Randall R. Bovbjerg
Can the federal government require individuals to have health coverage? During congressional health reform debates, opponents occasionally claimed that such a mandate is unconstitutional. Supporters countered that the individual mandate is an integral part of health insurance reform, and is supported by clear authority to regulate interstate commerce and to enact federal taxes. Since enactment, attorneys general in Florida and Virginia have sued in federal court to block implementation of the Patient Protection and Affordable Care Act (PPACA).1 The suit in Florida has been joined by officials from numerous other states. The act?s opponents see courts as their ?last line of defense,? as noted by a headline in congressional news daily The Hill.2
In lay terms, there are three main legal arguments against PPACA3: First, once implemented, reform will unconstitutionally compel individuals to buy insurance who don?t want it. Second, starting immediately, federal reform unconstitutionally makes states administer and support expansions. Third, PPACA will ultimately make the federal government too powerful, threatening unlimited federal control over American life, and constitutional interpretation needs to stop such expansion.
Do either individuals or states have a strong constitutional argument against health reforms? The short answer is no, particularly not the state challengers. A longer answer is that the Constitution ultimately means what the Supreme Court says it means, and that even seemingly settled interpretations of constitutional law are subject to its rare paradigm shifts?which is what the third argument appears to seek. Another answer is that these legal arguments may seek more to influence the political climate of enforcement than the judicial review of PPACA.
The Constitutionality of Requiring Individuals to Have Coverage
It is axiomatic that the Constitution gives the federal government delimited powers, but it also allows laws that are ?necessary and proper? for effective implementation. The two powers most relevant to PPACA are control over interstate commerce and the authority to tax and spend to promote the general welfare.4 In contrast, states inherently enjoy broad ?police power? to regulate and promote public health, safety, and morals. The breadth of state authority explains why challenges are raised against the federal mandate but not against the similar Massachusetts mandate.
(1) Federal power to regulate interstate commerce is fundamental to the Constitution, a key part of moving from a confederation of states to a national union. The Supreme Court ruled in 1944 that insurance is such commerce, and states continue to regulate coverage only by virtue of a 1945 federal enabling statute. PPACA lays out numerous ways that health insurance?and the lack of health insurance?involves or affects commerce5:
The sheer size of spending on health care and insurance constitutes a large and growing share of the national economy. The ability to enforce prior (and new) federal insurance regulations is affected by individual insurance choices. For example, guaranteed issue of coverage and mandated coverage for pre-existing conditions by insurers are bolstered by the mandate on individuals to participate in insurance pools. In addition, the impacts of not obtaining coverage go beyond the individual decisionmaker. The uninsured suffer worse health, which reduces productivity in the economy; they impose uncompensated care costs on providers, affecting insurance and program costs for others; and they raise risks of bankruptcies.
Opponents suggest that inaction?failure to obtain coverage?cannot possibly constitute interstate commerce. Proponents emphasize instead that refusal or neglect to buy coverage is a proper subject of federal regulation either because it has material effects on commerce or because its regulation is a necessary part of the multifaceted approach PPACA takes to create a nearly comprehensive social safety net from competing private insurance plans, or both.
(2) Federal taxing authority is very broad. Creating more secure funding for the federal government was another key reason for replacing the Articles of Confederation with a national Constitution. PPACA imposes a tax on uninsurance, which encourages the purchase of insurance and helps finance the public support given to providers of uncompensated care. A reviewing court could thus look to the taxing power as a source of federal authority for PPACA. Opponents say that the federal government cannot tax behavior that it could not regulate directly. This argument, however, relies upon precedent from a pre-New-Deal Supreme Court, whereas supporters cite more recent decisions.6
Even staunch opponents of national health insurance concede that the federal government could constitutionally tax all Americans to provide a public health plan for all. The precedents of Social Security and Medicare are quite robust. Opponents have legal objections, however, to the federal rules needed to create a less nationalized system based on private coverage. This position may seem politically ironic, but it is not legally inconsistent.
(3) Conflicts with fundamental rights like those guaranteed by the Bill of Rights can invalidate even an authorized federal exercise of power. Eventually, individuals affected by the law may make such claims, but for now the state lawsuits have not. It can be noted that PPACA took pains to exempt categories of people who would be unfairly hit by a mandate, including those with religious objections, overseas Americans, and people who cannot afford coverage because they are poor or because they would have to spend a high share of income to pay for it.
(4) Conflicts between federal and state legislation. Virginia legislation is the leading example here. Just before federal reform, the state enacted a provision that ?No resident of this Commonwealth . . . shall be required to obtain or maintain a policy of individual insurance coverage.?7 Such statutes have minimal chance of enforcement in court. States gave up the power to override federal action by ratifying the Constitution as ?the supreme Law of the Land … any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.?8
The attorney general of Virginia?s lawsuit asserts that despite this Supremacy Clause, states can block a federal law if it is unconstitutional.9 This is implausible, as determinations of constitutionality are for courts to make, and state lawmakers? views are not relevant. Nonetheless, states have passed similar laws in a number of areas, not only in health care. Such enactments appear to be less consistent with a viable legal strategy to bar federal action than with helping to build political pressure on federal authorities to back off on enforcement. For example, states seem to have blunted federal efforts to upgrade the security of state personal identification documents and to enforce federal drug laws against medical marijuana users.
(5) State assertion of individual rights
is a centerpiece of the Florida attorney general?s lawsuit as well.10 Normally, individuals must sue on their own behalf and must also wait to do so until they are actively affected by enforcement. The Florida lawsuit says that the state can assert those rights even before the mandate is enforced, adding also that the state is affected because PPACA will lead many more people to enroll in Medicaid. The Virginia case has the additional argument that its statute creating an individual right not to buy coverage gives it standing to resist the federal law now. Courts could logically postpone consideration of these individual rights, but might not do so.
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