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Presentation by Jack Painter
Panel Discussion - Constitutionality of the Individual Mandate
University of Cincinnati College of Law
March 14, 2011
Are there limits on what the federal government can tell us to do, and, if so, what is the source of those limits? We face that question because the individual mandate provision of the Patient Protection and Affordable Care Act requires most Americans to purchase health insurance from a private company or pay a penalty. Intuitively, most of us are uncomfortable with the idea the federal government can force us to purchase private products, but exactly what prevents that?
The source of the Congressional power in question – Article I, Section 8.
The starting point in the constitutional analysis is a principle on which everyone agrees. The federal government is one of enumerated powers, and it can exercise only the powers granted to it in the Constitution.
Article I, Section 8 of the Constitution says Congress has the power to “regulate Commerce . . . among the several States” and also has the power to “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers . . . .” The first clause is known as the Commerce Clause, and the second clause is known as the Necessary and Proper Clause.
The Obama administration’s initial justification for the individual mandate – the “substantial effects doctrine”.
Initially, the Obama administration tried to justify the individual mandate under Article I, Section 8 of the Constitution based on an established Supreme Court doctrine referred to as the “substantial effects” doctrine. Under that doctrine, Congress may regulate purely local activity if it is economic in nature and substantially affects interstate commerce.
But all the Supreme Court decisions applying this doctrine involve activity, such as controlling and using navigable waters, establishing wages and hours for employees, producing wheat for personal consumption, and turning away motel guests based on race. So the Obama administration has been forced to argue that a failure to act (a decision not to purchase health insurance) constitutes activity or, in the alternative, that Congress’ commerce power reaches beyond activity to cover economic decisions.
Judge Kessler of the D.C District Court accepted this argument when she recently upheld the individual mandate on the grounds that Congress has the power to regulate what she called “mental activity.”
The problem is that this argument doesn’t have any logical limits. For example, a “decision” not to take a job or not to sell your house or not to buy a car would be “activity” that is commercial and economic in nature and could be mandated by Congress.
The Obama administration’s fallback position – Justice Scalia’s “essential to a broader regulatory scheme” theory.
So the Obama administration has shifted to the argument that Congress may do anything essential to a broader regulatory scheme to regulate interstate commerce. Here, the broader regulatory scheme includes mandating that insurance companies cover people with pre-existing conditions. The government says that without the individual mandate, that scheme won’t work because people will wait until they are sick to buy health insurance.
There are several problems with this argument.
· The Supreme Court has never adopted this doctrine. It is based on a statement by Justice Scalia in his concurring opinion in Gonzales v. Raich, where he said “Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce.” Justice Scalia based that statement on dicta – meaning a comment not essential to the decision – in United States v. Lopez, where Justice Rehnquist said the Gun Free School Zone Act was not an essential part of a larger regulatory scheme and implied that if it had been, the decision in Lopez would have been different.
· There is nothing in Justice Scalia’s concurring opinion that supports extending his proposed doctrine to inactivity.
· Doing so would permit Congress to mandate any form of private conduct. All Congress would have to do is first adopt a permitted regulatory scheme that won’t work without a mandate and then impose the mandate.
The government’s argument in support of the individual mandate advances a theory of government power that has no limiting principle.
The proponents of the individual mandate argue that applying the “substantial effects” doctrine or Justice Scalia’s proposed “essential to a regulatory scheme” theory to inactivity really does have limits because healthcare is different.
But is that true? As Judge Vinson noted in his decision in the recent Florida District Court case, “the mere status of being without health insurance, in and of itself, has absolutely no impact whatsoever on interstate commerce . . . at least not any more so than the status of being without any particular good or service.”
The government responds that everyone will eventually need health care, and because emergency rooms must provide emergency medical care without first inquiring about ability to pay, a decision not to purchase health insurance is necessarily a choice to take a free ride on the healthcare system.
But that is clearly false. Millions of people who do not have health insurance today, including a lot of young adults, will acquire it in the future before they incur emergency medical expenses they cannot afford. And those who remain uninsured at the time they receive emergency medical care will still be legally obligated to pay their bill and won’t necessarily fail to do so. As a result, the most that can be said is that some but not all who fail to purchase health insurance will eventually get a free ride. (According to authoritative studies, the uninsured pay about a third of the aggregate cost of their care out of pocket, and the remaining uncompensated cost is shifted largely to government and has a negligible effect on private health insurance premiums.)
So the principle being asserted by the government is that people shouldn’t be allowed to fail to act if in the aggregate that shifts costs to others. Well, if that’s the principle, what about the failure to go to the doctor for preventative care or checkups? Does that ultimately increase healthcare costs and result in additional cost shifting? If so, does Congress have the power to force people to see their doctors?
Those who say “healthcare is different” also argue that a decision not to purchase health insurance limits the size of the pool of insured individuals and – assuming those not insured are young and healthy – drives up premium costs. But that applies to all forms of insurance, not just health insurance. And that argument also establishes the principle that people shouldn’t be allowed to shift costs to others and again raises the specter of forced doctor visits.
There’s one other problem. The argument that healthcare is different is not a constitutional principle. In the future, courts will never examine the factual differences between programs to see if economic mandates are appropriate. Mandates will be constitutional if Congress deems them to be necessary.
If accepted, the government’s theory would give Congress virtually unlimited power to impose mandates on private conduct.
Let’s assume, however, that Professor Bryant is correct, and the commerce power permits the individual mandate. I’d like to know exactly what Professor Bryant thinks the limits are on Congressional power to mandate private conduct.
Erwin Chemerinsky, the dean of the California Irvine School of Law, argues that “Congress could use its commerce power to require people to buy cars.” Presumably, Professor Bryant agrees. He recently wrote that Congress is within its powers as long as it simply requires “the payment of money.”
What are the outer bounds of this federal power? Can the federal government force us to buy broccoli or join a health club? In recent Senate testimony, Former Solicitor General and Harvard law professor Charles Fried defended the constitutionality of the individual mandate and argued that Congress had the power to force people to buy broccoli. What about going one step further to tell us we must eat broccoli or exercise?
The answers provided by Dean Chemerinsky and Professor Bryant are not very comforting. Dean Chemerinsky says, “what people choose to eat well might be regarded as a personal liberty” and thus beyond Congressional control. Professor Bryant stated in his recent Enquirer column that the federal government might not be permitted to force us to exercise.
From what I can determine, their theory is that those actions by the federal government would intrude on personal autonomy and therefore would not be a permissible regulation of commerce. I’d like to know why government intrusion on decisions like whether to go to a doctor and how to pay for it don’t also intrude on personal autonomy.
I don’t know about you, but I find it alarming that the proponents of a broad commerce power can’t convincingly distinguish the individual mandate from forms of government coercion that are clearly inappropriate.
Let me ask this. How many of you in this room are comfortable with the idea that the federal government might be able to force you to buy broccoli, join a health club, or buy a car?
Well, it appears Professor Bryant has some more explaining to do.
The “proper” test under the Necessary and Proper Clause must also be met.
Now let me offer three observations that relate to the “proper” test of the Necessary and Proper Clause.
In McCullough v. Maryland, Chief Justice Marshall said the means chosen by Congress to exercise its commerce power are “proper” under the Necessary and Proper Clause only if consistent with “the letter and spirit of the Constitution.”
This proper test is relevant because Justice Scalia’s proposed essential to a regulatory scheme theory is based on the Necessary and Proper Clause. The substantial effects doctrine seems to be as well, although the Supreme Court has not always been clear on that. Even so, two of the seminal cases developing the substantial effects doctrine, United States v. Darby and Wickard v. Filburn, are explicitly based on both the Commerce Clause and the Necessary and Proper Clause.
First observation – The government’s theory puts the burden of protecting liberty almost entirely on individual liberty rights, and that has serious implications.
My first observation is that Professor Bryant’s view of the commerce power puts the burden of protecting liberty almost entirely on the concept of individual liberty rights, and that has serious implications for federalism and the protection of liberty.
It’s hard to read the Federalist Papers or the Constitution without concluding that the vision of our founding fathers was a sea of individual liberty rights with islands of government power. We’ve debated for over 200 years about how many islands of government power exist and how big those islands are. As the islands of government power have grown, we’ve evolved in the opposite direction towards a sea of government power with islands of individual liberty rights.
If I am correct in assessing Professor Bryant’s vision of the commerce power, Professor Bryant is asking us to fully accept the idea of a sea of government power with islands of individual liberty rights.
So what’s wrong with that?
Well, let’s look at what those islands of liberty rights are. They fall into three categories. First, minor limits on federal power under the commerce clause, like those recognized in United States v. Lopez (Congress cannot prohibit guns near schools.) and United States v. Morrison. (Congress cannot regulate gender-motivated violence.) Second, the rights enumerated in the Bill of Rights. And third, so-called “unenumerated rights” that the Supreme Court has read into the Constitution through the Fourteenth Amendment under a doctrine called “substantive due process.”
Because the limitations on the commerce power are so minor under Professor Bryant’s theories, the islands of liberty rights really consist of the second and third categories - the Bill of Rights and unenumerated rights.
That means the limits on federal and state power – the fences around their power, if you will – are effectively the same, and as a result the federal government has virtually the same powers as the states. That is inconsistent with the idea stated by Madison in Federalist No. 45 that the powers of the federal government are “few and defined”, unlike the powers of the states, which are “numerous and indefinite.” (The Supreme Court reaffirmed this famous statement by Madison as recently as United States v. Lopez.) It is also inconsistent with the plain meaning of the Ninth and Tenth Amendments.
It also means our liberty is at risk since existing individual liberty rights don’t provide much protection from the possible intrusions on personal autonomy mentioned above. The Bill of Rights enumerates specific rights, like freedom of speech, but it isn’t well suited to protect us against the types of personal mandates we’re discussing, presumably because the framers of the Constitution never envisioned them. That means we have to rely on the so-called “unenumerated rights” that have been recognized by the Supreme Court under the doctrine called “substantive due process.” But those “unenumerated rights” are fairly narrow. One line of cases recognizes a right to privacy and protects only “fundamental” rights, like the right to abortion. Another line of cases, based on Lawrence v. Texas, recognizes a right to liberty itself but at best protects only conduct that is not harmful to others, such as certain private sexual conduct. Based on this Supreme Court precedent, there is a real risk the courts will conclude that our failure to eat broccoli or exercise indirectly harms others by raising healthcare costs and is therefore not a protected right. I believe that’s why Dean Chemerinsky and Professor Bryant hedged on whether the federal government could impose those mandates.
Second observation – The individual mandate is unprecedented, and government mandates like it are vastly more intrusive than mere prohibitions.
My second observation is that the individual mandate is unprecedented, and government mandates like it are vastly more intrusive than mere prohibitions.
To understand this, it helps to categorize government coercion, whether state or federal, into three categories: prohibitions of chosen activity, regulations of chosen activity, and mandates.
· A prohibition of chosen activity occurs when the government says “You can’t do X.” This happens, for example, when a law says you can’t drive above the speed limit or steal from your neighbor.
· A regulation of chosen activity occurs when the government says “If you choose to do X, you must do X in a certain manner.” For example, if you choose to build a house, you must comply with building codes. Or the government says “If you choose to do X, you must do Y as well.” For example, if you choose to drive a car on public roads, you must purchase auto insurance.
· A mandate occurs when the government says flat out “You must do X”, and the coercion has nothing to do with chosen activity. It applies merely because you reside in this country or are a citizen.
The individual mandate falls into this third category of coercion. The federal government coerces you to act in specific ways (purchase health insurance) merely because you are a citizen. You cannot make a choice to forego certain activities and avoid the government coercion.
This is unprecedented. Until now, the only time the federal government has imposed such a flat out mandate is in the case of military conscription, jury service and census participation. Unlike the individual mandate, those mandates are all contemplated by the explicit language of the Constitution. (Military conscription is based on the power to declare war and raise armies found in Article 1, Section 8, Clauses 11 and 12; jury service is contemplated by the Sixth Amendment, which mandates a right to trial by jury in criminal trials; and the census is specifically called for in Article I, Section 2, Clause 3.) Those mandates are also all essential to the very existence of the federal government and therefore considered fundamental duties of citizenship. No one seriously argues that the private purchase of health insurance is essential to the very existence of the federal government and therefore is a fundamental duty of citizenship.
Mandates like the individual mandate are also vastly more intrusive than mere prohibitions. Imagine I tell you 100 things you may not do tomorrow. For example, you may not run on a treadmill, eat broccoli, buy a car, and 97 other things. While your liberty would be restricted, there would still be an infinite number of things you could do. Now suppose I tell you 100 things you must do tomorrow. You must run on a treadmill, eat broccoli, buy a car, and 97 other things. These 100 mandates could potentially occupy all your time and consume all your financial resources.
Some people claim the individual mandate isn’t unprecedented by citing various kinds of government coercion. You should pay close attention, though, to the examples they give. All of them involve what I call regulation of chosen activity. In other words, the government says, “If you choose to do X, you must do X in a certain way or must also do Y.” For example, if you choose to build a factory, you must install certain pollution control devices. These are not flat out mandates like the individual mandate.
Others argue that the power to mandate private purchases is really no different or more intrusive than the power to impose taxes. Both are claims on the fruits of your labor and therefore infringe on liberty. In one case, the government forces you to give money to the government. In the other, it forces you to give money to a private business. Either way, you are out-of-pocket the money.
But that argument ignores the differences between the two:
· We justify the infringement on liberty caused by taxation on the theory that taxes are essential to the very existence of government and, therefore, the payment of taxes is a fundamental duty of citizenship. That justification doesn’t apply to the individual mandate.
· And the framers of the Constitution clearly recognized this unique justification for taxation. Article I, Section 8 of the Constitution and the Sixteenth Amendment explicitly give Congress the power to impose taxes. If the Constitution were as explicit about Congress’ power to mandate private purchases, we wouldn’t be debating the issue today.
· In any event, the fact that we gave the federal government the power to impose taxes doesn’t in itself mean we gave it carte blanche to mandate the purchase of products or the payment of money to others. In fact, the history of the taxing power illustrates that one government power doesn’t automatically beget another. Even though the original Constitution explicitly permitted various forms of taxation, a constitutional amendment was still necessary for the government to tax income from dividends, interest and rents.
There’s one other important distinction worth noting. To one degree or another, there is an element of choice in taxation that often makes it a regulation of chosen activity rather than a flat out mandate. You have a choice whether to purchase and continue to own real property and therefore pay real estate taxes. You have a choice whether to invest in tax exempt bonds and avoid taxes on investment income. And you have a choice whether to spend your savings and avoid some or all of the estate tax. Admittedly, these choices have practical limitations, but they are still choices. In contrast, the individual mandate doesn’t involve any chosen activity. It applies merely because you are alive.
Third observation - Ultimately, the types of mandates at issue are inconsistent with the fundamental idea that underlies the theory of rights in the Declaration of Independence.
My final observation is that Professor Bryant’s vision of government is inconsistent with the fundamental idea that underlies the theory of rights in the Declaration of Independence - the idea that we own ourselves and, therefore, have the right to be left alone as long as we honor the equal right of others to be left alone.
Professor Bryant suggested in his Enquirer article that the idea of a right to be left alone supports the individual mandate. After all, he argues, people who fail to purchase health care insurance are imposing higher costs on others and violating their right to be left alone.
But since when do higher costs for things I choose to purchase violate my right to be left alone? And if that does violate some right I have, why is the solution to impose economic mandates that further intrude on my personal autonomy?
And Professor Bryant seems to assume that the Patient Protection and Affordable Care Act eliminates subsidies to people who currently don’t purchase health insurance. In fact, it just changes how subsidies get paid and apparently expands the number of people eligible for subsidies. Currently, uninsured consumers receive subsidies (largely from taxpayers) but only if they don’t pay their hospital bill. Under the Patient Protection and Affordable Care Act, people who meet certain tests and are below 400% of the poverty level receive subsidies (entirely from taxpayers) to purchase health insurance.
In any event, the point is that if the government can force us to pay money to a private company for the rest of our lives, and by logical extension, force us to buy a car or join a health club and perhaps force us to eat broccoli or exercise, we have strayed far from the vision of liberty at the heart of our system of government.
Does the individual mandate pass the “proper” test in light of the above analysis?
My analysis of the individual mandate can be summed up as follows:
Given these conclusions, is the individual mandate “proper” under the Necessary and Proper Clause? Specifically, is it consistent with the letter and spirit of the Constitution?
There are no Supreme Court decisions addressing whether economic mandates like the individual mandate meet this test, but that’s because they are novel and have never existed before.
There is precedent, however, that mandates on state governments are not proper. In the 1990’s, the Supreme Court held that certain federal mandates constituted an unconstitutional commandeering of the state legislatures. These included forcing state governments to take nuclear waste and mandating local sheriffs to run background checks on gun buyers. These cases were ultimately grounded in the Tenth Amendment, but that Amendment recognizes not just state sovereignty but also the popular sovereignty of the people.
Professor Randy Barnett of the Georgetown University Law Center makes a strong argument that the individual mandate fails the “proper” test, and I find it persuasive. If you’d like to read his argument, it’s part of a law review article he wrote that I’ve posted at www.IndianHillTeaParty.org.
He also points out that refusing to extend the commerce power to inactivity will not overturn any Supreme Court precedent and will affect only this one law. And extending the anti-commandeering doctrine to the people may be novel, but the individual mandate is itself novel, just as certain federal mandates on the states were novel before they were struck down.
The stakes are high.
To sum up, I believe the individual mandate crosses a threshold with significant implications and that it is time to acknowledge that and turn back. As Judge Vinson said in his opinion, “It is difficult to imagine that a nation which began, at least in part, as a result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place.”
I urge you to keep an open mind as you reflect on these issues. When there is broad public opposition to a law because people think it improperly intrudes on their lives, it is incumbent on our elected representatives and those of us in the legal profession to pay attention. The legitimacy of our system of laws depends on the consent of the governed. If we lose that, we put our legal system at risk.
Given the importance of this issue, vigorous debate is critical. I’d like to thank Professor Bryant and Dean Bilionis for giving me a chance to participate in this discussion and be part of that debate.
Jack Painter lives in Cincinnati, Ohio and is a corporate attorney. He is the founder of the Indian Hill Tea Party and on the board of the Ohio Liberty Council. He can be reached at firstname.lastname@example.org.