Jim Huffman: Is Health Mandate Constitutional?

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.

Summary

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.

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  • John

    If the courts throw out Individual Mandate then Massachusetts court will throw out the Mandate as well. It will end up making the Democratic Party a Minority Party not only in Congress but in the state of Massachusetts.

  • C Finley

    Well, I was intrigued at Huffman, but no longer. (HUFFMAN: You have no real primary to get out of — did you even stop to think about campaign strategy at all before your wrote this?)

    Without getting into a debate about the relative value of the policy itself… This is a pretty shallow and hackneyed reasoning Huffman has put forth.

    “But individuals who choose not to purchase health care insurance are not engaged in economic activity.”

    ORLY? So then, those individuals do not seek out care that is later uncompensated? (Say, at the ER or a local clinic?) The cost of uncompensated care not only affects in LARGE part the amount that I pay in my premiums for health insurance, but — even more so — the amount that the GOVERNMENT pays in health care premiums (which is incredibly high). This accounts for hundreds of billions of dollars each year in the form of direct costs to businesses, individuals, local governments, state governments, and the federal government. Whether you think that the policy is reasonable or not, it’s pretty disingenuous to assert that each individuals’ health care costs occur in a vacuum.

    “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.”

    Doy! See above. Think it’ll be super-easy to assert that the interests being served with such a mandate are other entities, who will see their costs shrink as the rate of uncompensated care spirals towards zero (fairly or unfairly)?

    Again; I’m not asserting here whether it’s good policy or bad policy… but Mr. Huffman’s attempt to separate the current issue from established case law is clumsy at best.

    • Robert Collins

      “Intrigued at”? Clearly the mind of a constitutional scholar.

    • Steven Howatt

      It seems to me that is is your response that is clumsy. “Uninsured” status does not necessarily lead to “uncompensated” activity, for one thing, yet you treat them as equal.

  • Observer

    How great is it to have a person like this running for the U.S. Senate? He provides an even, analytical, clear and focused assessment of the constitutionality question, without any politicking or propaganda at all.

    Isn’t this EXACTLY what we need in the US Senate?

    • Reper

      No, we need magical speakers who promise the world, not scholars and statesmen

    • Merinas van der Lubbe

      More signficant than that, even, is the fact that whether or not Mr. Huffman is right, Ron Wyden couldn’t write an article like this even if his pitiful excuse for a life depended on it.

      (I’m sure he can find some nattering leftist twit of a “Harvard law professor” to ghost-write one for him, of course…)

  • Observer

    C Finley:

    I don’t think much of your analysis here. You claim that Huffman is hackneyed, you you yourself can’t seem to think past your nose.

    You seem to be saying that the individual mandate is constitutional because it is required to prevent uninsured folks from burdening others with costs when they get sick. Sorry, this does not make it constitutional – and that is what Huffman is saying.

    Regulating insurance companies to mandate they cover pre-existing conditions is definitely constitutional, under the Commerce Clause. But for that to actually work, the individual mandate is necessary (otherwise the whole thing falls apart. Why would anyone buy coverage until they got sick or injured?)

    But is an unconstitutional provision (the individual mandate) automatically constitutional just because it is necessary for the success of a constitutional provision (the pre-existing condition mandate.)

    You seem to be arguing that it is. Please defend that in terms of where the authority to do so lies in the constitution. Where is the commerce? Are you saying the “economic activity” that might justify a commerce clause justification lies in the future? Good luck with that.

    Sorry, but all you have shown by your own sloppy reasoning is that you haven’t thought this through very well, while Huffman has.

    Plus, your phony “I was intrigued at Huffman” to try and establish some pretense that you are anything other than a Wyden operative is just too obvious.

  • republicanblack

    You know what republicans, heck the media, are failing to acknowledge about the heath bill, is the education part. If all these doctors are going to leave they need to make sure there will be replacements. Check the scope on the education legislation in the health bill

    https://bit.ly/cwpFI8

  • Brian

    The biggest Constitutional problem with the current law isn’t the Tenth Amendment, but a limit on the way the Congress can levy direct taxes — think of the reason the Sixteenth Amendment had to be passed.

    https://www.poligazette.com/2010/03/26/the-constitution-and-taxes/

  • Rupert in Springfield

    I really fail to see how it would be possible to claim that Filburns actions of consuming all the wheat grown on his farm constituted commerce when taken in the aggregate, but an individuals purchase of insurance when taken in the aggregate does not.

    If you are going to construe regulation of commerce to the extent that Filburns actions alone constitute commerce because if everyone did it, it would affect commerce, then it seems to be impossible to argue that everyone deciding not to participate in purchasing insurance would also affect commerce.

    While I think the Filburn decision is idiotic, the framers of the constitution were largely farmers and clearly did not write that provision with an understanding that it allowed the power under Filburn, I think it would be difficult to uphold Filburn and have the insurance mandate struck down.

    The only way I see this as possible is the fact that insurance companies are licensed to practice in each state individually. Thus if everyone in a state decides not to participate in BO care, it surly would affect the price. However since it is illegal to purchase insurance across state lines, there is no interstate commerce thus no federal authority attends.

    This seems a really thin thread to hang an argument. It seems a possible, but unlikely argument to work. While the framers of the constitution clearly did not intend the commerce clause to be the catch all that it has become, the intent of the Filburn decision was clearly that. While that mindset prevails, it would seem very difficult to me to escape its grasp.

    • valley p

      I wonder how Mr Huffman would respond to this earlier precedent:

      The 2nd Militia Act of 1792, which signed into law by George Washington, then the president and commander in chief. It established state militias and a national standard for their operation. It *required* every “free able-bodied white male citizen” between the ages of 18 and 45, with a few occupational exceptions, to *provide himself with a good musket or firelock, a sufficient bayonet and belt, two spare flints, and a knapsack, a pouch with a box therein to contain not less than twenty-four cartridges, suited to the bore of his musket or firelock, each cartridge to contain a proper quantity of powder and ball; or with a good rifle, knapsack, shot-pouch and powder horn, twenty balls suited to the bore of his rifle, and a quarter of a pound of powder* .

      I’m no constitutional scholar, but it appears in this case the federal government did indeed require American citizens to purchase a whole bunch of very specific products simply because it was deemed to be in the national interest. I don’t know if this law was ever challenged in court. And I don’t know how it might apply to a requirement to purchase insurance in the national interest. But high priced attorneys and activist right wing supreme court justices should have some fun with this.

      And thinking further ahead, suppose Mr Huffman is right and the court throws out the individual mandate, yet leaves the rest of the act intact. Big problem for private insurance companies no? Isn’t that exactly the scenario that will bankrupt them and drive everyone into the waiting arms of Medicare for all? I say bring it on.

      • Rupert in Springfield

        >Isn’t that exactly the scenario that will bankrupt them and drive everyone into the waiting arms of Medicare for all? I say bring it on.

        Of course you would. We know you want everyone on government health care.

        How you wold pay for it is a mystery, but I think everyone is aware this is your position.

        As for throwing out the individual mandate and leaving the rest of the act intact, that is probably what would happen. Most major legislation these days has in its final statement that if any part of the act is deemed unconstitutional, the rest remains in place. Once that is there, the court has no authority to throw out the entire law unless it goes through it piece by piece.

        Hopefully that answers your question.

        • David Appell

          > How you wold pay for it is a mystery,

          Universal health care should lower overall costs, as exhibited by every industrialized country in world who has single payer health care.

          If not, we raise taxes. Americans are relatively undertaxed, esp for all they can expect their govt to do. We can also cut our bloated and obnoxious military budget, in order that children (at least) get the health care they need.

  • eagle eye

    He looks a lot more electable in his “Oregon clothes” than in the suit and bow-tie. He should keep this up! The damage may already be done, though, the bow-tie pictures aren’t going to vanish.

    • valley p

      The next thing you know he will drive a pickup truck and start driving around with not Joe the not really a plumber. Fool me once…..

      “Of course you would. *We know* you want everyone on government health care. ”

      Well then this is yet another thing you think you know that you don’t know. I’d add it to the list, but I need a new notebook. I would settle for everyone who prefers a government run health insurance program (Medicare for all) to be able to do buy into that, and for others to opt out and choose private insurance companies that can screw them 6 ways from Sunday. Free choice. You can even have your acupuncture free policy. My only caveat is that public AND private would have to take on all comers. No exclusions based on pre-existing conditions. Otherwise all the worst cases end up in the public system.

      It would be paid for through either premiums or taxes or a combination. This problem has actually been solved by….oh….I dunno….every other industrialized nation in the world at far less cost than what we already pay.

      “Once that is there, the court has no authority to throw out the entire law unless it goes through it piece by piece.”

      Well given what this court just did on corporate campaign financing, one can never be sure. “Bring it back and ask us a different question” is an interesting thing for a court to do no? Nevertheless, it will be amusing to see the private insurance companies sweating bullets over this one, and for this court to perhaps end up with a decision that does threaten to socialize the whole insurance game. Conservatives may be tying the noose around their own necks here. Should be entertaining.

      Also Rupert, I note that you have no response to the 2nd Militia act. Why is that? Is this a case our resident scholar is unfamiliar with? Can it be? Say it isn’t so!

      • Rupert in Springfield

        >Also Rupert, I note that you have no response to the 2nd Militia act. Why is that? Is this a case our resident scholar is unfamiliar with? Can it be? Say it isn’t so!

        I am not here to correct your ignorance on a subject. The fact that you post something that indicates you are oblivious to the scholarship on the militia act behoves no duty on my part to educate you on the matter.

        I probably have as many books on the subject at hand as you do Pete Seegar records at hand.

        Your not knowing the scholarship on a subject, and thus mistaking ignorance for profundity compels no interest on my part to outline that scholarship in order to get you up to speed.

        At the end of the day what it comes down to is you simply cant admit you know less about a subject with any grace. I gave you two chances to correct yourself on your assertion that illegals had no standing to sue for government benefits in the Supreme Court. Twice you would not take my advice and drop.

        You need to move on from that and not be so threatened that someone knows more than you on a subject that it prompts you to this silly juvenile behavior you demonstrate here.

        • valley p

          “I probably have as many books on the subject at hand as you do Pete Seegar records at hand.”

          You have a whole book? Mazeltov Rupert! That makes you a constitutional scholar for sure. I expect to read your opinion on the 2nd Militia Act and its possible application to HR 3200 in the next issue of the Journal of Constitutional Law, which I am certain you subscribe to.

          And remember…Die Gedanken sind frei.

          • Rupert in Springfield

            >You have a whole book? Mazeltov Rupert!

            Yeesh, when you grow up a little could you let us all know?

          • valley p

            Sure, you will be the first to be informed, but I would not hold my breath. My point, which you seem to have missed, is that I own 1 Pete Seeger CD, meaning you probably own only one law book according to your own calculations, not mine.

  • Anonymous

    Valley P:

    The Congress Passed the 2nd Militia Act under the President’s authority under Article 2, section 2, paragraph 1

    • Rupert in Springfield

      The Militia Act is a subject that has been studied to death and virtually any question one could ask about it is out there.

      If you want to read up on this sort of thing there are plenty of authors out there who have written on it. Donald B. Kates has the best combination of readability and education on the subject in my opinion, but there are plenty of others.

      However it is something that really requires reading, and looking things up and verifying them. It is not a subject for quicky google searches and cut and past research.

  • Bob Clark

    Senator Wyden’s argument is the new healthcare bill allows states to find each of their own ways to ensure all of its citizens have healthcare insurance. Yet the administrative side of the new bill has the IRS checking each individual for his/her mandated coverage. But maybe the same argument applies the states can not be mandated to ensure each of its citizens buys healthcare insurance. For one thing, states might not have the financial wherewithal to do such a thing.

    I hope the case can be sped all the way to the U.S supreme court. I am not sure how Justice Kennedy would decide. He would seem to be key. He likens himself as having an international perspective, and given the existence of socialized medicene in Europe, odds might not favor a victory in the slightly conservative Supremen Court.

  • Constitutional Conservative

    I found Mr. Huffman’s article very informative and legitimately crucial for future arguments over whether the Federal Government has the right to force consumers to buy a certain product. If this case going forward were to go unchallenged, the Congress would then have the right to force more consumerism of any product. Additionally, Liberals may be in power now, but when the inevitable shift happens, will they feel the same when a new Congress forces them to purchase something they deem unfair? Unforseen consequenses are numerous and inevitable. What you want today may not be what you need tomorrow. I look forward to the time when liberals are fed their own vile medicine in bucket loads. Since this has alleviated so many with the burden of personal responsibilty and morality, I would think they will be glib until the power shifts. Group think is great, unless the group is dead wrong, or the group changes in dynamic.
    The tenuous link to car insurance erodes in that, not everyone drives a car, nor is forced to purchase a car. If the comparison was to be more in line, we would see a mandate that every man, woman and child would have to purchase a vehicle, and then be required to purchase insurance. That is the crucial difference here, since everyone has the right to choose NOT to own a vehicle, and it’s still not standard what KIND of insurance you must purchase; that right is still left up to the States.
    The founders and framers worded the Constitution in such a manner that if you found one State to be oppresive, you could move to a more likeable one. That is no longer the case as you are literally chained via the Federal Government.
    In this case, since the instatement of the commerce clause, we have seen our liberty’s erode in the name of “the general welfare” which has now taken on a whole different manifestation of “for the general welfare state”. I for one, would like to go back to what the founders intended, which was personal liberty and responsibility, not one of nanny statetism. Can you imagine the pioneers stopping at the beginning of their trek across America and demanding insurance/catastrophic care insurance prior to adventuring out? How about your Grandparents who lived through the depression, in much worse conditions? Can you think of any time in history when there were’t more hands being held out to the general population, not begging, but DEMANDING they be fed from your wallet, only to return home to their big screen television to watch soap opera’s. For those that keep harping on all these “industrialized nations” that have nationalized healthcare, just what exactly do you mean by industrialized? They are all paying upwards of 70% of their income in taxes, have no ability to develop cutting edge technology (they come here to do R&D). Nor do any of their consumers have the ability to purchase said technology, America has been the main consumer they developed for. They have much much smaller populations, smaller city centers, and regardless, most doctors have patients waiting sometimes months/years for a simple check up, never mind catastrophic illness or cancer. You are talking about over 300,000,000 people, dumped into one system. Don’t bother arguing that we all get to keep our health insurance, as the President promised. Our illustrious Mr. Merkely announced this week that he has a deal with Senator Harry Reid, the Public Option will be a done deal this year.

  • Brodhead For Congress

    Nicely done!

  • William Adams

    If there are valid Constitutional arguements, then they should be heard. The fact that these arguements are being attacked and dismissed in the press, shows the concern the Obamacare people have for the reality of the Constitutional questions.