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Will the Individual Mandate Hold up in Court?

Thursday, April 8, 2010

The healthcare insurance mandate is unconstitutional. But don’t expect the Supreme Court to rule it so.

At least 18 states have sued to challenge the healthcare legislation’s mandate provision, which requires each individual to purchase health insurance or pay a financial penalty. The mandate is an unprecedented form of federal regulation that, the states argue, Congress has no constitutional authority to pass. With repeal unlikely, legal challenge may be the best chance for opponents to prevent the contested changes to American healthcare. Will the individual mandate hold up in court?

The text of the Constitution and the vision of the framers suggest that the constitutional challenges have merit. However, the majority of constitutional experts are betting that the courts will uphold the mandate. Their prediction is based on a simple observation: the mandate is consistent with the past 73 years of broad constitutional interpretation, which has granted Congress the authority to regulate nearly anything.

Instead of regulating commercial activity, Congress is compelling an activity and then pointing to its commercial implications to justify regulation.

Those who hope to overturn the bill observe that the founders had a very different vision. They divided governing authority by granting Congress only limited and specific powers. Having just fought a bloody revolution against a distant and unresponsive power, the founders reserved most authority to the states, where it would be closer to the people.

During the first 150 years of our history, the mandate’s unconstitutionality would have been apparent because the authority to decide whether individuals should purchase insurance does not fit within any of Congress’s powers. Any judge would have recognized that a federal mandate, whether structured as a tax or regulation, transgresses the constitutional line separating what is local and what is national.

To understand why the courts today are likely to take a different view, we need to go back to 1937. Frustrated that his policies were being overturned by the Supreme Court because they exceeded the scope of federal powers, President Franklin Roosevelt threatened to “pack the court” with six additional justices of his own. While his proposal was rejected, later that year the Court made its famous “switch in time to save nine.” In that switch, the Court greatly expanded its interpretation of the commerce clause, which grants Congress the power to regulate interstate commerce. In a dissenting opinion, Justice James Clark McReynolds warned that the Court’s about-face could lead to the federal regulation of “almost anything,” including “marriage, birth, [and] death.”

The mandate invades an area of individual autonomy that—until now—has been free from the commerce power’s grasp.

Since that key turning point, the original meaning of commerce as trade or exchange has been cast aside for a far more expansive meaning. Soon after 1937, the Court began allowing Congress to regulate any activity that it reasonably believed would affect commerce. In the famous case Wickard v. Filburn, the Court held that Congress could even prohibit a farmer from growing wheat to use on his own family farm if it exceeded the federal government’s predetermined quota. In sum, the power to regulate commerce became the power to regulate anything tangentially related to the economy.

The health insurance mandate fits within this framework because the decision not to buy insurance is an economic decision that affects commerce. But, the mandate also invades an area of individual autonomy that—until now—has been free from the commerce power’s grasp. Even the broadest interpretations of the commerce clause, like Wickard, only give Congress the authority to regulate economic activity. By regulating non-activity, however, the mandate goes further. Instead of regulating commercial activity, Congress is compelling an activity and then pointing to its commercial implications to justify regulation.

The majority of constitutional experts are betting that the courts will uphold the mandate. The mandate is consistent with the past 73 years of broad constitutional interpretation, which has granted Congress the authority to regulate nearly anything.

We should not deceive ourselves as to where this path leads. Once an insurance mandate is constitutional, there is no legal distinction preventing the mandated purchase of other goods. Nothing prevents a struggling industry, particularly one with political favor, from requesting mandates to purchase its products. If Congress can force you to purchase insurance, it can force you to buy a GM car.

For years, Americans have been content to watch the federal government expand far beyond its constitutional moorings. And one must admit that many of these expansions have benefited society. Many problems have required federal authority, such as the ugliness of Jim Crow–era discrimination.

But the constant expansion of the commerce power is troubling. The Constitution limits federal power not only for the benefit of states, but also for individuals. The founders understood that the accumulation of too much power in one place threatens the liberty of everyone. As the Supreme Court cautioned in United States v. Lopez, “a healthy balance of power between the States and the Federal Government will reduce the risk of tyranny and abuse from either front."

It may be unrealistic to return to the original meaning of “commerce.” But this may be the perfect opportunity to pull back from the most extreme reaches of the modern view. Eighteen states have sued the federal government and, for the first time in a long while, people are pondering the proper size of the federal government. After watching Congress pass a bill a majority of Americans oppose, that distant and unresponsive government the founders feared may have started to look all too familiar.

Ryan Lirette is a lawyer and research associate at the American Enterprise Institute.

FURTHER READING: In “The Morning After: Waking up with a Coyote Ugly Healthcare Bill,” Thomas Miller details mitigating responses to the legislation. Edward Blum comments on court treatment of voting rights in “Are We a Nation of One Person, One Vote?” Andy Smarick discusses President Obama’s judicial appointee philosophy in “Obama, Sotomayor, and the Political Limits of Personal Experience.” AEI’s John Yoo calls “The ‘Individual Mandate’ an Intrusion on Civil Society,” while Norman Ornstein explains how “The Big Challenge Now Is Implementing Healthcare Reform.”

Image by Darren Wamboldt/Bergman Group.

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