The commerce clause implications of the individual mandate under the Patient Protection and Affordable Care Act.

• Author: Weeden, L. Darnell

I. INTRODUCTION II. THE ARGUMENT THAT THE DECISION NOT TO PURCHASE HEALTH INSURANCE IS NOT TO BE TREATED AS AN ECONOMIC ACTIVITY BECAUSE IT IS NOT CONNECTED TO ECONOMIC RISK-TAKING SHOULD BE REJECTED AS A DENIAL OF ECONOMIC REALITY AT THE PRACTICAL INTERACTIVE MARKETPLACE LEVEL III. ON NOVEMBER 14, 2011, THE SUPREME COURT DECIDED TO HEAR A CASE FROM FLORIDA OBJECTING TO THE INDIVIDUAL MANDATE AS AN UNCONSTITUTIONAL VIOLATION OF THE COMMERCE CLAUSE: WHY THE SUPREME COURT SHOULD REVERSE THAT CONCLUSION IV. CONCLUSION I. INTRODUCTION

In an effort to protect the national economy from the economic burden created by the expanding cost of healthcare, congress enacted legislation under the commerce clause (1) to compel or mandate specific people to engage in the economic activity of purchasing health insurance. (2) On June 28, 2012, four months after the primary focus of my Article was written, the Supreme Court held in National Federation of Independent Business v. Sebelius (3) that the federal mandate to buy private health insurance in the Patient Protection and Affordable Care Act (PPACA) is an unconstitutional exercise of the power of congress to regulate commerce. The individual mandate violates the commerce clause because it does not regulate existing commercial activity. (4) The mandate compels individuals to become active in commerce by buying a product, on the basis that their failure to do so affects interstate commerce. (5) Interpreting the Commerce Clause to allow Congress to regulate individuals specifically because they are doing nothing would release a new and potentially unlimited domain to congressional authority. (6)

PPACA's compulsion that particular individuals pay a financial penalty for not acquiring health insurance may reasonably be described as a tax. (7) Since the Constitution authorizes such a tax, it is not the role of the Supreme Court to forbid it, or to decide its wisdom or fairness. (8) Because the Federal Government does not have the power to command people to buy health insurance under the commerce clause, Section 5000A's individual mandate is not a valid exercise of the Commerce Power by Congress. However, Congress does have the power to impose a tax on those without health insurance and, therefore, the individual mandate is a valid and constitutional exercise of the power of Congress under the Taxing Clause. (9)

The Obama administration contends the individual mandate is "absolutely intertwined" with PPACA provisions prohibiting insurers from rejecting applicants as well as prohibiting insurers from taking into account an applicant's pre-existing conditions. (10) The fundamental focus of this Article is whether the decision not to buy individual health insurance as required by congress also qualifies as valid economic activity under the Commerce Clause. This question before the Court continues the modern battle regarding the scope of Congress's power under the Commerce Clause, and the battle regarding the regulation of economic activity continues, irrespective of the Supreme Court decision regarding PPACA, because of the continuing impact of the Supreme Court's holding in United States v. Lopez. (11)

In Lopez, the Court held that because a Gun Free School Zone Law went beyond the scope of Congress's power under the Commerce Clause, it was unconstitutional. (12) In a dissenting opinion in Lopez, Justice Souter correctly warned that it would be a serious mistake to think of the Supreme Court's holding as an insignificant event in Commerce Clause law. (13) Justice Souter appropriately articulated a position saying that the holding in Lopez could be the foundation for a substantial rollback of the commerce power that could endanger a world of federal commerce power, which his generation had continuously experienced. (14) However, Professor Richard Primus argues that the day of the big commerce clause rollback has not come. (15) From both a doctrinal and political perspective, all the drama regarding the Supreme Court's applicability of the Commerce Clause to PPACA is about whether now is the right time for the federal judiciary to rollback the commerce clause power of Congress. (16)

The fact that the Supreme Court initially scheduled five and a half hours of oral arguments in place of the standard one-hour is evidence of the significance of PPACA case, and the Court's judgment, only a few months afterwards, offered many insights and challenges to the presidential contenders and candidates in the fight for power in Congress. (17) The Obama White House, which requested the Supreme Court to review the case immediately as opposed to later, contended that the challenges to the PPACA and its individual mandates are similar to those that confronted Social Security, the Civil Rights Act, and other very important parts of progressive social legislation. (18) The Supreme Court then announced on December 19, 2011 that it scheduled three days in March of 2012 to consider arguments that challenged the constitutionality of PPACA. (19)

On March 26, 2012, the Court proceeded by listening to arguments involving the issue of whether the federal Anti-Injunction Act creates a situation where a court dispute regarding the individual mandate, like the one within PPACA, is an untimely challenge if brought prior to 2015. (20) The court scheduled two hours on March 27, 2012 to hear arguments on the most important issue in the litigation--whether Congress went beyond its constitutional authority by compelling most Americans under PPACA's individual mandate to buy health insurance or opt out of buying health insurance and be assessed a fee. (21) The Court scheduled arguments involving two issues for March 28, 2012.22 Initially, the Court contemplated for ninety minutes whether PPACA's individual mandate can be segregated from the rest of PPACA. (23) Next, the Court scheduled an hour of argument on March 28, 2012 to determine whether Congress may enlarge the size and range of Medicaid. (24) The dominant and most plausible explanation for the Supreme Court granting five and one-half hours for three consecutive days in March 2012 for oral arguments regarding the constitutionality of the PPACA is because the Court is seriously considering how to justify a rollback of enumerated commerce power of Congress on an issue of market place social justice.

PPACA requires an individual, under specific circumstances, to either purchase health insurance or make a payment for a failure to acquire health insurance. (25) Professor Mark Hall contends the more convincing arguments in the individual mandate battle support the conclusion that a congressional directive that encourages individuals to obtain healthcare insurance is a permissible regulation of Congress's commerce power under the Commerce Clause. (26) The Commerce Clause allows Congress to regulate the economic marketplace involving the commercial enterprise of healthcare insurance coverage or healthcare services. (27) In U.S. v. South-Eastern Underwriters Association, the Supreme Court articulated that "[n]o commercial enterprise of any kind which conducts its activities across state lines has been held to be wholly beyond the regulatory power of Congress under the Commerce Clause. We cannot make an exception of the business of insurance." (28) The interstate market for individual healthcare coverage without an individual mandate, and regulated under state and local laws, creates an undue burden on the national economy. (29) Therefore, an individual's decision not to purchase healthcare coverage through an insurance policy should be treated as a commercial enterprise. (30)

Congress may utilize its historical regulatory power under the Commerce Clause to eradicate the undue burden on the national economy created by requiring all American's to purchase healthcare insurance that contains an individual mandate. (31) The requirement to purchase healthcare insurance coverage or to pay a fee to the government helps to control costs of healthcare in the interstate market by increasing the pool of healthy, insured individuals. (32) The Supreme Court's duty when it applied the Commerce Clause to PPACA was to keep the power to regulate interstate commercial risks among the states in the hands of Congress, because the power to regulate interstate commercial risks "is vested in the Congress, available to be exercised for the national welfare as Congress shall deem necessary." (33) For one to refuse to purchase healthcare insurance is in reality a commercial venture because that individual's decision cannot be separated from an aggregate burden on the national healthcare service market. (34) Under the rationale of United States v. South-Eastern Underwriters Association, Congress may use its Commerce Clause power to regulate the healthcare insurance market, and therefore promoting national welfare in healthcare services by making healthcare more affordable under PPACA. (35)

The collective impact of the refusal to purchase health insurance in the healthcare market creates an undue burden on the national economy. (36) Since 1824, the Supreme Court in Gibbons v. Ogden understood the regulatory nature of the Commerce Clause power vested by the Constitution to Congress, giving Congress the power to prescribe the rule by which commerce is to be governed for the purpose of protecting our national economy. (37) Because the individual health insurance mandate requirement is a plausible means of protecting our national economy, the regulatory power of the Commerce Clause allows Congress to prescribe the rules by which healthcare service is to be paid for by individuals. (38) A reasonable interpretation of the United States Supreme Court's analysis in United States v. Darby (39) strongly suggests that the individual healthcare mandate issue presented under PPACA is neither original nor fresh. (40) In Darby, the Supreme Court again articulated its historically correct view that the...