Regulating Inactivity Under the Commerce Clause

My co-blogger Randy Barnett has posted his very interesting analysis of why he believes that requiring health care insurance is unconstitutional under existing Commerce Clause precedents. A key part of his argument is that requiring health care insurance is not regulating commercial activity because it attempts to regulate inactivity:

To assess the constitutionality of a claim of power under the Commerce Clause, the primary question becomes, “what class of activity is Congress seeking to regulate?” Only when this question is answered can the Court assess whether that class of activity substantially affects interstate commerce. Significantly, the mandate imposed by the pending bills does not regulate or prohibit the economic activity of providing or administering health insurance. Nor does it regulate or prohibit the economic activity of providing health care, whether by doctors, hospitals, pharmaceutical companies, or other entities engaged in the business of providing a medical good or service. Indeed, the health care mandate does not purport to regulate or prohibit activity of any kind, whether economic or noneconomic. To the contrary, it purports to “regulate” inactivity.

Proponents of the individual mandate are contending that, under its power to “regulate commerce…among the several states,” Congress may regulate the doing of nothing at all! In other words, the statute purports to convert inactivity into a class of activity. By its own plain terms, the individual mandate provision regulates the absence of action. To uphold this power under its existing doctrine, the Court must conclude that an individual’s failure to enter into a contract for health insurance is an activity that is “economic” in nature– that is, it is part of a “class of activity” that “substantially affects interstate commerce.”

Never in this nation’s history has the commerce power been used to require a person who does nothing to engage in economic activity. Therefore, no decision of the Supreme Court has ever upheld such a claim of power. Such a regulation of a “class of inactivity” is of a wholly different kind than any at issue in the Court’s most expansive interpretations of the Commerce Clause.

Unlike Randy, I am no expert in the commerce clause. At the same time, the counter-argument is worth flagging, and I believe it runs like this. Everyone pays for health care goods and services somehow, whether often or only once-in-a-while. Some pay for services individually on their own. Others pay through a pre-purchased insurance plan. Both ways are economic activities — purchasing health care services. From this perspective, if the government chooses to mandate one option, it is not regulating “inactivity.” Rather, it is regulating the economic activity of buying health care services by replacing one means of buying those services with another way of buying those services.

Also, I’m not sure that the regulation of inactivity under the Commerce Clause is as unprecedented as Randy suggests. Gonzales v. Raich, which Randy argued for Raich, is notable here. The Controlled Substances Act at issue in Raich banned both activity and inactivity. On one hand, it banned the activity of manufacturing, distributing, and dispensing controlled substances. On the other hand, it also banned the inactivity of possessing controlled substances. If you happened to have marijuana in your closet when the CSA went into effect, and thus were already in possession of it, the CSA regulated your inactivity by requiring you to act: The law mandated that you dispossess yourself of your marijuana or else face severe criminal punishment. And yet the majority opinion in Raich readily construed the ban on both activity and inactivity relating to controlled substances to be a straightforward regulation of economic activities:

[T]he activities regulated by the CSA are quintessentially economic. “Economics” refers to “the production, distribution, and consumption of commodities.” Webster’s Third New International Dictionary 720 (1966). The CSA is a statute that regulates the production, distribution, and consumption of commodities for which there is an established, and lucrative, interstate market. Prohibiting the intrastate possession or manufacture of an article of commerce is a rational (and commonly utilized) means of regulating commerce in that product.

That is, Congress could regulate the inactivity of possession because it was a rational and common means of regulating commerce in the product. By that reasoning, Congress can regulate the inactivity of not buying health care insurance because it is a rational way of regulating the health care market.

As I said, unlike Randy I’m not an expert in the commerce clause. But I thought it was worth flagging the counterargument for those interested in these issues.