Federal district court Judge Henry Hudson’s recent decision striking down as unconstitutional the “individual mandate” included in President Obama’s health care bill is a step in the right direction. Upholding the law would give Congress virtually unlimited power to mandate anything it wants and undermine constitutional restraints on federal power.
The mandate requires most Americans to purchase government-approved health insurance plans by 2014. Its constitutionality has been challenged in several lawsuits brought by 21 states and various private groups. Judge Hudson’s ruling addressed a case brought by the state of Virginia.
The federal government argues that Congress has the power to enact the mandate under the Commerce Clause, the Tax Clause, and the Necessary and Proper Clause. None of these theories is persuasive.
The Commerce Clause gives Congress authority to regulate “Commerce among … the several States.” But the individual mandate regulates that which is neither commercial nor interstate. Virtually all purchases of health insurance are intrastate because a combination of state and federal law makes it illegal to purchase health insurance across state lines. Moreover, the object of the mandate isn’t even commerce at all. Instead of regulating preexisting commerce, the bill forces people to engage in commercial transactions they would have otherwise avoided.
A series of dubious Supreme Court decisions have expanded Congress’ Commerce Clause authority to cover virtually any “economic activity.” But the insurance mandate goes well beyond this. Far from engaging in “economic activity,” people who decide not to purchase health insurance are actually refraining from doing so.
The federal government claims that forcing people to purchase health insurance actually does regulate economic activity because everyone eventually uses health care in some form. Two other district courts have upheld the law on this basis. But as Judge Hudson points out, “the same reasoning could apply to transportation, housing, or nutritional decisions. This broad definition of the economic activity subject to congressional regulation lacks logical limitation.” This logic would give Congress the power to force everyone to purchase a car because everyone eventually uses some form of “transportation.”
The fact that most people eventually use health care does not differentiate health insurance from almost any other market of any significance. If you define the relevant “market” broadly enough, you can characterize any decision not to purchase a good or service exactly the same way. Notice that the government does not argue that everyone will inevitably use health insurance. Instead, they define the market as “health care.” The same sleight of hand works for virtually any other mandate Congress might care to impose.
Consider a mandate requiring everyone to purchase General Motors cars in order to help the auto industry. Sure, there are many people who don’t participate in the market for cars. But just about everyone participates in the market for “transportation.” We all need to get from place to place somehow. How about a mandate requiring all Americans to see the new Harry Potter movie? After all, just about everyone participates in some way in the market for “entertainment.”
Judge Hudson is equally persuasive in rejecting the argument that the mandate is authorized by Congress’ power to impose taxes. It is, he concludes, actually a regulatory penalty for refusing to comply with a regulation. As the Supreme Court explained in its most recent ruling distinguishing between taxes and penalties, “[a] tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government.” By contrast, “if the concept of penalty means anything, it means punishment for an unlawful act or omission.” It’s hard to think of a much clearer example of a fine used as “punishment for an unlawful act or omission” than the individual mandate.
President Obama himself said last year that “to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase.” He was right. If the mandate qualifies as a tax merely because it punishes violators with a fine, then Congress could require Americans to do almost anything on pain of having to pay a fine if they refuse.
The federal government also claims that the mandate is authorized by the Necessary and Proper Clause, which gives Congress the power to “make all Laws which shall be necessary and proper for carrying into Execution” other powers Congress is granted in the Constitution. The weakest part of Judge Hudson’s opinion is his analysis of the government’s Necessary and Proper Clause argument, which he discusses only briefly and unconvincingly.
A far better answer to the argument is that the mandate isn’t “proper” even if it is “necessary.” The Supreme Court has defined the word “necessary” in an extremely broad way, including any measure that is potentially “useful” or “convenient” for executing any of Congress’ other powers. Under that lax standard, the federal government may well succeed in proving that the mandate is “necessary” to implement other parts of the health care bill, especially the requirement that insurance companies accept customers with preexisting conditions.
But the Court has also ruled that a law that is “necessary” is not constitutional unless it is also “proper.” The individual mandate is not. Historical evidence suggests that the word “proper” was, at the very least, intended to foreclose interpretations of the Clause that give Congress virtually unconstrained power. And if the Clause allows Congress to impose any mandate that is in some way useful to implementing its policy objectives, the same logic would justify almost any other requirement Congress might care to impose on individuals, thereby gutting the principle of limited federal power. Just about any mandate can be linked to some congressional objective in the sense of being useful or convenient. For example, a mandate requiring people to purchase cars would be a “useful” way to help achieve Congress’ goal of helping the auto industry. A mandate requiring people to exercise every day might be a “convenient” way to reduce health care costs.
The legal battle over the mandate is far from over. In the next few weeks, we will probably have a trial court ruling in another important case challenging the mandate: one filed by twenty states and the National Federation of Independent Business in Florida. The judge in that case has also expressed skepticism about the federal government’s arguments. The issue will also soon be addressed by federal appellate courts and could well eventually reach the Supreme Court. Still, Judge Hudson’s ruling is a noteworthy victory for limited constitutional government.
Ilya Somin is a law professor at George Mason University. He wrote an amicus brief in the Virginia individual mandate case on behalf of the Washington Legal Foundation and a group of constitutional law scholars.