Commerce Clause Conundrum–Will The Hudson Ruling Stand?
In declaring unconstitutional the new requirement for Americans to buy health insurance, federal Judge Henry Hudson rests his decision on one of the most widely applied clauses in the Constitution.
Does his interpretation hold up?
Hudson ruled Monday that the Commerce Clause does not give Congress the authority to make people buy something. The Clause itself serves as the basis for a vast swath of federal regulatory statute, and it states, simply, that:
The Congress shall have Power … To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes
The Commerce Clause has been interpreted quite broadly over the years, to the point where “interstate” holds little distinctive meaning in the eyes of judges. Courts have so thoroughly established the precedent that one economic action by one person, even if it happens only within one state, can affect the broader economy of any good in question, that the Commerce Clause generally applies to all economic activity.
Hudson’s problem with the federal government’s argument is that this is a novel application of the Commerce Clause, in that it actually forces people to buy something.
Earlier in this opinion, the Court concluded that Congress lacked power under the Commerce Clause, or associated Necessary and Proper Clause, to compel and individual to involuntarily engage in a private commercial transaction, as contemplated by the Minimum Essential Coverage Provision [i.e., the requirement to buy insurance]. The absence of constitutionally viable exercise of this enumerated power is fatal to the accompanying sanction for noncompliance. …
A thorough survey of pertinent constitutional case law has yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce or role in a global regulatory scheme. The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers. At its core, this dispute is not simply about regulating the business of insurance–or crafting a scheme of universal health insurance coverage–it’s about an individual’s right to choose to participate.
There are more ins and outs, including whether or not the individual mandate is enforced by a “tax” or a “penalty,” but that’s the crux of Hudson’s ruling: a lack of precedent for forcing people into commercial engagement.
There is, however, some precedent.
As Georgetown constitutional law professor Louis Michael Seidman pointed out, the 1964 Civil Rights Act forced businesses into economic engagement when it outlawed racial discrimination in business. Some restaurants didn’t want to engage in commerce with black people, but the federal government forced them to (coincidentally, this was the portion of the law to which Sen.-elect Rand Paul objected).
In another case, Wickard v. Filburn, the federal government tried to penalize a farmer for growing wheat on his own property simply for him and his family to eat. He wasn’t selling it. But the federal government wanted to drive up the price of wheat, and the Supreme Court ruled that the government was within its powers to penalize him for this noncommercial activity and force him, instead, to buy his wheat from the interstate wheat economy, which Congress governs. That decision was handed down in 1942, but the Supreme Court reaffirmed it (cited it to support the logic of a ruling) in 2005, in its ruling on the Raich medical marijuana case.
Judges can decide on their own how directly those ruling apply, and the Supreme Court can always go back on previous decisions if the justices feel it appropriate.
But those are the relevant decisions in which a vaguely similar issue was confronted, in case you were wondering if there’s any historical context for the issue that’s now being forced.
By: Chris Good, Associate Editor –The Atlantic, December 13, 2010
A World Without an Individual Mandate: Careful What You Wish For GOP
Health economist Jon Gruber runs the numbers on a world in which the individual mandate is struck down and not replaced by anything:
-Repeal of the requirement to buy insurance would mean more people would wait until they get sick to buy insurance in the new nongroup exchanges, which would increase the average premium by 27 percent in 2019.
-Retaining the law’s insurance reforms, but repealing the subsidies as well as the requirement to purchase insurance, would further discourage people from buying insurance when they’re healthy. Premiums in 2019 would cost twice as much as projected under the law as a result.
-Retaining the law but repealing the mandate would newly cover fewer than 7 million people in 2019 rather than the 32 million projected to be newly covered by the law. Federal spending, however, would decline by only about a quarter under this scenario since the sickest and most costly uninsured are the ones most likely to gain coverage.
-Retaining only the insurance reforms in the law — repealing both the mandate and the subsidies — would not increase the number of people with insurance, leaving 55 million people uninsured in 2019.
By Ezra Klein | December 13, 2010;
Individual Mandate: Cutting Off Your Policies to Spite Your Opponents
To step outside the latest Supreme Court case, it’s worth remarking on the long-term damage conservatives are doing their cause by focusing their fire on the individual mandate.
The political case for their strategy is clear: The individual mandate, like most taxes, is unpopular. In fact, it’s one of the only unpopular elements of the whole bill. But it’s also one of very few ways to have a health-care system where everyone has coverage but private insurers dominate. In the long run, it may be the only way. That’s why Republicans originally thought up the idea, and why it’s mainly been associated with a Republican health-care bill. Mitt Romney, Chuck Grassley, Orrin Hatch, Bob Dole, Judd Gregg and Mike Crapo are just a few of the prominent Republicans who’ve cosponsored legislation with individual mandates.
More internationally, you may have heard of the conservative affection for Singapore’s health-care system. Here’s how the journal of the American Enterprise Institute describes Singapore’s structure in a gushing article: “In Singapore’s system, the primary role of government is to require people to save in order to meet medical expenses they don’t expect.” Another term for the government forcing you to put money into a vehicle that helps protect you from a health-care crisis is, well, an individual mandate.
Switzerland and the Netherlands also use individual mandates to sustain universal health-care systems that are less centralized than single-payer arrangements. It’s a pretty common device. But if Republicans get it ruled unconstitutional in America, they’d be wise to ask themselves what other options they have: After all, the constitutionality of Medicare is not in question, and that’s really the other model we could eventually trend toward. As Matt Miller put it in a column a few months back:
Conservatives, either from confusion, or for the sheer fun of taking a political bite out of Democrats, are fighting the one measure that’s essential if private insurance is to retain its central role in American health care … [But] be careful what you wish for. By fighting the mandate needed to make private insurance solutions work, and doing nothing to ease the health cost burden on everyday Americans, you’ll hasten the day when the public throws up its hands and says, “Just give us single-payer and price controls.” Don’t think the anti-government wave this fall won’t reverse itself on health care if the most private sector-oriented health care system on earth keeps delivering the world’s costliest, most inefficient care.
By Ezra Klein | December 13, 2010
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