Commerce clause challenges to health care reform.

• Author: Hall, Mark A.

INTRODUCTION I. THE COMMERCE CLAUSE MAZE OF ARGUMENTS: A GUIDED TOUR A. Is Being Uninsured an Activity? B. Can the Commerce Power Extend to Inactivity? C. Should the Commerce Power Extend to Inactivity? D. The Slippery Slope Problem II. NAVIGATING THE NECESSARY AND PROPER CLAUSE A. Is the Mandate "Necessary" Enough? B. Does the Mandate "Carry into Execution" PPACA's Insurance Regulations? C. Is Regulating Inactivity "Proper"? 1. In General 2. Individual vs. Sovereign Rights III. LIMITLESS FEDERAL POWER CONCLUSION INTRODUCTION

When Congress drafted the Patient Protection and Affordable Care Act (PPACA), (1) Democratic lawmakers and most legal scholars had good reason to be confident of its constitutionality. (2) Under long-established precedent, Congress clearly has the authority, if wanted, to enact a single-payer socialized insurance system (3) using its powers to tax and spend for the "general welfare." (4) Far short of this, PPACA's complex blend of regulations, subsidies, and an individual mandate is vastly more protective of insurance markets and individual freedoms than any "Medicare for All" scheme would have been. The idea for an individual mandate originated with Republican lawmakers, who never questioned its constitutionality until now. (5) Congress has nearly unbridled authority to regulate products sold in or affecting interstate commerce, (6) and health insurance is clearly one such product. (7) Further, considering the well-understood economics of health insurance, (8) a mandate to obtain insurance is obviously part and parcel of regulating how insurers design, price, and sell their products.

Something went wrong on the way to the courthouse, however. District courts in Virginia and Florida have ruled that Congress lacks the constitutional authority to require legal residents to obtain health insurance. (9) Three other federal judges have upheld federal authority in cases that special interest groups and individual litigants brought. (10)

Despite the split outcomes (which fell along the party lines of the judges' appointing presidents), these courts agreed on several issues. No court thus far has found a violation of individual rights protected by the Bill of Rights, and no court so far has accepted (or indicated much support for) the government's position that Congress's tax power supports the mandate. (11) In Florida ex rel. McCollum v. U.S. Department of Health & Human Services, the Northern District of Florida rejected the states' arguments that forcing them to implement key PPACA provisions violates the Tenth Amendment. (12) Thus the Commerce Clause and the ancillary Necessary and Proper Clause will be the primary focus of ongoing litigation over the constitutionality of health care reform. Conservative legal scholars who have previously criticized the expansive scope of federal commerce power see in this litigation the opportunity to impose new limits on its capaciousness. (13) Accordingly, the Commerce Clause arguments merit close attention in order to understand their strengths, weaknesses, and implications for other areas of constitutional doctrine and public policy.

This Article begins with the narrow question of whether the Commerce Clause by itself allows Congress to mandate insurance, without regard to any other aspects of PPACA. I then consider whether compulsory insurance might also be justified by the Necessary and Proper Clause, in view of the broader context of what PPACA as a whole aims to achieve and how it is constructed. In brief, plausible arguments can be constructed on both sides of the first issue. The more persuasive positions are that a mandate to obtain insurance constitutes a regulation of commerce and the Commerce Clause's fundamental purposes do not compel limiting congressional authority to regulate inactivity simply for the sake of setting some limit. However, these issues are novel ones that lack controlling precedent, and reasoned arguments can be formulated to the contrary.

Despite uncertainty over the mandate in isolation, the conclusion is unavoidable that compulsory insurance is a "necessary and proper" component of PPACA's broader regulation of the insurance market, which is firmly grounded in the core of the conventional commerce power. Longstanding precedent clearly allows Congress to regulate how health insurers design, market, price, and sell their products, (14) and there is no substantial disagreement that PPACA's coverage mandate is essential for these unchallenged regulations to be effective. Therefore, the only plausible basis to reject the mandate is an argument that, for some independent reason, it is constitutionally "improper" to mandate insurance. But no such reason emerges. Following the Court's repudiation of Lochner jurisprudence, (15) there is no conceivable basis to argue that the Constitution specially protects an individual's freedom to be uninsured.

Moreover, two centuries of precedent under the Necessary and Proper Clause squarely permit other individual mandates or regulations of pure inactivity that are connected with a range of federal powers. (16) Slippery slope concerns are no greater here than for other longstanding federal powers, and a bar on any regulation of inactivity would preclude federal measures that might, someday soon, be desperately needed. For instance, authority under the commerce power to compel purchases or other actions could well be essential to combat a horrifically lethal pandemic. Unless the Court is willing to foreclose such authority and to overturn or contradict firmly established law, compulsory health insurance, albeit novel, sits comfortably within the full range of modern congressional powers.

1. THE COMMERCE CLAUSE MAZE OF ARGUMENTS: A GUIDED TOUR

   To begin with the sharpest attack, challengers pointedly deny that Congress has the power to regulate inactivity, claiming it has never before done so in the purest form. (17) Congress currently regulates many forms of inaction by those engaged in commercial activity, (18) such as requiring businesses to serve patrons without discrimination. (19) PPACA, however, mandates insurance based simply on the condition of being a lawful U.S. resident, without regard to any commercial activity. (20)

   Observe, first, that this point of attack employs the same strategy the Court explicitly rejected in Gonzales v. Raich, which upheld federal authority to ban medicinal use of home-grown marijuana. (21) There too challengers sought "to excise individual applications of a concededly valid statutory scheme" by "isolating a 'separate and distinct' class of activities that [they claimed] to be beyond the reach of federal power." (22) The Court "refuse[d]," as it "ha[d] done many times before," (23) to go along with this divide-and-conquer stratagem, holding instead that "comprehensive regulatory statutes" (24) must be judged as a whole and that a "subdivided class of activities" should not be separated for constitutional scrutiny if it is "an essential part of the larger regulatory scheme." (25) I return to this more integrated view later, but for now, I consider the challengers' arguments on their own terms (even though this approach is contrary to Raich's teaching).

   At the outset, there is no established basis for barring the regulation of economic inactivity. Instead, challengers point to the fact that the Court has always considered regulations that involve some type of activity. In doing so, the Court has never articulated, or even suggested, that inactivity is somehow foreclosed from general congressional authority over economic matters that relate to interstate commerce. Some leading precedents repeatedly stress the presence of "economic activity," (26) but the focus in all of these rulings has been on whether the subject matter is "economic" and not on how active or passive the enterprise in question is. "Activity" appears in various permissive or limiting phrases only because activity was what Congress actually regulated in these cases. There is not a breath of suggestion in these decisions that Congress may not reach economic inactivity. The Court simply has never been called upon to decide this issue. (27)

   1. Is Being Uninsured an Activity?

      The government's first response to this open issue is to avoid it. Its leading position, which three courts so far have endorsed, is that going without insurance is a decision that is sufficiently active to avoid needing to consider whether the commerce power includes inactivity. The action comes not just from a decision to avoid purchase, (28) but also from the ensuing consequence that those without insurance will pay for care out of pocket or receive care that others pay for. Factually, this is true. (29) But conceptually it is contestable that being uninsured is activity. In theory, failure to purchase many goods or services could be characterized as decisions to do something else instead. Not purchasing a car could be framed as a decision to walk, bike, or take public transport. (30) Thus, opponents ask why the commerce power could not he used to mandate the purchase of automobiles, or almost any other consumer good, in order to stimulate the relevant economic sector.

      "Aggregation theory" offers one way to parse this conceptual debate. Various Supreme Court decisions address whether wholly local activity is sufficiently part of a broader interstate market to justify aggregating local with interstate commerce. Home-grown wheat and marijuana meet the test, since, as Gertrude Stein reminds us, "a rose is a rose is a rose." (31) Thus, in Wickard v. Filburn and Raich, growing your own wheat or marijuana, rather than purchasing it, can be made a federal offense. (32) Challengers object that growing wheat or marijuana is an action, but so is seeking care without insurance. Just as federal regulation aggregated home-grown crops with purchased crops, so too might it aggregate purchasing care out of pocket with health...