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Individual Mandate: Constitutional issues

In our previous posts we have examined aspects of the legal challenges to the individual mandate and now shall consider some of the purported “constitutional” issues.

The Patient Protection and Affordable Care Act, P.L. 111-148, § 1501(b), 2010, as amended by the Health Care and Education Reconciliation Act of 2010, P.L. 111-152,

 § 1002, defines the “individual responsibility requirement.”  We shall examine this in relation to the Commerce Clause [Article I, Section 8, clause 3] and the General Welfare Clause [Article I, Section 8, clause 1, the power to tax and spend].

One finds a useful primer for this discussion the Congressional Research Service report written by J. Staman, et al., “Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis.”  It gives a history and the pertinent arguments.  Its reading provides a basic understanding of the subject. 

S. Rosenbaum and J. Gruber in their piece frame the “pivotal issue”: “ whose version of events will serve as the judicial analytical filter...the fight is over whether the mandate to purchase health insurance (or pay a tax) is about regulating individuals’ economic conduct or regulating their noneconomic status.”  Further, “...the law seeks to rationalize our economic behavior while providing the regulatory and subsidization tools to make this rationalization possible. To characterize the PPACA as a law aimed at anything other than individual economic conduct is to fundamentally miss the point of the legislation.”

In his recent Hastings Center Report L. O. Gostin argues: “The pivotal concern is that government will penalize individuals for failing to buy health insurance—for ‘doing nothing.’  Further, “The Supreme Court has interpreted the commerce power broadly, applying it to virtually every aspect of economic and social life.  An individual decision not to purchase health insurance, [critics] argue, has negligible economic consequences, with purely personal and intrastate impacts.”

He concludes, “Nothing could be further from the truth.  In terms of health, individuals never really ‘do nothing.’  Uninsured individuals self-insure, rely on family, and cost-shift to hospitals, the insured, and taxpayers.  The cumulative economic effects are vast.”

Indubitably, health insurance deals with economic transactions, and Congress can reasonably conclude that the economic activity it regulates has a substantial effect on interstate commerce.  Therefore, Congress has the power to legislate an insurance mandate using its Commerce Clause powers.  It should also be noted that the Constitution allows Congress to make all laws that are “necessary and proper for carrying into execution” its enumerated powers.  [Article I, Section 8, Clause 18]

U.S. District Judge Norman K. Moon, on 30 November 2010, granted the government’s request to dismiss a lawsuit brought by Liberty University, founded by Jerry Falwell.

He ruled: “For reasons provided below, I hold that Congress acted in accordance with its constitutionally delegated powers under the Commerce Clause when it passed the employer and individual coverage provisions of the Act, and I will dismiss...  Because I find that the employer and individual coverage provisions are within Congress’ authority under the Commerce Clause, it is unnecessary to consider whether the provisions would be constitutional exercises of power pursuant to the General Welfare or the Necessary and Proper Clause.”

He explains, “The conduct regulated by the individual coverage provision—individuals’ decision to forego purchasing health insurance coverage—is economic in nature, and so the provision in not susceptible to the shortcomings...” and  “The conduct regulated by the individual coverage provision is also within the scope of the Congress’ power under the Commerce Clause because it is rational to believe the failure to regulate the uninsured would undercut the Act’s larger regulatory scheme for the interstate health care market.”

J. M. Balkin, in his paper, states: “The term ‘individual mandate’ is is not actually a mandate.  It is a tax... It is a tax on events.”  He concludes, “...the textual argument for Congress’s authority under the General Welfare Clause is obvious and powerful.”

Gostin agrees [v.s.]: “The individual mandate is enforced through a federal tax, enabling Congress also to rely on its enumerated power to raise taxes for the general welfare.

The mandate is essential for expanding access—the raison d’être of health care reform.”

U. S. District Judge G. C. Steeh, in his earlier decision also stated that because “the Congress has the power under the Commerce Clause to enact the Health Care Reform Act, it is unnecessary for the court to address the issue of Congress’s alternate source of authority to tax and spend under the General Welfare Clause.”  However, he did address the plaintiffs’ challenge to “the constitutionality of the tax imposed by the Act as being an improperly apportioned direct tax.”

He wrote: “In this case, the minimum coverage provision of the Health Care Reform Act contains two provisions aimed at the same goal. Congress intended to increase the number of insureds and decrease the cost of health insurance by requiring individuals to maintain minimum essential coverage or face a penalty for failing to do so.  Because the “penalty” is incidental to these purposes, plaintiffs’ challenge to the constitutionality of the penalty as an improperly apportioned direct tax is without merit.”

Hence, the above challenges fail.

On 13 December 2010 U.S. District Judge Henry E. Hudson, a conservative Republican appointed to the bench by George W. Bush, ruled that the individual mandate  exceeds the regulatory authority granted to Congress under the Commerce Clause while declining the plaintiff’s request to halt the implementation of the law pending appeal.  This is the third determination by a district court judge and the first to invalidate any portion of the PPACA.

He writes: “No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding it effect on interstate commerce.”

He further states: “On careful review, this Court must conclude that section 1501 of the Patient Protection and Affordable Care Act—specifically the Minimum Essential Coverage Provision—exceeds the constitutional boundaries of congressional power.”

He orders: “In the final analysis, the Court will grant Plaintiff’s Motion for Summary Judgment and deny Defendant’s similar motion.  The Court will sever Section 1501 from the balance of the ACA and deny Plaintiff’s request for injunctive relief.”

One must note that there have been demands that Hudson recuse himself from this case, as he owns stock in a campaign consulting company, Campaign Solutions, Inc., which has done work for the Republican National Committee and other conservative groups.  Cuccinelli, the principal in this lawsuit, paid that company some $9,000 for work both this and last year.  Such facts confirm that this entire process is not a quest for constitutional clarification but merely a brazen and unprincipled, partisan political assault.

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