THE CONSTITUTIONALITY OF THE INDIVIDUAL MANDATE TO PURCHASE HEALTH INSURANCE
By Jim Huffman
Candidate for U.S. Senate
Erskine Wood Sr. Professor of Law and Lewis & Clark Law School
A key component of the newly enacted health care legislation is the mandate that every individual purchase insurance or pay a fine to the federal government. Several states have already announced their intention to challenge the individual mandate as unconstitutional. While proponents of the legislation have been quick to dismiss these claims as unfounded, they are not without merit and should receive serious consideration by the courts.
What is the Source of Congress’ Authority?
Unlike the state governments which can regulate pursuant to the general police power, the federal government is limited to its enumerated powers. The principle enumeration of Congress’ powers is in Article I, Section 8 of the Constitution. Nowhere in that section, or anywhere else in the Constitution, is there an explicit authorization for Congress to mandate the purchase of health insurance or any other product or service. So the question is: pursuant to what constitutional authority has Congress enacted the individual mandate to purchase health insurance?
The answer to that question will go as follows: Article I, Section 8, grants to Congress the power to regulate interstate commerce, and Article I, Section 18, authorizes Congress “to make all Laws which shall be necessary and proper for carrying into Execution” that and all other enumerated powers. The health care and health insurance industries are clearly part of interstate commerce so can be regulated by Congress. Although the individual mandate applies only to purely local transactions between consumers and insurance vendors, it will be concluded that the regulation of those local transactions is “necessary and proper” to the achievement of Congress’ objectives in the health care bill.
It is also asserted that Congress has the power to impose the individual mandate pursuant to its Article I, Section 1, power to tax. Here is the argument. Because Congress has imposed a penalty or fee on those who refuse to purchase insurance, the mandated purchase should be viewed as an alternative way for individuals to pay the “tax” imposed by the health care reform law. Pursuant to this utterly implausible theory, Congress could rely on its taxing power to mandate the purchase of any product or service, or could regulate any purely local activity, so long as it also imposed a penalty for noncompliance. No government of enumerated powers can have such unlimited authority. Furthermore, if the individual mandate is understood to be a tax, it violates the Article I, Section 9, prohibition of “capitation” or direct taxation of individuals. The only exception to that limit on Congress’ power is the 16th Amendment which allows for the income tax.
Supreme Court Precedent
The classic Supreme Court case illustrating this reasoning is Wickard v. Filburn [317 U.S. 311 (1942)]. In that case the court upheld a federal limit on the number of acres of wheat Roscoe Filburn could plant and harvest even though Mr. Filburn consumed all of that wheat on his farm. The court’s explanation was that if Mr. Filburn did not raise and consume wheat on his farm he would purchase wheat on the market. Although the court acknowledged that Filburn’s puny wheat consumption would have no measurable impact on the interstate wheat market, his consumption, when aggregated with that of the thousands of other similarly situated farmers, would affect the market and could therefore be regulated.
Why the Individual Mandate is Different
It will be argued that the same is true of individual decisions to purchase health insurance. But there are important differences that should lead the courts to consider carefully a constitutional challenge to the individual mandate in the health care bill. Roscoe Filburn chose to engage in the economic activity of growing wheat. Congress decided to regulate that activity and the Supreme Court held such regulation to be constitutional. But individuals who choose not to purchase health care insurance are not engaged in economic activity. Indeed they are engaged in no activity whatsoever. They have done nothing for the government to regulate. Mandating that individuals participate in the insurance market is very different from regulating those individuals who have chosen to engage in commerce or in other activities that affect commerce. I am aware of no prior case in which it has been held that Congress has the constitutional authority to mandate the individual purchase of a product or service.
Defenders of the new health law are quick to suggest that mandated auto liability insurance is such a precedent. But it is not, for three reasons. First, auto liability insurance is mandated by state governments which derive their authority from the police powers inherent in their sovereignty. Congress’s powers are limited to those delegated by the states and enumerated in the Constitution. Second, it is settled law that driving is a privilege granted by the state, not an individual right. The liability insurance mandate, like the driving test we are all required to take, is a condition individuals must meet for the privilege of having a driver’s license. Third, the auto liability insurance mandate serves to protect the interests of third parties who will suffer the economic consequences of a collision with an otherwise uninsured driver. The health care mandate serves the interests (as determined by Congress or a government bureaucrat) of the individual to whom the mandate applies.
It is argued that the mandate will assure that the government or others who purchase insurance will not be stuck footing the bill for health care provided to the otherwise uninsured. But the prospect or reality of public or voluntary private provision of health care to those without health insurance is no justification for limiting the individual right to choose whether or not to purchase health insurance in the first place. Mandating health insurance interferes with the freedom of choice of the individual who prefers not to purchase it. Mandating auto liability insurance protects the freedom of the third parties threatened by uninsured drivers.
State Prohibitions are Unlikely to Succeed
Several state legislatures have enacted laws prohibiting the individual mandate from applying in their states. However, if the mandate is found to be within Congress’s power, these state prohibitions will likely be invalidated because of the supremacy clause of Article VI, Section 2. The supremacy clause has been interpreted consistently to preempt state laws that conflict with valid federal laws.
Is it a Taking of Private Property?
But there is one other constitutional claim that could affect the validity of the individual mandate. A pending case in Massachusetts claims that mandating the purchase of health insurance results in a taking of private property in violation of the 5th Amendment prohibition on the taking of private property for public use without just compensation. Although the takings clause has not proven to be a very strong protector of property rights over the last several decades of Supreme Court cases, the claim that the individual mandate is a taking should not be dismissed out of hand. Mandating the purchase of any product or service does require the expenditure of an individual’s personal wealth against his or her will. That is the essence of a taking of private property.
We should expect numerous constitutional challenges to the newly enacted health care legislation. While these challenges will be portrayed by proponents as obstructionist and sour grapes, there is real substance to the claims. How the courts rule will have significant impacts not only for the health care law, but for the reach of federal power in the years to come. Every American should follow these cases with interest and concern.