The ink was barely dry on President Obama's signature when 14 states attorneys general proceeded on a lawsuit challenging the constitutionality of critical provisions of the Patient Protection and Affordable Care Act of 2010. Among other claims relating to changes to Medicaid rules, the AGs say that the law's central feature, the so-called "individual mandate" to purchase health insurance, lies outside of the scope of Congress's authority under the Constitution. Conservative law professors David Rivkin and Lee A. Casey lay out the essentials of the conservative argument in the following article:
Congress has effectuated its individual mandate by imposing what it calls an excise tax on the non-purchase of health insurance. Nobody will be criminally prosecuted for failing to buy health insurance. In the strictest sense of the word, those who don't buy health insurance don't pay a "fine," they pay a tax. Hence, supporters of health care reform say that the individual mandate is, in reality, an uncontroversial exercise of Congress's tax power. Because this tax on the non-purchase of health insurance is expressed as a percentage of income, it is an exercise of Congress's 16th Amendment tax power.
Rivkin and Casey disagree, reframing the issue of the individual mandate under the commerce power. They cite a 1922 case, Bailey v. Drexel Furniture, for the proposition that when Congress uses its tax power to effectuate a regulatory purpose, the matter it regulates must lie within the scope of the commerce power. Because the excise tax here is being used to effectuate the regulatory purpose of encouraging people to buy health insurance, they say, the matter sought to be regulated must lie within the scope of Congress's commerce power.
Rivkin and Casey then turn to recent commerce power jurisprudence. They say that the appropriate precedents governing the issue of whether Congress may regulate the non-purchase of health insurance are United States v. Lopez and United States v. Morrison. In Lopez, the Court struck down a federal regulation on possession of guns in school zones as outside the scope of the commerce clause. In Morrison, the court struck down federal laws relating to violence against women as outside the scope of the commerce power. Just as the activities at issue in Lopez and Morrison were outside of Congress's reach because they weren't "quintessentially economic," Rivkin and Lee argue, so is the non-purchase of health insurance "non-economic" because it is tantamount to refusal to participate in a commercial market.
Professor Jack Balkin makes the counter-argument in the linked article. First, he points out that the proposition that Congress may only impose regulatory taxes on matters within the scope of its commerce power is false. Bailey v. Drexel Furniture, while never formally overturned, was decided in the discredited Lochner era. More recent cases like 1950's US v. Sanchez have stated that regulatory taxes do not fail because they regulate matters not within the scope of the commerce power. Balkin further points out that Congress uncontroversially uses taxation and spending policy to regulate non-commercial activity like family life, by giving tax breaks to married couples who have children.
Balkin next analyzes Rivkin and Casey's commerce argument. Even though Congress may reach non-purchase of health insurance through its tax power, independent of the commerce power, Congress could in fact actually mandate the purchase of health insurance through its commerce power. He cites volumes of authority for the proposition that insurance is regulable under the commerce power. It is "quintessentially economic" activity. And because the aggregate non-purchase of health insurance adversely affects the national health insurance market, pursuant to Wickard v. Filburn and the more recent Gonzales v. Raich, the wholly local, non-economic activity of non-purchase of health insurance can be regulated pursuant to a larger scheme regulating health insurance.
Which brings us to the rub:
A close reading of Filburn, Raich, Lopez, and Morrison suggests that, in commerce power terms, the regulatory tax on non-purchase of health insurance doesn't clearly fall within either line of precedents. The statutes in Lopez and Morrison both involved the regulation of local, non-economic activities outside the context of any broader scheme regulating commerce. Lopez involved the regulation of guns in school zones. Morrison involved the regulation of violence against women. The individual mandate at issue here is unlike the statutes at issue in Morrison and Lopez because the national health insurance market, unlike guns in school zones and violence against women, is "quintessentially economic." The tax on non-purchase of health insurance is a regulation of a wholly local, non-economic matter within the context of a broader scheme regulating commerce.
In Filburn, the court upheld the regulation of wholly intrastate wheat production for personal consumption on the grounds that the aggregate production and consumption of wheat affected the interstate market in wheat. In Raich, the majority affirmed Filburn's central holding, and Scalia wrote separately to emphasize that not only may Congress permissibly regulate local activities which in the aggregate affect interstate commerce, but that Congress my permissibly regulate wholly local, non-economic activities when doing so would undermine a national scheme regulating commerce. Said Scalia:
"Unlike the power to regulate activities that have a substantial effect on interstate commerce, the power to enact laws enabling effective regulation of interstate commerce can only be exercised in conjunction with congressional regulation of an interstate market, and it extends only to those measures necessary to make the interstate regulation effective. As Lopez itself states, and the Court affirms today, Congress may regulate noneconomic intrastate activities only where the failure to do so “could … undercut” its regulation of interstate commerce. ... This is not a power that threatens to obliterate the line between “what is truly national and what is truly local emphasis added.”
But at issue in Filburn and Raich was conduct that indisputably constituted "activity." Whether we characterize it as economic or non-economic, interstate or intrastate, the consumption of wheat and production of marijuana are both things that people do. The non-purchase of health insurance, by contrast, may fairly be characterized as a "non-activity." You don't have to do anything at all to not purchase health insurance. Thus, it seems, the individual mandate may fall into a constitutional gray area between the precedents of Lopez and Morrison, and Filburn and Raich.
Is this a hairpin distinction without a legal difference? Filburn and Raich both used the word "activities" to describe what local matters were regulable under the commerce power. Is the non-purchase of health insurance effectively the same as an activity? Or is there a constitutional difference between choosing to consume wheat or produce marijuana and refraining from purchasing health insurance? If there is a legal distinction, what is it? If there isn't, why isn't there? Is non-purchase of health insurance a matter Congress may permissibly regulate under its commerce power pursuant to a broader scheme regulating commerce? And is there any merit to Rivkin and Casey's argument that matters Congress regulates using the tax power must also be reachable under the commerce power?