Four constitutional limits that the minimum coverage provision respects.

Author:Siegel, Neil S.
 
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JUSTICE O'CONNOR: If this is covered, what's left of enumerated powers? What is there that Congress could not do, under this rubric, if you are correct?

GENERAL DAYS: Justice O'Connor, that certainly is a question that one might ask, but this Court has asked that question in a number of other circumstances, and rather than starting from the assumption that something was inherently local, it's looked at the degree to which Congress had a reasonable basis for extending its authority under the commerce power to regulate that particular activity. (1)

INTRODUCTION

The minimum coverage provision in the Patient Protection and Affordable Care Act (ACA) (2) requires most people lawfully living in the United States to obtain a certain level of health insurance coverage or pay a certain amount of money each year. (3) Constitutional critics of this "individual mandate" fall into two categories. Some critics make the sweeping assertion that if Congress can impose a mandate to obtain health insurance coverage, then Congress can impose any mandate--indeed, any Commerce Clause regulation--it wants on Americans, so that there is nothing left of the constitutional principle of a national government of limited, enumerated powers. Less implausibly, other critics insist that even if upholding the minimum coverage provision would not mean Congress could impose any mandate or other regulation it wants on Americans, Congress could at least impose whatever "economic" mandates it wants, including federal requirements to purchase specific kinds and quantities of food, transportation, housing, and insurance.

Supporters of the ACA tend to defend the minimum coverage provision by showing that its constitutionality follows from a correct application of contemporary doctrine concerning the Commerce Clause, the Necessary and Proper Clause, or the tax power. (4) These demonstrations are sufficiently persuasive that a number of prominent conservative jurists or scholars have deemed decisive at least one doctrinal argument in favor of the minimum coverage provision. (5) The Supreme Court of the United States, however, can change the governing doctrine. Accordingly, such demonstrations alone may not suffice to persuade five Justices to uphold the minimum coverage provision. For the provision to survive the Court's likely review in the wake of its invalidation by the United States Court of Appeals for the Eleventh Circuit, (6) defenders of the ACA's constitutionality may need to identify principled, judicially enforceable limits on the scope of Congress's enumerated powers that the minimum coverage provision respects. (7)

So far, however, the federal government's briefs shy away from endorsing specific limits on the Commerce Clause beyond what the Supreme Court itself has identified. (8) If anxiety about unlimited federal power attracts the attention of five Justices, they will take a hard look at what the government's limiting principles are.

The present situation brings to mind the oral argument in United States v. Lopez. (9) The Justices asked Solicitor General Drew Days a series of direct questions about the limits of the Commerce Clause. In response, General Days was unable or unwilling to identify a single hypothetical regulation that was beyond the scope of the commerce power. (10) Folk lore has it that his nonresponsive answers contributed to the federal government's 5-4 loss. (11) Whether or not that is true, his exchanges with the Court could not have helped the government's case.

In this essay, I identify four principled and judicially enforceable limits on the scope of the Commerce Clause that counsel upholding the constitutionality of the minimum coverage provision in the ACA. Under the restrictions imposed by these limits, Congress may not use its commerce power: (1) to regulate noneconomic subject matter; (2) to impose a regulation that violates constitutional rights, including the right to bodily integrity; (3) to regulate at all, including by imposing a mandate, unless it reasonably believes that the regulation will ameliorate a significant collective action problem involving multiple states; or (4) to impose an economic mandate unless it reasonably believes that other regulatory means would be less effective or more coercive.

The first two limits are firmly established in the jurisprudence of the Supreme Court. The third limit has been developed by an increasing number of scholars whose work understands the Commerce Clause in light of the collective action problems that the nation faced under the Articles of Confederation, when Congress lacked the power to regulate interstate commerce. (13) The fourth limit--a restrained inquiry into the coerciveness and efficacy of the regulatory alternatives available to Congress--I articulate here. Although I do not endorse such a limit, its imposition would have a sounder constitutional basis than the interpretive mistake of invalidating the minimum coverage provision on the broad ground that Congress may never regulate "inactivity" using its commerce power, either alone or in combination with the Necessary and Proper Clause. From McCulloch v. Maryland (14) to United States v. Comstock, (15) the Court has understood Congress to possess ample means to pursue its constitutionally enumerated ends. Therefore, any concerns about the coerciveness of regulating "inactivity" should be balanced against the relative efficacy and coerciveness of regulating through other means.

If the proffered distinction between inactivity and activity resonates with the Court, then the outcome of the ACA litigation may turn on whether approving the minimum coverage provision means approving any mandate that Congress might theoretically impose (no matter how politically unlikely). The minimum coverage provision is constitutionally distinguishable from many other potential mandates for at least four reasons. First, the subject matter regulated by the provision is economic in nature. Second, the provision violates no constitutional rights. Third, Congress reasonably concluded that the provision would help to solve a significant problem of collective action among the states caused by cost shifting and adverse selection in the health care and insurance markets. Fourth, Congress reasonably concluded that no alternative to the minimum coverage provision would be as effective and less coercive.

Part I identifies why the minimum coverage provision regulates economic subject matter. Part II discusses why the provision does not violate constitutional rights. Part III explains why the provision is unlikely to be saved by the invocation of political limits on the power of Congress to impose mandates. Part IV clarifies why Congress had a reasonable basis to conclude that the minimum coverage provision would ameliorate a significant problem of collective action among the states. Part V addresses why Congress had a reasonable basis to conclude that regulatory alternatives to the provision would be less effective or more coercive.

Part VI uses these four limits on the scope of the Commerce Clause to illuminate the constitutional pertinence of five characteristics of the interstate health care market that economists have identified as distinguishing it from other markets: the inevitability of access, the unpredictability of access, the potentially enormous cost of care, the legal entitlement to care in an emergency, and the substantial cost shifting and adverse selection problems that disrespect state borders. The Conclusion summarizes the four judicially enforceable limits on Congress's commerce power that are either presently in place or potentially available, all of which will be maintained if the Court upholds the minimum coverage provision in the ACA.

  1. LIMIT #1: NO NONECONOMIC MANDATES

    The most aggressive critics of the ACA insist that if Congress can require people to obtain health insurance coverage or pay a certain amount of money each year, then Congress can impose on individuals whatever requirements it wants by invoking its commerce power. (16) They further insist that if Congress can regulate whatever it wants by invoking its commerce power, then there is nothing left of judicial enforcement of constitutional limits on Congress's enumerated powers.

    The conclusion follows from the premise, but the premise is incorrect. The decision whether or not to purchase health insurance is an economic decision. Because the need for nearly all people to access health care services is unavoidable, unpredictable, and legally guaranteed in medical emergencies, and because the cost of such access is potentially crushing even for wealthy individuals who lack insurance, (17) the decision whether or not to obtain health insurance coverage is a decision about how to manage substantial financial risk. Financially able individuals who decline to purchase health insurance are making the economic decision to "go bare" with respect to the risk of serious injury or illness.

    In insurance law, the phrase "going bare" is used to describe the conduct of a business enterprise that chooses to be uninsured, or severely underinsured, regarding a risk. Such an enterprise is making the economic decision to self-insure, relying either on personal resources or on the protections afforded by federal bankruptcy law in the event the risk materializes. (18) Businesses that persist in going bare are sometimes described as engaging in conduct that entails potentially high economic risk to themselves and others. (19) If bankruptcy results, substantial costs associated with this financial risk will be shifted to creditors. (20)

    The economic nature of the decision whether or not to purchase health insurance means that upholding the minimum coverage provision would not require revisiting the requirement of United States v. Lopez, United States v. Morrison, and Gonzales v. Raich that Congress may regulate only "economic" or "commercial" subject matter when...

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