Constitutionality of the Individual Mandate to Buy Health Insurance
The attorneys general of thirteen states have filed a complaint in the Northern District of Florida challenging the constitutionality of the newly enacted health care reform bill. While the complaint launches a variety of challenges against the bill, many based on notions of state sovereignty, the most interesting argument focuses on whether the Commerce Clause empowers Congress to require all Americans to obtain health insurance.
The Patient Protection and Affordable Care Act, signed by President Obama on March 23, requires all individuals to purchase health insurance if it is affordable and if the individual does not fall into any exception. According to the attorneys general, the individual mandate to buy insurance exceeds the scope of Congress’s power under the Commerce Clause. This argument may have seemed laughable a mere twenty years ago; however, recent Supreme Court decisions limiting the scope of the Commerce Clause, coupled with an activist conservative majority on the Court, may breathe life into this seemingly inane argument.
Under the Commerce Clause, Congress has the authority “[t]o regulate commerce . . . among the several states . . . .” Since the late 1930’s, the Court has been extremely deferential toward Congress when considering challenges under the Commerce Clause. In NLRB v. Jones & Laughlin Steel Corp., the Court held that Congress may regulate intrastate activities that have a substantial effect on interstate commerce. To determine whether an intrastate activity has a substantial effect on interstate commerce, Congress may aggregate the effects of seemingly inconsequential individual activities. Thus, in Wickard v. Filburn, the Court found that Congress reasonably concluded that the aggregated impact of individual violations of national wheat quotas had a substantial effect on the interstate wheat market. Following the precedent established in J & L and Wickard, the Court upheld every challenge to Congress’s Commerce power over the ensuing sixty years.
However, the Court finally asserted itself in United States v. Lopez. In Lopez, the Court struck down the Gun-Free School Zones Act of 1990 as an unconstitutional exercise of Congress’s Commerce power. The Act prohibited individuals from carrying guns within 1000 feet of a school. The Government attempted to tie the regulation to commerce by arguing that gun violence in and near schools inhibits learning, which substantially affects interstate commerce. The Court was having none of it. According to the Court, the Government’s argument was far too attenuated. Carrying a gun is not an economic activity, and the Court refused to aggregate the effects that a non-economic activity might have on commerce.
This focus on the non-economic nature of the regulated activity cropped up again in United States v. Morrison. In Morrison, despite the fact that Congress made substantial findings to demonstrate the affect that domestic violence has on interstate commerce, the Court struck down the Violence Against Women Act of 1994. Again, the Court refused to aggregate the effects of non-economic activity. The Court reasoned that because violence against women is not itself an economic activity, Congress cannot aggregate its effects to demonstrate the necessary link between domestic violence and interstate commerce.
The crux of the argument against the individual mandate contained in the new health care bill appears to be based on the rulings in Lopez and Morrison. Essentially, the challengers will likely argue that Congress cannot require people to purchase health insurance because the decision to not purchase something is not really an economic activity. In fact, it’s the lack of economic activity that Congress is regulating. By not purchasing something, the individual is not doing anything. There is no activity to aggregate to establish the substantial effect on interstate commerce. The Attorney General of South Carolina stated recently, “For the federal government to be telling people that they must buy health insurance, or they must buy anything at all, is not one of the powers that is given to the federal government by the Constitution.”
When an individual chooses to not purchase health insurance, that individual is engaging in an economic activity because the person is choosing to defer and spread the costs of a necessary purchase. The costs of health care are inevitable. Someone who chooses to not buy health insurance will eventually incur health care costs, often through visits to the emergency room. Much of the time, these costs will be overwhelming. The individual who incurred the costs will often not pay the costs. Unpaid medical costs of uninsured users of the health care system raise the costs of medical care for everyone, substantially affecting interstate commerce and undermining Congressional efforts to stabilize premiums. So by not purchasing health insurance, an individual actually engages in activity that puts upward pressure on the cost of health care by deferring, spreading, and raising the costs of health care for everyone else. The notion that an individual does not engage in an economic activity by not purchasing health insurance is simply belied by the practical effects of choosing to forego health insurance coverage. The aggregate impact of individuals choosing to forego insurance undoubtedly substantially affects interstate commerce.
Moreover, mandating the purchase of health insurance is necessary to regulate the interstate insurance market. The attorneys general challenging the health care bill must acknowledge that Congress has the authority to regulate the interstate insurance market. The individual mandate is merely one component of a broader scheme to regulate this interstate market. In Justice Scalia’s concurring opinion in Gonzales v. Raich, he stated that “Congress may regulate noneconomic intrastate activities only where the failure to do so ‘could . . . undercut’ its regulation of interstate commerce.” Under Justice Scalia’s reasoning, even if the Court found that not purchasing insurance was a non-economic activity, Congress could mandate the purchase of health insurance if “failure to do so ‘could . . . undercut’ its regulation” of the interstate insurance market.
Although Lopez and Morrison offer opponents of the health care bill a glimmer of hope, in reality, it’s a false hope. For any court to strike down the individual mandate, the court would have to ignore more than a half century of precedent. The court would have to accept the tenuous claim that individuals who forego health insurance are not engaging in economic activity despite the substantial evidence to the contrary mustered by Congress. Further, the court would have to reject Raich by holding that Congress may not regulate a non-economic activity despite the fact that failure to do so could undermine the legitimate regulation of an interstate market. It seems highly unlikely that any court will accept the argument put forward by the attorneys general.
 The complaint is available at http://www.scag.gov/newsroom/pdf/2010/healthcare.pdf.
 The bill is available at http://frwebgate.access.gpo.gov/cgi bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3590pp.txt.pdf.
 U.S. Const. art. I, § 8, cl. 3.
 See NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937).
 Id. at 37.
 See Wickard v. Filburn, 317 U.S. 111, 125-27 (1942).
 Id. at 127.
 United States v. Lopez, 514 U.S. 549 (1995).
 United States v. Morrison, 529 U.S. 598 (2000).
 Zachary Roth, Could SCOTUS Be the Death Panel For Health-Care Reform, TalkingPointsMemo, Mar. 23, 2010, http://tpmmuckraker.talkingpointsmemo.com/2010/03/ could_scotus_be_the_death_panel_for_health-care_reform.php?ref=fpb.
 I use “choose” here to connote the idea of individuals making rational economic decisions while recognizing that millions of Americans do not actually choose to forego health insurance. Health insurance is often cost prohibitive and most people do not simply choose to forego coverage. The new health insurance bill eases these costs by offering an array of tax incentives to individuals who purchase health insurance.
 Gonzales v. Raich, 545 U.S. 1, 38 (2005) (citing Lopez at 561).