Interstate Commerce Clause
Challenges based on the Commerce Clause, which enumerates power to Congress to regulate interstate and foreign commerce, allege that Congress acted beyond the scope of its authority in attempting to use the regulation of the health insurance markets as justification for implementing the ACA's "individual mandate" provisions. JURIST Guest Columnist Ilya Somin of the George Mason School of Law explains the argument in Forum:
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 is not even commerce at all. Instead of regulating preexisting commerce, the bill forces people to engage in commercial transactions they would have otherwise avoided. ... 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 he government does not argue that everyone will inevitably use health insurance. Instead, they define the market as "health care." The same bait and switch tactic works for virtually any other mandate Congress might care to impose.However, proponents of the "individual mandate" claim that the pervasive importance of health care in the US economy, and Justice Scalia's opinion in Gonzales v. Raich, provide justification for the law. JURIST Guest Columnist Sallie Sanford of the University of Washington School of Law articulates the federal government's stance on the individual mandate in Forum:
Health care constitutes a huge portion of our nation's economy, currently constituting more than 17 percent of the GDP. Both health care and health insurance indisputably impact interstate commerce. [As explained in his] concurrence [in Gonzales v. Raich], Justice Antonin Scalia maintains, "the authority to enact laws necessary and proper for the regulation of interstate commerce is not limited to laws governing intrastate activities that substantially affect interstate commerce. Where necessary to make a regulation of interstate commerce effective, Congress may regulate even those intrastate activities that do not themselves substantially affect interstate commerce." Under the structure of the new health reform law, the requirement to have insurance is integral to Congress' overall approach to regulating insurance practices and attempting to stabilize the insurance market.An opinion that garnered a great deal of attention was that of Judge Jeffrey Sutton's opinion upholding the constitutionality of the individual mandate in the US Court of Appeals for the Sixth Circuit. Sutton, a former clerk to Justice Antonin Scalia, is considered one of the leading conservative jurists in the US and his opinion has served as a legal rallying point for supporters of ACA. However, JURIST Guest Columnists Ilya Shapiro and Trevor Burrus from the Cato Institute argue that Sutton's opinion is inherently flawed:
The plaintiffs in the pending lawsuits argue, however, that the individual mandate is different because it attempts to regulate inactivity. By definition, they maintain, a person who declines to purchase health insurance is not engaging in commerce at all. A gamble to remain uninsured does, however, impose economic costs in at least two ways. The first is when an uninsured person seeks medical treatment. Because of a federal emergency care law, state legal requirements, hospital mission obligation, and actions rooted in medical ethics, that care is sometimes mandated and is often provided. Particularly when the patient comes in through the emergency room, as is not infrequently the case, costs are substantial and often go unpaid, either because of a decision at the outset to provide "charity care" or because the patient does not pay the bill. Findings in the new law estimate the costs of providing uncompensated care at $43 billion in 2008. While many of these costs are ultimately borne by federal, state, and local governments (in the form of subsidies to hospitals and clinics), a substantial amount is shifted to insured patients. Findings in the new law estimate that $1,000 of the cost of an employer-provided family insurance premium (out of an average of about $13,000) is attributable to uncompensated care.
The second way that being uninsured imposes economic costs is by shifting the insured risk pool. Among the approximately one in seven United States citizens who lack insurance, a significant percentage is young and healthy. By not participating in the insurance market, by gambling that they will not need expensive health care (or that if they do, someone else will pick up the tab), they skew insurance pools towards an older and sicker population, raising the premium costs. Thus, this sort of inactivity or non-participation does have an economic impact, and certainly a far more substantial economic impact than the growing of marijuana for personal, medical use [as seen in Raich].
A former clerk to Justice Antonin Scalia who was appointed to the bench by President George W. Bush, Sutton is considered one of the leading conservative jurists in the country. Many are hailing Sutton's opinion as an admirable example of non-partisan judicial reasoning because of this reputation. In reality, Judge Sutton's opinion is an unfortunate blend of factual supposition and judicial abdication. While seeming to call out the Supreme Court for failing to articulate a significant and meaningful limit on federal power, Sutton simultaneously engages in a type of reasoning that would eviscerate any such limit. Sutton makes two crucial errors in what is otherwise a masterfully crafted opinion: he consistently reads the "substantial effects" doctrine (the outermost bound of federal power in this area) as solely requiring economic calculation, and he defends a hypothetical statute rather than the one Congress actually passed.
Tax and Spending Clause
There were also numerous legal challenges targeting the civil forfeiture imposed on those who refuse to comply with the "individual mandate." The government has argued that the Tax and Spending Clause affords them the necessary authority to levy the forfeiture, which they characterize as a tax for the general welfare. However, opponents maintain that the government's "tax" is actually a financial penalty. JURIST Guest Columnist Ilya Somin of George Mason School of Law again explains this opposition stance in Forum:
The federal government has also argued that the mandate is constitutional because it is a tax authorized by congressional power to impose taxes for the "general Welfare." All ... federal judges who have ruled on this claim so far have rejected it, including [those] who [have] concluded that the mandate is constitutional under the Commerce Clause. They correctly recognized that the mandate is a financial penalty for refusing to comply with a federal regulation. ... As recently as 1996, the Supreme Court reiterated the crucial distinction between a penalty and a tax. It ruled that "[a] tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government," while a penalty is "an exaction imposed by statute as punishment for an unlawful act" or--as in the case of the individual mandate--an unlawful omission. The individual mandate is a clear example of a penalty, where Congress requires people to purchase health insurance, and then punishes them with a fine if they fail to comply.
Twenty-six states also filed a brief [PDF] to the Supreme Court arguing that the ACA's expansion of Medicaid exceeds congressional authority pursuant to the Spending Clause. JURIST Guest Columnist Sallie Sanford noted in Forum that the Court's "acceptance of the Medicaid issue surprised many":
The challengers argue that the Medicaid expansion is an unconstitutional compulsion that "commandeers" the states into the service of the federal government. They point to increased costs and expanded administrative burdens. Although states are technically free to drop out of this joint federal-state program, as a practical matter they are heavily reliant on matching Medicaid dollars to fund medical care for their poorest citizens. Federal Medicaid funding is a significant part of most states's beleaguered budgets.
The government counters that this is a proper exercise of Congress's ability to attach conditions to the receipt of federal funds. Congress reserved the right to amend the Medicaid conditions, and has done so numerous times over the years. Furthermore, with this expansion the federal government will assume most of the cost for the newly eligible. At the outset the federal match will be 100 percent, ratcheting down to 90 percent by 2020. Indeed, some non-party states have previously filed amicus briefs in support of the expansion, arguing that it will help financially stabilize their programs.
Supremacy Clause & Tenth Amendment
The last constitutional provision implicated in major arguments made against ACA is the Supremacy Clause, which mandates that state judges must follow federal law when it is enacted pursuant to constitutionally authorized powers. Essentially, opponents argue that ACA overextends the federal government's power to force states to comply with federal law. Similar claims have also been made alleging that the federal government illegally usurped states' rights to regulate health care on their own (a topic discussed more in-depth under State Legislative Action). JURIST Guest Columnist Steven Schwinn of the John Marshall Law School in Chicago finds these arguments unconvincing and ungrounded in Constitutional text when evaluating the Eleventh Circuit ruling that the individual mandate is unconstitutional in Forum:
Start with the text. Nothing in the original Constitution supports the theory that Congress cannot regulate in areas of traditional state concern. The two important exceptions, which address slavery, do not provide support for the court's principle of federalism today. In fact, the plain text of the original Constitution says the opposite. Under Article I, Section 8, Congress has plenary authority "[t]o make all Laws which shall be necessary and proper" to "regulate commerce ... among the several States," without regard to whether such laws or regulations touch on areas of traditional state concern. Moreover, several clauses throughout the text specifically restrict the states, suggesting that there is nothing sacrosanct about areas of traditional state concern. For example, Article I, Section 10 contains a list of restrictions on state action; Article IV, Sections 1 and 2 similarly contain restrictions on states. This is all punctuated, of course, by the Supremacy Clause in Article VI, which specifically contemplates an overlap between federal and state law in which federal law will prevail, and this article's Oath of Office Clause, which requires state officers to swear to support the Constitution.
Later amendments restrict state sovereignty to an even greater degree and thus undercut the theory that the Constitution protects areas of traditional state concern. The Thirteenth, Fourteenth, Fifteenth, Nineteenth, Twenty-Fourth and Twenty-Sixth Amendments prohibit states from violating various civil rights and authorize Congress to adopt legislation to protect these rights against state interference. The Sixteenth Amendment authorizes Congress to lay and collect an income tax "without apportionment among the several States." And the Seventeenth Amendment provides for the direct election of US Senators, ending their appointment by the state legislatures. The Tenth Amendment, the state-righters' perennial favorite, only provides that those "powers not delegated to the United States ... are reserved to the States respectively, or to the people." This says nothing about areas of traditional state concern or the extent of federal powers; it is merely a truism in a federal system like ours. Thus, the text and structure do not restrict congressional action based on areas of traditional state concern.