[UPDATE: Prof. Elhauge responds, in an UPDATE added at the end of this post.]
I don’t have a lot to add to the exchange between Einer Elhauge and Randy Barnett on the 1790s laws that Prof. Elhauge identifies as “mandates” that are sufficiently akin to the individual health insurance mandate. But I did want to say something about a particular example Prof. Elhauge gives,
[I]n 1798, Congress addressed the problem that the employer mandate to buy medical insurance for seamen covered drugs and physician services but not hospital stays. And you know what this Congress, with five framers serving in it, did? It enacted a federal law requiring the seamen to buy hospital insurance for themselves. That’s right, Congress enacted an individual mandate requiring the purchase of health insurance. And this act was signed by another founder, President John Adams
As David Kopel noted two years ago, this law (which I quote below) actually looks a lot like a payroll tax, earmarked for health care, not a mandate to buy health insurance. Ship owners were required to pay a flat sum to the government for each sailor, which they could deduct from the sailor’s wages, and the money would go to fund a local hospital for injured and disabled sailors. But nothing in the statute suggested — as would be the case with a requirement to buy insurance — that the sailor must present some proof of payment when he shows up at a hospital, or that the sailor would be penalized for refusing to pay. (A ship owner could be fined for refusing to pay the money, but that sounds like a normal fine for nonpayment of a tax.)
So, as David mentioned two years ago, I don’t see this as a precedent for a mandate to buy insurance; it’s just one of a long line of taxes imposed on economic activity (here, the employment of seamen). It taxed all seamen for the benefit of all seamen. It did not require anyone to buy anything; rather, it required a ship owner to pay money to the government, which seems like a tax to me.
As I’ve noted before, I think the individual mandate is likely a permissible exercise of Congress’s Necessary and Proper Clause power, and I don’t think that the difference between mandates and restrictions should have constitutional significance in this context. But I don’t think the 1798 Act can fairly be characterized as “a federal law requiring the seamen to buy hospital insurance for themselves,” “an individual mandate requiring the purchase of health insurance,” as opposed to a garden-variety tax on economic activity.
UPDATE: A commenter writes, “the effect of the law is a mandate.” Perhaps the law indeed had a similar economic effect to what a mandate to buy health insurance would have had. But the question is whether it’s accurate to describe the law as actually being “a federal law requiring the seamen to buy hospital insurance for themselves.” After all, rightly or wrongly, many readers might well think the formal structure of the law (and not just its economic effect) matters — indeed much of the debate about the mandate has been about the formal structure of the requirement, since even the opponents of the mandate agree that (say) a payroll tax earmarked for health care would be constitutionally permissible. And as I read it the article was making an argument about what the law actually was, and not just what effect it had.
Here’s the text of the relevant sections of the statute:
Section 1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That from and after the first day of September next, the master or owner of every ship or vessel of the United States, arriving from a foreign port into any port of the United States, shall, before such ship or vessel shall be admitted to an entry, render to the collector a true account of the number of seamen, that shall have been employed on board such vessel since she was last entered at any port in the United States,–and shall pay to the said collector, at the rate of twenty cents per month for every seaman so employed; which sum he is hereby authorized to retain out of the wages of such seamen.
Sec. 2. And be it further enacted, That from and after the first day of September next, no collector shall grant to any ship or vessel whose enrolment or license for carrying on the coasting trade has expired, a new enrolment or license before the master of such ship or vessel shaH first render a true account to the collector, of the number of seamen, and the time they have severally been employed on board such ship or vessel, during the continuance of the license which has so expired, and pay to such collector twenty cents per month for every month such seamen have been severally employed, as aforesaid; which sum the said master is hereby authorized to retain out of the wages of such seamen. And if any such master shall render a false account of the number of men, and the length of time they have severally been employed, as is herein required, he shall forfeit and pay one hundred dollars.
Sec. 3. And be it further enacted, That it shall be the duty of the several collectors to make a quarterly return of the sums collected by them, respectively, by virtue of this act, to the Secretary of the Treasury; and the President of the United States is hereby authorized, out of the same, to provide for the temporary relief and maintenance of sick or disabJed seamen, in the hospitals or other proper institutions now established in the several ports of the United States, or, in ports where no such institutions exist, then in such other manner as he shall direct: Provided, that the monies collected in anyone district, shall be expended within the same.
UPDATE: Prof. Elhauge responds:
In my New Republic piece, I offered three examples where early Congresses that included many farmers enacted purchases mandates. I already responded to Randy Barnett’s critique on the first two examples. http://volokh.com/2012/04/14/einer-elhauge-replies/ Eugene Volokh offers an interesting different critique on the third example, arguing that it was a tax earmarked for health care rather than a mandate to buy health insurance. http://volokh.com/2012/04/13/58696/ Although the first two examples suffice to rebut the claim that the Obamacare mandate is unprecedented in any relevant fashion, I think Volokh is mistaken on the third example as well.
In the third example, the “duty” deducted from seamen’s wages was not a general tax because the collected funds were segregated and had to be used to provide hospital coverage in the districts in which they were collected. This sort of mandatory payment into a segregated fund is indistinguishable functionally from a requirement to participate in a local hospital insurance pool. Even linguistically, the statute does not use the word “tax,” but in any event I think the functional argument is the key one.
Volokh nonetheless argues that it was a tax because the statute did not require the seamen to provide proof of payment in order to receive hospital care. But I think this distinction fails for three reasons. First, the eligibility issue was mooted for this statute by the fact that the funds were automatically deducted from seamen’s wages, and the ships could not even enter the ports without proof that those automatic deductions had been made. Thus, the statutory requirement that the beneficiaries prove they were seamen was proof enough of payment and eligibility. Second, his argument does not distinguish Obamacare because individuals currently do not have to provide any proof of payment in order to receive emergency hospital care, and part of the purpose of the Obamacare mandate was precisely to fund such hospital care. Thus, if failing to demand proof of payment to get hospital care makes the seamen law a tax, it also makes Obamacare a tax. Third, I don’t see why this sort of administrative point about how to prove eligibility should matter functionally because it would not alter the fact that the seamen were being forced to pay for hospital insurance for themselves whether they wanted such insurance or not.
In his last paragraph, I think Volokh comes closer to the real issue, when he says “many readers might well think the formal structure of the law (and not just its economic effect) matters.” I am generally skeptical of the claim that formalistic distinctions should matter when no important functional difference exists. The required payment is no less intrusive on free market choices whether we call it a mandate or an earmarked tax. Indeed, it seems to me his logic would, if consistently applied, equally preclude other pro-market innovations like the Bush plan to privatize Social Security and the current Paul Ryan plan to privatize Medicare, which would convert those public insurance plans into requirements to use the government-mandated payments to buy retirement benefits and old age health insurance from private firms, and thus would make eligibility at those private plans depend on having paid them the money.
But leaving that aside, it seems to me that the argument that formalism trumps functionalism cannot work here because the challenger’s claim was that this mandate was unprecedented in an important functional sense, not just a formalistic one. It was the claim of that sort of functional lack of precedent that led — I would say misled –Justice Kennedy into saying at oral argument that the mandate “changes the relationship of the Federal Government to the individual in the very fundamental way” that creates “a heavy burden of justification.” The challenger argument was not that the mandate “creates a relationship between the Federal Government and the individual that is no different than has existed before, but used different words than usual to do so.” Had the argument been that the mandate was unprecedented only in this formalistic sense, I doubt anyone would think that suffices to create any sort of heavy burden.