Is the individual mandate in the Affordable Care Act unconstitutional because its reliance on the congressional power to regulate interstate commerce lacks any clear “limiting principle?” What sort of constitutional law test should be applied that would distinguish this type of economic regulation from other ones that have been judged valid in past Supreme Court cases?
Many observers concluded that Solicitor General Donald Verrilli failed to convince a majority of the nine Supreme Court justices in last week’s oral argument that the individual mandate should be upheld. How did the lead attorneys for those challenging the mandate fare in making the case for striking it down?
Paul Clement represented the 26 states challenging the mandate and the rest of the ACA in the Florida v. HHS case. His part of the oral argument dealt primarily with rebutting the economic and health policy rationales used by the federal government to justify the individual mandate as a necessary and proper way to execute the constitutional power of Congress to regulate health insurance as part of interstate commerce. Clement’s role was to soften up the premises behind the mandate. However, his arguments would not be the crucial ones for reaching any final decision on the mandate’s constitutionality. The Supreme Court generally defers to whatever Congress claims it is doing, as long as it has a “rational basis” for its policy judgments. Given the past record of Congress, grading on the curve usually will produce a social promotion in the legal sense, no matter how tenuous the evidence base it uses turns out to be. (Beware the soft bigotry of low expectations under such constitutional analysis…)
Congress and its legal defenders tried to build a “cost shifting” case (no matter how exaggerated and empirically challenged) for why the individual mandate was needed both to reduce the economic burden that millions of uninsured Americans impose on private insurance premium payers and to ensure the effectiveness of the ACA’s other insurance regulations.
Clement’s argument suggested that several other policy alternatives could accomplish those objectives better, without running afoul of the U.S. Constitution. He noted that cost shifting is not uniquely confined to the health market. There are other markets that “affect everyone” or produce costly economic effects on other parties when someone fails to purchase, or pay for, a product. Clement described two kinds of cost shifting at play in the sort of markets involved in this case. He explained that the much bigger amount of cost shifting would occur if the federal government could successfully force healthy people into the health insurance market through a mandate. He observed that such people are not likely to seek uncompensated emergency care, and they are not likely to use the insurance they would be forced to buy.
Clement emphasized that Congress really was trying to force individuals into the health insurance market in order to subsidize those who are already in it and lower their rates. But Congress could do this in a constitutionally appropriate manner by raising taxes and subsidizing insurers to cover high-risk individuals, instead of mandating that private individuals foot this bill.
Clement added that all sorts of people will not use health care in the next year, which is the relevant period for an insurance market that generally operates with annual contracts. He also distinguished the case of state-mandated automobile insurance from that of the ACA’s individual mandate for health insurance. State residents retain the option of “withdrawing” from the automobile, and auto insurance, markets (or moving to another state).
The more important arguments against the individual mandate last Tuesday came from Michael Carvin, counsel for the National Federation of Independent Businesses and several private individuals in the Florida v. HHS case. He sharpened the case for why the ACA’s individual mandate is unprecedented, unlimited, and unconstitutional. Carvin pointed out that every purchase compelled by law could “promote commerce,” but it would not make such laws constitutional. Compelling the creation of commerce is not the same as regulating it in a permissible manner. He noted the government’s argument that almost everyone will have to enter the health care market. Carvin responded that if simply being born is entering the market, then “that literally means they can regulate every human activity from cradle to grave.” (Or, perhaps at least past the point of viability, under post-Roe v. Wade jurisprudence?)
The key constitutional law distinction is between regulating participants after they have entered into a contract or otherwise engaged in commerce, and compelling them to do so beforehand, according to Carvin. He turned a question from Justice Kagan (who asked whether the “activity vs. inactivity” distinction set limits on the commerce power) on its head by saying that the key word is “commerce,” which is in the text of the Constitution. He then underscored that the federal government’s alternative “bogus” limiting principle for the commerce power simply tried to draw distinctions among different industries.
Carvin also criticized how the ACA’s mandate really was aimed at making young, healthy people subsidize insurance premiums to cover the additional cost that the law’s nondiscrimination provisions added to insurance premiums. He suggested that the massive cross-subsidies created by the mandate illustrate the dangers of giving Congress such plenary powers to compel commercial activity, because it can always leverage them to support other public policy goals. Without some constitutional limit of such powers, Congress could compel you to buy ANY product, because any purchase is going to benefit commerce.
Carvin’s best concluding argument against the constitutionality of the individual mandate was that it failed to meet a very simple test: “Are you buying the product, or is Congress compelling you to buy the product?”
That increasingly looks like a line the Court will not allow the ACA’s individual mandate to cross.