Constitutionality of Individual Mandate

(By Andrew MacKie-Mason)

I've argued before that the Patient Protection and Affordable Care Act (H.R. 3590) is constitutional. Now I'll specifically deal with the so-called "individual mandate" and respond to a critic of it who thinks it's unconstitutional.

For those who don't recall, the individual mandate is a tax that will be levied on people who don't have health insurance and who can afford to buy it. It was put into place for two reasons: so that people can't "game" the system by not buying insurance until they get sick, and to offset the costs to society of people without insurance being cared for at everyone else's expense.

Ilya Somin, talking about the best way to destroy the new law entirely, writes:

We should also remember that litigation is likely to center on the bill’s mandate requiring individuals to purchase health insurance even if they prefer not to. This is one of the least popular elements of the bill, a fact that would give the courts further political cover. Eliminating the individual mandate might eventually destabilize other parts of the bill. Without the mandate, insurance companies might start lobbying for repeal of other elements of the plan (since the bill would no longer be a huge bonanza that gives them many additional customers). If the ban on excluding coverage of preexisting conditions is maintained, the elimination of the mandate would incentivize citizens to wait until they get sick to purchase insurance. It’s unlikely that such a system could persist for long.

In my view, the individual mandate is unconstitutional because it exceeds Congress’ powers under both the Commerce Clause and the Tax and Spending Clauses. I believe that courts should strike it down regardless of the political situation.

In explaining how striking down the individual mandate would help, Somin undermines his argument that the mandate is, in fact, unconstitutional. As I laid out above, there are two reasons for the individual mandate. The second (offsetting the harm that uninsured people do to society when they get sick) I think falls within the Commerce Clause. But we don't need to even reach that debate. The first reason (making the ban on not accepting new customers with pre-existing conditions effective and not allowing people to game the system) is all we need. As Somin admits, the individual mandate is necessary to make the pre-existing condition provisions effective: without the mandate, people would wait until they got sick to purchase insurance and the entire regulatory scheme would fail.

Professor Somin doesn't accept the constitutionality of the pre-existing condition provisions. In an email (which he has given me permission to reprint here, but which he wants to stress is simply a quick response and not intended to be a detailed analysis) he says that "I think those requirements are unconstitutional. They do not regulate interstate commerce, but intrastate commerce." I think that even though insurance is largely intrastate, it has a large enough impact on interstate commerce to be regulated under the interstate commerce clause. However, that's a separate debate that I don't think we need to address here. In his post, Professor Somin was saying that the individual mandate is unconstitutional per se, not because the underlying provisions are themselves unconstitutional. Such a finding would require the opposite line of reasoning to the one he advocated.

In his emails, Somin goes on to say that even if the pre-existing condition provisions are constitutional as intrastate commerce (presumably as part of a larger regulatory scheme affecting interstate commerce), the individual mandate cannot be carried along under the pre-existing condition provisions. From his emails (which again, are quick and not intended to be thorough):

Under cases such as Raich, Lopez, and Morrison, regulation of noneconomic activity can only be permitted as part of a "comprehensive regulatory scheme" that targets interstate commerce. This one does not. At most, it targets intrastate commerce that has an effect on interstate...

However, an underlying provision that regulates mere economic activity that isn't interstate commerce cannot be used to bootstrap regulation of noneconomic activity - much less complete inactivity, as in this case.

Professor Somin seems to be trying to limit the Necessary and Proper Clause to actions directly authorized by the Commerce Clause, rather than to all actions which Congress has the authority to take. The Necessary and Proper Clause provides that "The Congress shall have Power - To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof." It is broad in its scope. If the underlying power (regulating insurance decisions based upon pre-existing conditions) is constitutional, whether as inter or intrastate commerce, the necessary and proper actions to make that underlying power effective are also constitutional. If a certain regulation of intrastate commerce is a "power vested by this Constitution in the Government of the United States," then provisions regarding it are covered by the Necessary and Proper Clause.

I've glanced over the cases that Professor Somin mentioned (Raich, Lopez, and Morrison) but they all seem to deal with the extent of the Commerce Clause, not with the application of the Necessary and Proper Clause to otherwise constitutional applications of Congressional power.

If Professor Somin wants to attack the underlying provisions (regulation of pre-existing conditions being one, though perhaps not the only one) as a way of bringing down the individual mandate, he is welcome to do so. However, the individual mandate cannot legitimately be attacked per se because it is upheld by the Necessary and Proper Clause until the underlying provisions are deemed unconstitutional.