Is mandated health insurance Constitutional?

James Madison

Along with the economic arguments against the health care bills circulating Congress, is a fascinating exposition of the legality of mandated health care.  An article by two former Justice Department officials from the Reagan and Bush I administrations, David Rivkin and Lee Casey, posed this very question in The Washington Post this summer,  “… can Congress require every American to buy health insurance?  In short, no.  The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it.” ¹

Supporters of the mandate argue that Congress’ power issues from the “Commerce Clause”, Article 1 Section 8 of the Constitution: “To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;”  It is the second part upon which Congress relies not only to regulate health insurance as “interstate commerce”, but to mandate its consumption.  There is an important distinction, though, between regulating a market and obligating citizens to participate in it.   In addition, Rivkin and Casey observe the Supreme Court frowns on Congress' application of the Commerce Clause to regulate non-economic activity: “... in two key cases, United States v. Lopez (1995)² and United States v. Morrison (2000)³, the Supreme Court specifically rejected the proposition that the commerce clause allowed Congress to regulate noneconomic activities merely because, through a chain of causal effects, they might have an economic impact”.  Even in these two cases the United States attempted to regulate or proscribe action, not mandate activity, which is much higher threshold.   

Since our nation’s founding, application of the Commerce Clause has been deracinated from its original intent.  James Madison, in Federalist Paper No. 42, argues that the Commerce Clause was written primarily to allow Congress to regulate foreign commerce, and that the interstate clause precludes the circumvention by individuals and states of foreign treaties or duties: “… it may be added that without this supplemental provision [regulation of interstate commerce], the great and essential power of regulating foreign commerce would have been incomplete and ineffectual.” ⁴  One can only fantasize about this debate: Resolved, the proposed mandate for all Americans to buy health insurance fulfills the Framers’ intention to regulate foreign commerce.  For the affirmative, Nancy Pelosi.  For the negative, James Madison.

Carson Holloway writes in the Witherspoon Institute’s Public Discourse: Ethics, Law, and the Common Good, “… Rivkin and Casey have performed an important public service by raising this kind of argument. For it is no small measure of the corruption of our public discourse that most political leaders and citizens no longer ask what constitutional provisions, if any, authorize Congress to act when some of its members propose to ‘solve’ some national ‘problem.’ ” ⁵ 

Holloway thus reminds us that Congress’ power is limited by the Constitution.  This is explicit in the 10^th Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”  Pelosi’s office tried to preempt 10^th Amendment arguments, but in the most tortured way imaginable: “The 10th amendment does not authorize states to constrict Congress’ power under the commerce clause.” ⁶  This is backwards.  States do not constrict Congress’ power; rather the Constitution constricts all powers not authorized specifically to Congress and affords them to the states and to the people.  Have we forgotten about people's  individual liberty and free choice in this debate?

And yet we have seen this before.  In 1994 during the debate on Clinton’s health plan, the Congressional Budget Office concluded, "A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action.  The government has never required people to buy any good or service as a condition of lawful residence in the United States.  An individual mandate would have two features that, in combination, would make it unique.  First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government." ⁷  This was prior to the Lopez and Morrison decisions, so one would think that the CBO would be more cautious today, but, alas, they are curiously silent on the matter.

The legal arguments portend philosophical differences that are striking and ominous if the people allow Congress to stretch the Constitution to the breaking point.  We have a tradition of giving incentives to encourage positive behavior and of instituting regulation to prevent harmful behavior.  The mandated approach to health care turns this tradition upside-down: it institutes regulation to force positive behavior while creating incentives to encourage negative ones; to wit, if businesses see the mandate, taxes and penalties in these bills as added costs, they will have economic incentive to invest in overseas markets over the United States.  The mandate is an accretion that may have the unintended effect of leaving more workers without health care or on the “public option”.

How, then, to solve the problem and make health insurance more accessible and affordable?  The answer lies in the correct application of the Commerce Clause.  In 2002, legal scholar and former Appeals Court Judge Robert Bork and former Chief Counsel for the Food and Drug Administration Daniel Troy analyzed the devolving of the Commerce Clause through Supreme Court cases over the years and concluded, “ … the purpose of the Commerce Clause was to remove barriers to interstate commerce, and that the original understanding of the Clause permits federal regulation of the purchase and sale of goods in commerce to address barriers created by discriminatory or inconsistent state laws.” ⁸ 

Removing barriers is certainly a better idea than obliging purchase from state-sanctioned oligopolies (private insurers) or a federal monopoly (public option).  The proper application of the Commerce Clause is to open the barriers erected by the states that prevent an interstate market in insurance.  Encouraging everyone to buy health insurance is a salutary objective.  Making it easier and less costly through free markets and personal choice is in keeping with American tradition and Constitutional limits on power.

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[1] Rivkin, David B., Jr. and Casey, Lee A. “Illegal Health Reform”, The Washington Post, 22 Aug. 2009 http://www.washingtonpost.com/wp-dyn/content/article/2009/08/21/AR2009082103033.html

[2] United States v. Lopez, 514 U.S. 549 (1995) http://www.law.cornell.edu/supct/html/93-1260.ZS.html

[3] United States V. Morrison, U.S. 598 (2000) http://www4.law.cornell.edu/supct/html/99-5.ZS.html

[4] Madison, James. “The Federalist No. 42, The Powers Conferred by the Constitution Further Considered”, 22 Jan. 1788, http://www.constitution.org/fed/federa42.htm

[5] Halloway, Carson. “Constitutional Questions About Health Care Reform” 1 Sep. 2009 http://www.thepublicdiscourse.com/2009/09/827

[6] Pelosi, Nancy. “Health Insurance Reform Daily Mythbuster: 'Constitutionality of Health Insurance Reform'. “ Office of the Speaker of the House, 16 Sep. 2009, http://www.speaker.gov/newsroom/factcheck?id=0107

[7] Congressional Budget Office, “The Budgetary Treatment of an Individual Mandate to Buy Health Insurance.” August 1994  http://www.cbo.gov/ftpdocs/48xx/doc4816/doc38.pdf

[8] Bork, Robert H. & Troy, Daniel E. “Locating the Boundaries: The Scope of Congress's Power to Regulate Commerce”, 10 Apr. 2002 http://www.constitution.org/lrev/bork-troy.htm