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Michael C. Dorf

The Constitutionality of Health Insurance Reform, Part II: Congressional Power


Monday, November 2, 2009

Although many key details remain to be negotiated, Congress appears poised to enact some substantial reform of American health care that will build on, rather than replace, our patchwork of government, private, and non-profit insurance. The bill that the President signs will likely contain, among other things, an "individual mandate" requiring that everyone obtain health insurance or face a financial penalty. Would such a mandate be constitutional?

In my last column and an accompanying blog entry, I considered and rejected the objection that an individual mandate would be an unprecedented burden on liberty because it would affirmatively direct conduct, rather than either forbidding conduct or imposing affirmative obligations on only those who engage in conduct that the government has the power to forbid. As I explained, there are substantial precedents for such affirmative obligations and even if there were not, there is no reason in principle why an affirmative duty is a greater restriction on liberty than a prohibition or condition.

In this column, I consider a different objection to the individual mandate: the claim that the federal government lacks the authority under the Constitution to impose the mandate or to penalize those who do not comply. As I explain, this objection is also unsound as a matter of constitutional law. I conclude, however, that individual members of Congress ought to decide for themselves whether regulating health care in the manner of the proposed bills is an appropriate job for the federal government, or instead should be left to state regulation or the market.

Is a Regulation of Health Care a Regulation of Interstate Commerce?

Under the Tenth Amendment, Congress may only enact legislation that falls within one or more of its enumerated powers. Most of those powers--and all of the powers that are potentially relevant in the health insurance reform debate--are found in Article I, Section 8. From the very earliest days of the Republic, there has been controversy about the scope of those powers.

Consider, for instance, that the Constitution does not expressly grant Congress the power to charter a bank. Accordingly, President George Washington asked two of his Cabinet members to prepare memoranda on whether that power could nonetheless be inferred from the powers that are enumerated in the Constitution--including the powers to regulate interstate and foreign commerce, to coin money, to lay and collect taxes, to spend money for the general welfare, and to enact such laws as are "necessary and proper for carrying into execution the" specifically enumerated powers.

Arguing for a position that would today be called "states' rights," Thomas Jefferson said no. The enumerated powers had to be construed narrowly, he said, or else the federal government would completely overshadow the states. Alexander Hamilton disagreed, however. He explained that in order to carry out the powers it was expressly granted, Congress must have implied powers. Washington sided with Hamilton and, years later, in the landmark 1819 case of McCulloch v. Maryland, so did the Supreme Court.

At various points in American history, politicians and judges have flirted with the Jeffersonian view, but for the most part, the Hamiltonian position has prevailed, especially with respect to laws purporting to regulate interstate commerce. Thus, under the Supreme Court's 1942 decision in Wickard v. Filburn, Congress can forbid a farmer from growing more wheat than his federal quota allows on the theory that if he does not grow wheat, he will purchase it, which will affect the interstate market.

Likewise, in the 2005 case of Gonzales v. Raich, the Court said that in the course of regulating the national illegal market in marijuana, Congress could forbid the intrastate, noncommercial production and consumption of medical marijuana, even if it is legal under state law. The Court explained that Congress legitimately worried that making an exception to the general prohibition on marijuana use for medical marijuana use that is authorized by state law could substantially undermine the government's ability to police other marijuana production, distribution, and possession.

That same logic applies to the individual mandate in the health insurance context. As I explained in my last column, the main point of the individual mandate is to ensure that insurance companies cover people even though they have pre-existing conditions. Without the individual mandate, however, many young, healthy people would decline insurance until they got sick, creating a severe adverse selection problem. Thus, the individual mandate is closely connected with the regulation of health insurance, just as the Court said in Raich that the regulation of marijuana that is used for medical purposes is closely related to the regulation of the broader market for marijuana.

Health care is an enormous interstate business. It therefore counts as interstate commerce, regulable by Congress. Just as, in Raich, Congress acted constitutionally by declining to exempt individual acts of noncommercial intrastate marijuana possession from the Controlled Substances Act, so too Congress would act constitutionally by including an individual mandate within the ambit of its regulation of health care.

Is Existence an "Economic Activity"? That's the Wrong Question

Skeptics nonetheless point to two Supreme Court cases--the 1995 ruling in United States v. Lopez and the 2000 decision in United States v. Morrison--as grounds for the conclusion that the individual mandate would be beyond the power of Congress under the Commerce Clause. In Lopez, the Court invalidated a federal criminal law forbidding possession of a firearm near a schoolyard. In Morrison, the Court rejected a federal law providing victims of gender-motivated violence with a right to sue their attackers. Both decisions reasoned that Congress typically cannot regulate "noneconomic" intrastate activities on the ground that they affect interstate commerce.

Accordingly, lawyers David Casey and Lee Rivkin, writing in The Washington Post in August, concluded that Lopez and Morrison make the Commerce Clause unavailable as a source of congressional power for the individual mandate because a human being's mere existence is not a form of economic activity. Indeed, they might have added, existence is not an activity at all.

Although the issue is not entirely free from doubt, I do not think that Casey and Rivkin have correctly read the precedents. In Lopez and Morrison, Congress sought to prohibit activities--firearms possession near schools and gender-motivated violence, respectively--that were not, according to the Court, "economic." In those two cases, it was only by several logical inferences of the handbone-connected-to-the-wristbone-wristbone-connected-to-the-elbow-bone sort that one could move from the regulated activity to an effect on commerce. For example, in Lopez, the theory went as follows: Guns near schools intimidate children; intimidated children have a hard time concentrating on their studies; they learn less; they then grow up to be less productive members of society; and thus the national economy suffers. Even though each link in this chain is plausible, the Lopez majority reasoned that if the Court were to allow this sort of inferential process, then virtually anything would count as a regulation of interstate commerce. Acknowledging that congressional power under the Commerce Clause is very broad, the Court in Lopez and Morrison nonetheless insisted that it is not infinitely broad.

By contrast with the laws that were invalidated in Lopez and Morrison, the individual mandate is quite close to the core of the Commerce Clause. Treating the mere existence of a human being as the predicate of regulation in the health care bills would miss the point. Whereas the Gun Free School Zones Act in Lopez and the civil remedy provision of the Violence Against Women Act in Morrison sought to discourage certain conduct, the point of the individual mandate is to encourage certain conduct. And crucially, the conduct the individual mandate seeks to encourage is quintessentially economic: It is the purchase of a service, namely health insurance.

Does Congress have the power to encourage people to engage in market transactions? Of course it does. That, after all, was the whole point of the law upheld in Filburn: By limiting the amount of wheat that farmer Filburn could grow, the government sought to encourage him to buy compensating amounts on the market. As the unanimous Court explained in a ruling that the more recent cases expressly reaffirm: "The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon."

In the end, then, the argument of Casey, Rivkin, and others who oppose the individual mandate on Article I grounds amounts to no more than the assertion that the Constitution forbids Congress from using the most direct means of encouraging market activity: a mandate that individuals do so. But there is nothing in the text or history of the Constitution to support that conclusion.

Indeed, the Ur-decision about Article I power, McCulloch, says the exact opposite: "Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional."

As we have seen, the individual mandate is "plainly adapted" to the undoubtedly legitimate end of regulating the enormous and enormously important health-care sector of the national economy. It is therefore constitutional.

The Taxation Power

In light of the broad interpretation the Supreme Court has given to the enumerated powers of Congress, an Act may be justified on more than one constitutional ground. Thus, the individual mandate could alternatively be upheld as a valid exercise of the Article I power to "lay and collect taxes, duties, imposts and excises," as bolstered by the Sixteenth Amendment's authorization of an income tax. After all, in most versions of the individual mandate, Americans are not literally required to purchase health insurance: Instead, they are told to pay a tax from which they can be exempted if they have health insurance.

To be sure, as Casey and Rivkin observe, a 1922 case, Bailey v. Drexel Furniture Co., holds that Congress may not use taxation as a pretext for accomplishing a regulatory objective that it could not accomplish directly. But subsequent cases upholding "occupational taxes" on businesses that Congress clearly intended to discourage, have made clear that a tax that serves a revenue-raising purpose is not invalid simply because it also serves a regulatory purpose. And there is no doubt that the tax on uninsured income earners would serve a valid revenue-raising purpose--namely, to defray the costs of subsidizing health insurance for those who could not otherwise afford it.

Thus, even if Congress lacked the power to adopt the individual mandate under the Commerce Clause, the taxing power would separately authorize a properly-worded tax on the uninsured, despite its regulatory impact.

Federalism in Congress: Its Members, Too, Can Consider the Constitutional Dimensions of Legislation

The foregoing analysis shows why an individual mandate would be upheld against a court challenge, so long as the courts faithfully apply the current Supreme Court precedents. Nonetheless, members of Congress are entitled--indeed, some might say they are obligated--to reach their own constitutional judgment about any bill that comes before them. And that is especially true when there is a question about the proper role of the federal government and the states.

In its cases involving challenges to congressional power, the Supreme Court has sometimes said that the broad deference given to Congress arises out of institutional concerns: Except in extreme cases, the Justices lack the fact-finding capacity and democratic legitimacy to make all of the fine-grained judgments about what matters should be federalized and what matters should be best left to the states. In the words of the late constitutional law scholar Herbert Wechsler, the Court relies on "the political safeguards of federalism" to do most of the work of ensuring a constitutional balance between national and state regulation.

Wechsler pointed to a variety of ways in which the interests of the states are represented in Congress itself. Chief among these are the facts that each state has two Senators, and that electoral districts respect state lines. In addition, as Stanford Law School Dean Larry Kramer has noted in more recent scholarship, the national political parties tie members of a state's congressional delegation to state politicians. Taken together, these and other mechanisms ensure that Congress will not simply federalize everything, leaving no area of regulatory discretion to the states.

Wechsler's point was mostly descriptive: Congress, he said, would in fact take account of state interests. But we might add a normative dimension: Congress should take its constitutional role seriously in matters of federalism, because judges are going to be highly deferential in such matters if and when federal statutes are constitutionality tested.

Accordingly, it would be perfectly appropriate for one or more members of Congress to vote against the individual mandate or health care reform more broadly on the ground that they think such matters should be left to state regulation or to private decision makers. But it would be equally appropriate for Congress to conclude otherwise and thereby join the ranks of the other industrialized countries--including those, like Canada and Germany, with robust commitments to federalism--that have comprehensive national health care systems. Properly understood, the constitutional case law is no obstacle.

Michael C. Dorf, a FindLaw columnist is the Robert S. Stevens Professor of Law at Cornell University. He is the author of No Litmus Test: Law Versus Politics in the Twenty-First Century and he blogs at

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