Between discussions of the holiday plans, the Patriots, and the weather my morning coffee buddies have recently discussed the constitutional challenges to the Affordable Care Act. For my friends I read and summarized the court decisions in two the challenges as follows.
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The Executive Summary (with my spin):
- CON–The decision not to purchase health insurance, like any decision about how to live one’s life, is an aspect of individual liberty. It’s my choice whether to drink, smoke cigarettes, exercise, and purchase health insurance. Congress’s Commerce Clause power may be expansive, but it does not authorize the federal government to tell me what I must buy. If Congress can require me to purchase health insurance, where does its power end? Can it require that I join a health club? Eat more broccoli and fewer french fries? Listen to NPR?
- I think of this as the So what’s it to you if I’m passive/aggressive? argument.
- PRO–If you are not part of the solution you are part of the problem. Not to decide is to decide. One’s decision not to purchase health insurance has economic consequences that are not limited to the individual. When you don’t purchase health insurance, or when you purchase it only on the day you get sick, your shift the cost of your care to health care providers, insurance companies, and third parties like me. This cost-shifting has a substantial economic effect and is therefore within Congress’s Commerce Clause power.
- This is the No Man is an Island argument.
The Details:
Two federal district court judges in Michigan and Virginia have upheld the Affordable Care Act; another federal district court judge in Virginia struck it down. I’ve read the Michigan and latter Virginia decisions, which deal with the same issue–whether the provision (effective in 2014) requiring all Americans (with limited exceptions) to purchase defined minimum health insurance or pay a penalty is beyond Congress’s power under the Commerce Clause. The issue can be defined simply, but its resolution rests on one’s conception of individual liberty and the relationship between individual actions and societal consequences.
The Commerce Clause’s language is not helpful. It states The Congress shall have power . . . to regulate commerce with foreign nations, and among the several states, and with the Indian tribes. The Supreme Court has interpreted the Clause to grant Congress three broad categories of power, including the power to regulate “activities that substantially effect interstate commerce,” The issue is whether an individual’s decision not to purchase health insurance is an activity that substantially effects interstate commerce. The Court has never decided whether inactivity meets the substantial economic effect requirement. Its cases that are closest to on point (all cited by the Michigan court) deal with affirmative acts: growing more wheat than permitted under a New Deal wheat quota, thereby disrupting Congress’s legislative scheme to support wheat prices; growing marijuana for private medical consumption, thereby disrupting Congress’s regulation of marijuana trafficking; and refusing to rent motel accommodations to blacks, thereby raising barriers to the flow of interstate commerce. Virginia, opposing the ACA, argued that “a decision not to purchase a product, such as health insurance, is not an economic activity.” It distinguished–
what was deemed to be “economic activity” in Wickard and Gonzales, namely a voluntary decision to grow wheat or cultivate marijuana, from the involuntary act of purchasing health insurance as required by the Provision. In Wickard and Gonzales, individuals made a conscious decision to grow wheat or cultivate marijuana, and consequently, voluntarily placed themselves within the stream of interstate commerce. Conversely, the Commonwealth maintains that the Minimum Essential Coverage Provision compels an unwilling person to perform an involuntary act and, as a result, submit to Commerce Clause regulation.
The judge agreed. He concluded that Congress’s regulatory powers “are triggered by some type of self-initiated action.” Because there is no federal court precedent that extends Commerce Clause power “to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market” he held that the minimum coverage provision exceeds Congress’s power.
The judge in the Michigan case reached the opposite conclusion on the same issue. (Ain’t law great?!) His opinion cites Congress’s legislative findings regarding the minimum coverage provision:
Congress determined that the Individual Mandate “is an essential part of this larger regulation of economic activity,” and that its absence “would undercut Federal regulation of the health insurance market.” Congress found that without the Individual Mandate, the reforms in the Act, such as the ban on denying coverage based on pre-existing conditions, would increase the existing incentives for individuals to “wait to purchase health insurance until they needed care,” which in turn would shift even greater costs onto third parties. Conversely, Congress found that by “significantly reducing the number of the uninsured, the requirement, together with the other provisions of this Act, will lower health insurance premiums.” Congress concluded that the Individual Mandate “is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.”
After reviewing the cases noted above the judge concluded that an individual’s decision not to purchase health insurance has a substantial effect on interstate commerce and that the minimum coverage provision is essential to implementing the ACA’s objectives. He states that the “phenomenon of cost-shifting is what makes the health care market unique.”
The health care market is unlike other markets. No one can guarantee his or her health, or ensure that he or she will never participate in the health care market. Indeed, the opposite is nearly always true. The question is how participants in the health care market pay for medical expenses – through insurance, or through an attempt to pay out of pocket with a backstop of uncompensated care funded by third parties.
Here’s the money quote:
The plaintiffs have not opted out of the health care services market because, as living, breathing beings, who do not oppose medical services on religious grounds, they cannot opt out of this market. As inseparable and integral members of the health care services market, plaintiffs have made a choice regarding the method of payment for the services they expect to receive. The government makes the apropos analogy of paying by credit card rather than by check. How participants in the health care services market pay for such services has a documented impact on interstate commerce. Obviously, this market reality forms the rational basis for Congressional action designed to reduce the number of uninsureds.
I agree with the Michigan judge that the economic consequences of an individual’s decision not to purchase health insurance extend beyond the individual and come within existing interpretations of the Commerce Clause. If the Supreme Court reaches the same conclusion I hope it explicitly limits the scope of its ruling to the health care act, because inviting Congress to require us to do whatever it thinks is good for us is scary.
