I come late to the debate over whether a federal law requiring people to purchase health insurance exceeds Congress' powers under the Commerce Clause. In my view, the answer under current precedent is clearly "no." At the same time, I do think that such a law would be unconstitutional under the correct interpretation of the Commerce Clause - or any interpretation that takes the constitutional text seriously.
I. The Health Insurance Mandate Under Current Supreme Court Precedent.
Current Supreme Court precedent allows Congress regulate virtually anything that has even a remote connection to interstate commerce, so long as it has a "substantial effect" on it. The most recent major precedent in this field is Gonzales v. Raich, where the Court held that Congress' power to regulate interstate commerce was broad enough to uphold a ban on the use of medical marijuana that was never sold in any market and never left the confines of the state where it was grown. This regulation was upheld under the "substantial effects" rule noted above. As I describe in great detail in this article, Raich renders Congress' power under the substantial effects test virtually unlimited in three different ways:
1. Raich holds that Congress can regulate virtually any "economic activity," and adopts an extraordinarily broad definition of "economic," which according to the Court of encompasses anything that involves the "production, distribution, and consumption of commodities."
2. Raich makes it easy for Congress to impose controls on even "non-economic" activity by claiming that it is part of a broader regulatory scheme aimed at something economic.
3. Raich adopts so-called "rational basis" test as the standard for Commerce Clause cases, holding that "[w]e need not determine whether [the] activities [being regulated], taken in the aggregate, substantially affect interstate commerce in fact, but only whether a rational basis exists for so concluding." In legal jargon, a "rational basis" can be almost any non-completely moronic reason for believing that a particular claim might be true.
Any of these three holdings could easily justify a federal requirement forcing people to purchase health insurance. The decision to purchase or not purchase health insurance is probably "economic activity," as Raich defines it, since it involves the distribution and consumption of commodities such as medicine. When you buy health insurance, you are contracting with the insurance company to provide you with medicine and other needed commodities should you get sick.
Even if the purchase of health insurance is "non-economic" in nature, it could easily be upheld as part of a broader regulatory scheme aimed at economic activity - in this case regulation of the health care industry. As I discuss on pp. 516-18 of my article on Raich, The Court makes it very easy to prove that virtually any regulation can be considered part of a broader regulatory scheme by not requiring any proof that the regulation in question really is needed to make the broader scheme work. Finally, even if a court concludes that the government was wrong to assume that the decision to buy health insurance is "economic activity" under Raich's broad definition and wrong to believe that the mandatory purchase requirement was part of a broader regulatory scheme, the requirement could still be upheld because there was a "rational basis" for these ultimately mistaken beliefs.
II. Why Current Doctrine is Wrong.
For reasons laid out in my article, I think that Raich and other decisions interpreting the Commerce Clause very broadly were wrongly decided. I also agree with most of Randy Barnett's arguments to that effect in this post. Looking at the text of the Constitution, the Commerce Clause merely grants Congress the power to regulate "Commerce ... among the several states." Choosing to purchase (or not purchase) health insurance is not interstate commerce, if only because nearly all insurance purchases are conducted within the confines of a single state. Obviously, the decision to purchase health insurance may well have an impact on interstate commerce, and modern doctrine even before Raich allowed congressional regulation of any activities that have such a "substantial effect." However, this "effects" test is badly misguided. If the Commerce Clause really gave Congress the power to regulate any activity that merely affects interstate commerce, most of Congress' other powers listed in Article I of the Constitution would be redundant. For example, the very same phrase that enumerates Congress' power to regulate interstate commerce also gives it the power to regulate "Commerce with foreign Nations" and "with the Indian tribes." Foreign trade and trade with Indian tribes (which was a much more important part of the economy at the time of the Founding than today) clearly have major effects on interstate trade. Yet these two powers are separately enumerated, which strongly suggests that the power to regulate interstate commerce doesn't give Congress the power to regulate any activity that merely has an effect - substantial or otherwise - on that commerce.
Be that as it may, it is highly unlikely that the Supreme Court would invalidate a major provision of the health care bill, should it pass Congress. In addition to requiring the overruling of Raich and considerable revision of other precedents, such a decision would lead to a major confrontation with Congress and the president. The Court is unlikely to pick a massive fight with a still-popular president backed by a large congressional majority. Of course, it is still possible that the Court could invalidate some minor portion of the bill on Commerce Clause grounds. But even that is unlikely so long as the majority of justices remain committed to Raich. Five of the six justices who voted with the majority in that case are still on the Court. The only exception - Justice David Souter - has been replaced by a liberal justice who is unlikely to be any more willing to impose meaningful limits on congressional power than Souter was.
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