The Patient Protection and Affordable Care Act: The Commerce Clause and Constitutional Trust
The Florida Case and the Patient Protection and Affordable Care Act
In this post I want to say some things about the high-profile case currently pending before the Supreme Court from the Eleventh Circuit, Florida v. U.S. Dept of Health and Human Services, 648 F.3d 1235 (11th Cir. 2011), cert granted, 132 S. Ct. — (2011). As I discuss below, this case in essentially about constitutional trust regarding the limits of Congressional power under the Commerce Clause. And it is, in my view, a rather easy Commerce Clause case!
In this very lengthy decision, a divided panel of the Eleventh Circuit held unconstitutional the individual mandate to purchase health care insurance set out in the politically controversial Patient Protection and Affordable Care Act (PDF). According to the panel, this provision, which requires the purchase of health care insurance–a requirement enforced by a monetary penalty for non-compliance to be included on the person’s federal tax return–exceeded Congress’s power under the Commerce Clause.
(Other aspects of this decision (a) upheld the Act’s Medicaid expansion provisions against a Spending Power challenge, (b) held that the individual mandate was a penalty, not a tax, and thus Congress could not use the Taxing power to enact it, (c) held that the individual mandate was not a valid exercise of Congress’s power under the Necessary and Proper Clause and (d) held that the (unconstitutional) individual mandate could be severed from the rest of the Act.)
The panel, obviously aware of the importance and high-visibility of its decision, extensively canvassed the relevant Supreme Court Commerce Clause jurisprudence. It reached as far back as Chief Justice Marshall in Gibbons v. Ogden in the early 19th century. It went through the Court’s New Deal decisions which began to defer increasingly to Congressional exercises of the Commerce Clause power. It then continued with an analysis of the Court’s more recent decisions, including Lopez (gun-possession-near-schools) Morrison (The Violence Against Women Act) and Raich (growing marijuana for personal medical use). The Eleventh Circuit concluded that in light of these decisions, Congress had exceeded its power under the Commerce Clause.
As I read this opinion, the Eleventh Circuit was primarily concerned with two things. First, the Act required an affirmative act of purchase, something not present in prior Commerce Clause cases. And second, if the individual mandate were to be upheld, there would be no limits on the Commerce power.
1. It is crucial to understand that the Act, supported by extensive Congressional findings, is intended to deal with two national problems.
The first problem–cost shifting–is the effect of uninsured persons on health care insurance costs for everyone. Millions of uninsured persons use health care services whose cost is borne initially by providers, then by insurers and then, finally, by everyone who pays higher premiums as a result.The second problem is the number of uninsured persons (the estimate is 50 million), many (or most) of whom have preexisting conditions and are therefore unable to obtain health care insurance.
All of the Act’s reforms–the individual mandate, the expansion of Medicaid, the increased regulation of the health care insurance industry, the new health care insurance requirements imposed on employers and the creation of “Health Benefit Exchanges”–are intended to deal with these two national problems in one way or another.
2. A key doctrinal inquiry in Commerce Clause jurisprudence after Lopez and Morrison is whether the regulated activity is economic or commercial in nature. I think it is clear that the decision not to buy health insurance is economic in nature. First, standing alone, it is a decision not to purchase health care insurance, and this is an economic decision (among other things). And second, virtually everyone, even those without health care insurance, seeks and receives health care services at one time or another. The decision not to purchase, when aggregated, thus has a substantial economic effect on interstate commerce, namely, the increased cost to everyone who has health care insurance. Moreover, Raich strongly suggests that even if an intrastate activity is not, strictly speaking, economic in nature, it may still be regulated as part of a comprehensive regulatory scheme.
In my opinion, the individual mandate is constitutional and the Supreme Court should uphold it. This is an easy case under the Commerce Clause. (There is also a rather powerful Necessary and Proper Clause argument to be made here in favor of constitutionality; see Justice Scalia in Raich.)
3. Now comes what for me is the most important theoretical point, as reflected in the Eleventh Circuit’s observations about the lack of limits on the Commerce power if the individual mandate were to be upheld.
A basic question in Commerce Clause jurisprudence, which the Court has given different answers to over the decades, is: who enforces federalism?
Is federalism enforced through the political representation of the states (as well as the people) in Congress, with the result that the exercise of power under the Commerce Clause is subject to deferential review by the Supreme Court, as was the case from 1936 to 1995? Or is federalism enforced by the Supreme Court through searching review, as has been the case in certain, thus far limited, circumstances since 1995 when Lopez was handed down?
In other words, whom do we trust to enforce federalism?
I doubt that the post-1936 New Deal Court would have had any difficulty in upholding the individual mandate because of that Court’s deferential approach to legislation under the Commerce Clause. And I have also already suggested that the individual mandate fits rather comfortably with the current Court’s Commerce Clause jurisprudence, despite the fact that the regulated activity is a failure to purchase health care insurance.
Consequently, if the Supreme Court still holds the individual mandate unconstitutional under the Commerce Clause, it will have reached out even more aggressively than it has thus far. It will have declared that it has the primary responsibility for enforcing federalism and that it, and not Congress, a politically accountable body unlike the Court, is entitled to our constitutional trust.