buy health insurance on a private market unconstitutional? The short answer: No. The long answer: well, read on.
What is the “Individual Mandate?”
In the new health care law, there is a mandate for non-exempt Americans (exemptions include the military, the destitute, those with religious objections, etc.) to purchase health insurance. Now, it is not technically a mandate by law. The government fines you if you don’t purchase insurance. So, you essentially have the choice between buying insurance and paying a penalty. Why do they do this, one might ask? Well, there are a couple of reasons, some we will get into more deeply later. For one, in the new health care law, the government prohibits health insurance companies from denying or dropping coverage for people with preexisting medical conditions. Before this law, health insurance companies could deny you coverage if you had a pre-existing condition, or drop you from coverage if a preexisting condition arises (funny how they don’t want to provide coverage to those who need it the most). This specific new policy regarding preexisting conditions is widely agreed upon. After all, I think it is safe to say that few people would oppose providing health insurance to an eight year-old cancer patient. Thousands die annually because of the denial of coverage to those with preexisting conditions (for a more personal take on the issue, you can read my previous Scroll article on health care, entitled “At what cost: Why health care is a right,” which describes the tragic story of Nikki White).
So where does the mandate come in? Well, for one, the government doesn’t want healthy people to simply buy insurance only when they become sick. Secondly, and more importantly, if the government requires health insurance companies to cover people with preexisting conditions, it’s a death spiral for insurance companies. They now have to cover the sickest, riskiest and, consequently, costliest patients. That may seem fine to you now. But that will result in painful hikes in everyone’s health premiums to offset the costs. So, you need to spread the risk pool out. By requiring everybody, especially those healthiest among us, to buy insurance, the costs to the insurance companies are offset. Thirdly, every year, those who don’t have insurance and go to emergency rooms to get care shift the cost of their care (which they don’t pay for) onto health care providers and, ultimately, insured Americans. In fact, the Congressional Budget Office reports that the price tag of these uninsured Americans is $1000 each year per every insured citizen. This is the logic behind the mandate. However, good logic is not equivalent to constitutionality. So, now that we’ve laid out some background, let’s get into the actual constitutional arguments.
Defining the Commerce Clause (no easy task)
For almost all current court cases and arguments about the health care mandate, the central dispute is over the definition/span of the commerce clause. Relating to government regulatory power, it is one of the most crucial, and vague, provisions in the Constitution. Article I, Section 8 says the following:
- Congress shall have the power to “regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”
This little bit is colloquially known as “interstate commerce.” Now, the issue of the commerce clause’s ambiguity is not new. In fact there is an abundance of case precedent, some of which is particularly important in the health care debate. For the sake of time, I will briefly mention seven cases related to this commerce provision: Wickard v. Filburn (1942), Gonzales v. Raich (2005), US v. Lopez (1995), US v. Morrison (2000), Perez v. United States (1971), Heart of Atlanta Motel v. United States (1964), and Katzenbach v. McClung (1964). Each of these cases will be touched upon at some point in this article. Now, supporters of President Obama’s health care bill claim that the health care industry is such an integral part of the American economy (it registers as roughly a whopping 17% of our economy) that the mandate clearly falls within the government’s power. In 1993, the U.S. Department of Justice released the following statement regarding President Clinton’s health care overhaul attempts:
- “The American health care industry is one of the largest and fastest growing segments of the American economy, and it has the most direct and crucial impact on the lives of all Americans. Spiraling health care costs and inequities in the provision of health care services have an immediate and massive effect on the national economy and thus upon interstate commerce. As a result Congress unquestionably possesses the power ‘to deal directly and specifically’ with health care in order to obtain ‘social, health [and] economic advantages’ for the American people.” (At the end of the excerpt, the DOJ is quoting the 1940 Supreme Court case Sunshine Anthracite Coal Co. v. Adkins).
This is indisputable, and nobody is arguing that the government can’t regulate the health care industry (it already does) or that the health care industry doesn’t relate to commerce. The argument has come down to whether the federal government can penalize people for not purchasing a good or service on a private market. Opponents to the bill boldly declare that this mandate is unprecedented and that the government has never forced people to purchase private goods before (this is incorrect, and we’ll get to it later). Ultimately, the question is whether choosing NOT to buy health insurance is an economic activity. In U.S. v. Lopez, in which the court struck down the argument that the government could ban guns in school zones using the commerce clause, the Supreme Court affirmed the three broad categories in which the government can regulate commerce under the commerce clause (originally outlined in Perez v. United States):
- Category 1: the channels of interstate commerce
- Category 2: the instrumentalities of interstate commerce, or persons or things in interstate commerce
- Category 3: activities that substantially affect or substantially relate to interstate commerce
Category 3 is the one that is particularly relevant. We’ve clearly established that the health care industry “substantially” affects or relates to interstate commerce. But the key word here is “activities.” Opponents argue that not being insured constitutes “inactivity,” and therefore cannot be regulated. However, this argument runs into a lot of faults. As aforementioned, uninsured Americans who don’t pay for emergency medical care cost every insured American $1000 each year. When you don’t buy insurance, you are choosing to put everyone else at risk because insured Americans will pay for any care you might need. You are essentially choosing a different form of a health care plan by deciding to pay out of pocket. Opponents would say, “But what about the people who actually can pay and won’t be a risk to anyone if they need care because they can afford it?” Legal precedent takes care of that. Wickard v. Filburn points out that it doesn’t matter if you can find a single individual who won’t affect commerce. What matters is whether or not it will significantly affect commerce if it occurs on an aggregate level. Essentially, the argument can’t be that John Doe can afford to pay out of pocket and thus won’t be a burden on anyone if he needs care, because not everyone is John Doe. And if people on an aggregate level are choosing to pay out of pocket when they actually can’t afford it, there’s a problem. Thirdly, citizens migrate in and out of the insurance market all the time. If someone drops their insurance, do they automatically become inactive, despite the fact that their clearly “active” action of dropping their insurance now puts everyone at risk? Nevertheless, opponents are steadfast in their belief that not having insurance is a choice NOT to be involved in such commerce that the government is regulating. For instance, health insurance companies can be regulated because they choose to be in that industry, but Joe Schmoe in Texas may want nothing to do with it, so he won’t buy insurance. Supporters of the health care law, mainly Democrats, say that because you are a living, breathing citizen, you are automatically in the system and therefore part of commerce. That’s a stretch, and conservatives are right to take issue with that statement. But some conservatives make the argument that upholding this law affirms that there are no limits on what the government can regulate and, subsequently, force you and me to buy. Here’s a frequent analogy: Can the government force you to buy an American made car, say a Chevrolet, because we bailed out General Motors and if everyone bought a car it would significantly affect commerce? This analogy seems compelling on its surface, and this whole idea of the proverbial “slippery slope” will be dealt with later in this article, but it doesn’t work, and herein lies the rub. You are already in the heath care system because of preexisting law. A little piece of federal legislation called the “Emergency Medical Treatment and Active Labor Act,” passed in 1986, requires hospitals to treat patients needing emergency care, regardless of their ability to pay. As mentioned before, the cost of those who can’t pay is shifted onto health care providers, insurers, and ultimately insured Americans through higher premiums. Thus, the private good or service is already provided to you, whether you like it or not. This is where the car analogy falls apart. If you are standing in your driveway and you need to go to the grocery store, but you have no car, no one is required to give you a car. Now, we could repeal that act and say that doctors should only be required to treat patients that pay for it. But I think we’d all agree that if a twelve year-old girl comes into the emergency room with a gunshot wound, the first priority of the hospital should be to save her rather than ask for the name of her insurance provider.
Now, most of the current legal battles are being fought squarely over the commerce clause in relation to the mandate. The commerce clause is certainly relevant, and any Supreme Court ruling on the mandate will have to deal with the provision. However, I believe there is a different, more compelling argument to be made that uses the commerce clause, but centers around the necessary and proper clause.
The Necessary and Proper Clause (this one’s a winner)
In Article I, Section 8, our constitution reads the following:
- The Congress shall have Power – To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
I will try my best not to repeat myself, but my aforementioned arguments become very relevant here. One of the central provisions championed by the new health care law is that health insurance companies have to offer the same premiums to all customers, regardless of pre-existing conditions. Now, most Americans, and politicians I might add, agree with this provision. After all, it seems rather inhumane that an 8 year-old with leukemia or a 19 year-old with lupus, two pre-existing conditions out of their control, would be denied coverage, or at least forced to drop coverage due to unreasonable premiums. Also, this provision does not appear to be facing any constitutional challenges. The government can, and already does regulate the health care industry, just like other industries. For instance, the EPA makes car companies meet MPG benchmarks. And in Heart of Atlanta Motel v. United States and Katzenbach v. McClung, the Supreme Court ruled that, under the commerce clause, the federal government could prohibit private hotels and restaurants from discriminating based on race. So now that we have established this, remember where the mandate comes in. As I said before, if the government requires health insurance companies to cover people with pre-existing conditions, it’s a death spiral for insurance companies. They now have to cover the sickest, riskiest and, consequently, costliest patients. That may seem fine to you now. But that will result in painful hikes in everyone’s health premiums to offset the costs. So, the government needs to spread the risk pool out. By requiring everybody, especially those healthiest among us, to buy insurance, the higher costs to the insurance companies, and consequently their customers, are offset as the healthy, who won’t need their insurance too often, balance out the sick. The only way the government can require health insurance companies to cover and offer the same premiums to people with pre-existing conditions is to require all Americans to purchase insurance. Thus, the individual health care mandate, under Article I, Section 8, is both “necessary and proper” for carrying into execution the foregoing powers (the foregoing power being the government’s power to require insurance companies to cover those with pre-existing conditions). Now, when Alexander Hamilton dealt with the Necessary and Proper clause, he made clear that whatever provision the clause is being used to defend does not need to be in the constitution, it just can’t be excluded by the constitution. Ultimately we arrive, back at the question of whether the mandate itself is constitutional. Conservatives say the 10th Amendment leaves rights not granted to the federal government to the states. That’s true, but if the mandate falls under the commerce clause, the 10th Amendment becomes irrelevant. So we arrive back at that notoriously vague commerce clause, and my argument that we are already part of the health care system because of pre-existing law. But then opponents come up with a different, yet still legitimate question: Does this go too far? Does allowing the government to compel people to buy health insurance and penalize them if they don’t lead to a very slippery slope that could result in unlimited power for the federal government. Well, maybe, but let’s talk about that.
The “Slippery Slope”
Opponents who claim that this law will give the government virtually unlimited power do raise a reasonable question. But they miss the point. And, unfortunately, so do the federal judges striking down this law. Just this past week, a federal district judge in Florida ruled the mandate unconstitutional and offered this analogy as part of his argument:
- “Congress could require that people buy and consume broccoli at regular intervals, not only because the required purchases will positively impact interstate commerce, but also because people who eat healthier tend to be healthier.”
Now, maybe I’m being a little picky here, but remember Perez v. United States and U.S. v. Lopez from earlier, which establish that the government can regulate activities that “substantially affect or relate to interstate commerce?” The health care industry is roughly 17% of the economy. What percentage do you think the broccoli industry is (in all honesty it’s somewhere around .00000019%)? Health care is a little different than broccoli. Not buying health insurance puts a burden on other Americans. Not buying broccoli means you might buy one of the other hundreds of vegetables, fruits, and healthy foods to choose from. Also, remember the car analogy and the argument against it. The same goes here. No one is required to give you broccoli for free if you need it. But if you need emergency care, it is provided to you regardless of your ability to pay. Despite his poor analogy, the judge does raise a valid point: If healthy foods make you healthy and prevent you from getting sick, couldn’t the government then force you to buy them because they will result in less medical costs and therefore affect the health care industry and subsequently commerce? Also, if we are to follow the “aggregate” argument from 1942, does that mean that the government can force you to buy broccoli because if people don’t buy it on an aggregate level and don’t substitute in healthy foods (like if people don’t buy insurance and can’t pay out of pocket) it will greatly affect commerce? These are good questions, but if the Supreme Court decided every case based on the jurisprudence in future, unforeseen cases, we would be stuck in the 19th century. Case in point: Marbury v. Madison. This 1803 landmark case, as every studious A.P. U.S. History student knows, established a little thing called “judicial review,” which allows the judiciary branch to review and validate or invalidate the actions of the executive and legislative branches. The Constitution, however, does not empower judicial review. The ruling opened the doors for an incredibly powerful Supreme Court. Wickard v. Filburn opened doors for the commerce clause. Roe v. Wade opened the doors for the 14th
Amendment (of course, many legal scholars would argue against the Roe v. Wade decision). Point being, every ruling opens or closes doors for later rulings. Declaring the biggest piece of social legislation since the 1960s that covers over 30 million uninsured Americans unconstitutional because it might lead to a “slippery slope” is a rather flimsy foundation for an argument.
“It’s a tax!” (Not so fast)
The penalty for not purchasing health insurance in the new health care law is simply a tax…but not really. Semantics is everything here. Here’s the short version of this story: the penalty for not purchasing health insurance was originally labeled as a “tax.” But because the word “tax” is so toxic, no matter what it is referring to, Democrats replaced it with penalty or fee. After all, the name of the TEA Party stands for “Taxed Enough Already.” Unfortunately, this poses an issue. Duncan v. Walker set the precedent that if a word is used to describe one provision in the law, and a different word is used elsewhere for other provisions, there must be an intention for the use of that word. This arguably nullifies the Democrats’ reasoning that a tax and a penalty are the same thing, because the health care law uses the word tax in a myriad of other provisions, but not when referring to the mandate.
A Little Lesson in History
Let me preface this little paragraph by saying that these two historical examples in no way justify the constitutionality of the health care law. However, they do challenge two incredibly annoying arguments against the law. The first one: the federal government has never forced individual citizens to purchase a good or a service on the private market. Sorry, but wrong. In 1792, the government passed the “Militia Act,” which required all “free able-bodied white male citizens” to arm themselves with muskets, bayonets, ammo, and other firearm accessories. Because neither the government nor the states subsidized these purchases, it was a mandate to purchase a good on a private market. Even today, Social Security essentially requires people to purchase a pension fund (then again, that is a public good).
Secondly, many opponents of the health care law, or any social welfare program for that matter, claim that the founding fathers would “roll over in their graves” at the sight of Social Security and the new health care legislation. Not so fast. In 1798, John Adams signed into law the “Act for the Relief of Sick and Disabled Seamen,” which deducted twenty cents from the salary of private seamen in order to subsidize health care and establish hospitals for sick and disabled seamen. Basically, it was the payroll tax of the 18th century.
I reiterate, these are flimsy arguments to support the health care law, but they do shed light on the originalist fallacy that the health care law is unprecedented in its mandate to purchase a private good or its subsidization of health care for the sick by making everyone pay in to the system. Granted, both of these laws occurred before judicial review, but that doesn’t change the fact that they were enacted by Congress during the time of the founding fathers.
The Last Word
Liberals call this legislation a remarkable achievement and the most significant social legislation since the 1960s. Historically, they are correct. Presidents since Teddy Roosevelt have tried to push for universal health care and failed. And in less than two years, President Obama was able to pass a law covering more than 94% of Americans. Conservatives decry the law as a “government takeover of health care” and a shift towards “socialized medicine.” This article has no intention of debating the economics of the bill or the wisdom of President Obama’s policy. There are legitimate arguments both for and against the implementation of this legislation, and the mandate in particular. But the issue we’re dealing with here is constitutionality: not whether Congress should do this, but whether it can do this. The bottom line is that, while there certainly are serious constitutional questions, this mandate clearly falls within the scope of government’s power for the aforementioned reasons involving the Commerce Clause and the Necessary and Proper Clause. The Supreme Court, which leans conservative, might disagree when it inevitably hears the case. But, frankly, those select justices will be wrong, just like they were in the Citizens United case and the DC v. Heller case. Now, will that stop all of the yelling, misinformation, and doomsday rhetoric about “death panels” and other nonsense from people who have absolutely no idea what they are talking about? Hell no. Welcome to American politics.
Photo courtesy of http://theapword.files.wordpress.com/2009/12/supreme_court.jpg
