In yesterday's post I cited abundant authority in support of the principle that the courts must defer to the judgment of Congress in reviewing the constitutionality of economic legislation. Decisions under the Due Process, Equal Protection Clause, Spending Clause, and Commerce Clause all reveal the same idea, that the courts lack the power to second-guess the political branches in the determination of national economic policy.

I promised that today I would explain why the courts lack that power. There are two reasons. First, the courts are not institutionally equipped to undertake the complex analysis necessary to the establishment of economic policy. Second, the courts are not democratically authorized to balance and compromise the economic interests of different segments of our society.

Both of these points were made in Part III of the amicus brief that I submitted to the Supreme Court on behalf of a committee of professors in the health care case. For the second point regarding the compromise among economic interests we are indebted to a member of the committee, Professor David S. Cohen of the Earle Mack School of Law, Drexel University. Part III of the brief is reproduced below:

III. ECONOMIC ANALYSIS IS SUITED TO THE LEGISLATIVE DUTY TO DEVELOP PUBLIC POLICY BUT IS NOT COMPATIBLE WITH THE JUDICIAL DUTY TO INTERPRET THE MEANING OF THE CONSTITUTION

In deciding whether to enact the individual mandate as part of the PPACA, Congress had to consider a host of interrelated factors including the following: the cost of health care in the United States; the cost of health insurance; the extent of out-of-pocket expenses for health care; the increase in the cost of health insurance relative to increases in personal income and the cost of living; the absolute and relative cost borne by persons in different income groups; the extent and effect of cost-shifting under current law; and the number and effect of personal bankruptcies attributable to the cost of health care. Most importantly, Congress had to assess the state of the nation’s health and the effect of the lack of adequate insurance upon people’s health.

In deciding whether the nation’s system of paying for medical care ought to be reformed, Congress also had to evaluate the cost and effectiveness of current federally funded programs, including Medicare, 42 U.S.C. §1395, Medicaid, 42 U.S.C. §1396, the National Health Service Corps, 42 U.S.C. §254d, the Veterans Health Administration, 38 U.S.C. §7401, and federally funded community health centers, 42 U.S.C. §254b. For purposes of comparison, Congress had to familiarize itself with the details of the health care delivery systems in other countries as well as the relative cost and efficacy of those programs. Once again, a prime consideration was whether the people of other countries enjoy better health than American citizens.

Congress also had to predict the likely effect of the PPACA on all of the previously mentioned cost and health factors. Specifically, Congress sought to anticipate the likely effect of insurance reforms, including guaranteed issue regardless of health; guaranteed coverage of preexisting conditions; complete coverage for preventive care; coverage for adult children; and minimum medical loss ratios. It had to determine the level of federal subsidies to individuals and families of different income groups that would be necessary to enable them to purchase health insurance and offset out-of-pocket expenses; the future cost of federal contributions to the states that would be necessary to pay for the expansion of Medicaid; and the extent and mix of tax increases and spending reductions that would be necessary to pay for these reforms.

In keeping with our constitutional tradition that the states have served as laboratories for experimentation in governing, Congress also examined the efficacy of health insurance reform in the various states and modeled the PPACA after the plan that was adopted in Massachusetts in 2006, Mass. St. 2006, c. 58 (An Act Providing Access to Affordable, Quality, Accountable Health Care).

In making these determinations Congress had at its disposal an array of economic studies from various sources, including the Agency for Healthcare Research and Quality, the Office of the Actuary of the Centers for Medicare and Medicaid Services, the Congressional Budget office, the Joint Commission on Taxation, the Commonwealth Fund, the Organisation for Economic and Cooperative Development, the World Health Organization of the United Nations, the Kaiser Family Foundation, and Families USA. Congress also was free to consider the voluminous literature published by health care economists as well as their testimony before Congress.

All of the foregoing economic factors had to be considered in designing this complex, comprehensive scheme of legislation. In the words of the District Court below, the various elements of the PPACA are a “finely crafted watch,” containing “approximately 450 separate pieces,” many if not most of which are interrelated and interdependent. Florida v. U.S. Dept. of Health and Human Services, 780 F.Supp.2d 1256, 1304 (N.D. Fla. 2010). Congress had to choose not only from a competing set of economic models and theories but also had to decide how to combine the hundreds of moving parts of this Act into a comprehensive and unified scheme of economic regulation. This was a matter of legislative prerogative and is beyond judicial competency.

In the exercise of its lawmaking function, Congress is not only permitted but expected to take economic data and expert economic opinion into account in determining whether to enact a system of universal health care coverage and in deciding what form that system should take. While judges as individuals are as capable as legislators at understanding and acting upon this information, it is incompatible with their judicial role to bring these considerations to the interpretation of the Constitution. The role of the courts is limited to determining whether Congress had a rational basis for enacting a particular plan of economic legislation.

In our brief we cited a dozen economic studies that bear upon the economic judgments that Congress had to consider in drafting this legislation. We could have cited hundreds.

Generations of Americans have struggled to achieve a program of universal health care. Health care providers, health insurers, consumer advocates, non-profit think tanks, and government agencies have researched this issue for decades and produced mountains of data. The issue has repeatedly come before Congress consuming vast amounts of political energy. (It bears repeating that the model of the "individual mandate" has been a Republican idea for nearly twenty years; the Party abandoned it only when Democrats embraced it after the 2008 election. Until then no-one thought of it as unconstitutional.) Congress worked on this specific legislation for over a year. The law contains over 450 separate provisions, most of which are intertwined and interdependent.

In contrast, the Supreme Court has undertaken review of this law only a few months ago as one case in a particularly full caseload. Even without the health care case this would be a challenging year for the Court to clear its docket. It is understandable – though still alarming – that at oral argument some members of the Court exhibited confusion regarding what was in the law and how the health insurance market works. That confusion reinforces the constitutional principle that under the doctrine of Separation of Powers, economic policy is the province of the political branches, not the judicial branch.

When the courts consider the constitutionality of laws that affect fundamental rights the presumption of constitutionality disappears. The courts are appropriately skeptical of legislation that affects fundamental rights such as freedom of speech, freedom of religion, the right to privacy, or the right of self-defense. But when the courts undertake to review the constitutionality of measures that are designed to adjust economic realities and reassign economic rights and responsibilities, their role is extremely limited, and for good reason. The federal courts do not democratically represent the economic interests of American society. That role is assigned to Congress and the President.

Congress had a rational basis for believing that Americans' lack of access to affordable health care is substantially affecting interstate commerce, and it had a rational basis for believing that the individual mandate is necessary to carry out the plan of universal coverage enacted in the PPACA. The law is constitutional.

Wilson Huhn teaches Constitutional Law at The University of Akron School of Law.

At oral argument in the health care case Justice Anthony Kennedy suggested that the government bears the burden of persuading the Supreme Court that the Affordable Care Act is constitutional. He is precisely wrong. Like all purely economic legislation, the Affordable Care Act is presumed constitutional. This is a fundamental principle of the doctrine of Separation of Powers.

At oral argument last week in the health care case Justice Kennedy made the following remarkable proposals about the presumption of constitutionality:

Could you help — help me with this. Assume for the moment — you may disagree. Assume for the moment that this is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to act to go into commerce. If that is so, do you not have a heavy burden of justification?

I understand that we must presume laws are constitutional, but, even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?

The answer to both questions is NO. Justice Kennedy's proposed view of the role of the Judicial Branch violates the Separation of Powers.

The Legislative Branch enacts legislation. The Judicial Branch ascertains the meaning of laws and determines whether they are constitutional. In interpreting a statute the courts must defer to the intent of the legislature. The touchstone for statutory interpretation is "the intent of the legislature." Similarly, in assessing the constitutionality of a statute the courts must presume that it is constitutional.

There is only one exception to this rule. If Congress or a state enacts a law that infringes upon an individual's constitutional rights, then the courts will "strictly scrutinize" the law. In such a case the government bears the burden of proving that the law is constitutional – it must prove that the law is necessary to accomplish a compelling governmental interest. If the law does not affect anyone's constitutional rights then the "rational basis test" applies. The person challenging the law has the burden of proving that the law does not have any tendency to accomplish a legitimate governmental purpose.

It used to be that the Supreme Court recognized "economic liberty" as a constitutional right, and frequently struck down laws regulating employers and protecting workers under the theory of "economic substantive due process." That is no longer the case.

Instead, today economic legislation is presumed constitutional. This rule applies whether or not the law is "novel" or "shocking" to the members of the Court. The Supreme Court has recognized this principle in dozens, if not hundreds of cases. Here are but a few quotations from cases demonstrating this basic precept of constitutional law:

[R]egulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional unless in the light of the facts made known or generally assumed it is of such a character as to preclude the assumption that it rests upon some rational basis within the knowledge and experience of the legislators. United States v. Carolene Products, 304 U.S. 144, 152 (1938) (Stone, J.) (upholding federal law against challenge under Due Process Clause).

[T]o be constitutional … It is enough that there is an evil at hand for correction, and that it might be thought that the particular legislative measure was a rational way to correct it. Williamson v. Lee Optical, 348 U.S. 483, 488 (1955) (Douglas, J.) (unanimous decision) (upholding state law against challenge under Equal Protection Clause).

We have returned to the original constitutional proposition that courts do not substitute their social and economic beliefs for the judgment of legislative bodies, who are elected to pass laws. Ferguson v. Skrupa, 372 U.S. 726, 730 (1963) (Black, J.) (unanimous decision) (upholding state law against challenge under Due Process Clause).

[W]here we find that the legislators, in light of the facts and testimony before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce, our investigation is at an end. Katzenbach v. McClung, 379 U.S. 274 303-304 (1964) (Clark, J.) (unanimous decision with concurring opinions by Black, Douglas, and Goldberg, JJ.) (upholding federal law under Commerce Clause).

It is by now well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality, and that the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976) (Marshall, J.) (upholding federal law against challenge under Due Process Clause).

Although parties challenging legislation under the Equal Protection Clause may introduce evidence supporting their claim that it is irrational, United States v. Carolene Products Co., 304 U.S. 144, 153-154 (1938), they cannot prevail so long as “it is evident from all the considerations presented to [the legislature], and those of which we may take judicial notice, that the question is at least debatable.” Id., at 154. Where there was evidence before the legislature reasonably supporting the classification, litigants may not procure invalidation of the legislation merely by tendering evidence in court that the legislature was mistaken. Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 464 (1981) (Brennan, J.) (footnote omitted) (upholding state law against challenge under Equal Protection Clause).

[Referring to] the strong deference accorded legislation in the field of national economic policy…. Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 476 U.S. 717, 729 (1984) (Brennan, J.) (unanimous decision upholding federal law against challenge under Due Process Clause).

In considering whether a particular expenditure is intended to serve general public purposes, courts should defer substantially to the judgment of Congress. South Dakota v. Dole, 483 U.S. 203 (1987) (Rehnquist, J.) (upholding federal law under General Welfare Clause).

[I]n determining whether the Necessary and Proper Clause grants Congress the legislative authority to enact a particular federal statute, we look to see whether the statute constitutes a means that is rationally related to the implementation of a constitutionally enumerated power. United States v. Comstock, __ U.S. __, 130 S.Ct. 1949, 1956 (2010) (Breyer, J.) (upholding federal law under Necessary and Proper Clause).

Tthe principle that the courts must defer to Congress on questions of economic policy pervades the Constitution. This principle applies in every field of Constitutional Law – Commerce Clause, Spending Clause, Necessary and Proper Clause, Fifth Amendment Due Process, and Fourteenth Amendment Due Process. This principle is so basic to our system of government that it must be considered a fundamental aspect of the doctrine of Separation of Powers. There is no exception to this principle for "novel" statutes. All statutes are novel. Nor does it matter how significant a departure that the law makes from existing law. It matters not whether the law works a minor or a major change in our society. The people, acting through their representatives in Congress, have the right to determine national economic policy. That is the meaning of the foregoing cases.

In tomorrow's post I will discuss why the courts must defer to Congress in the realm of economic policy.

Wilson Huhn teaches Constitutional Law at The University of Akron.

If there is one constitutional principle that Justice Anthony Kennedy is devoted to it is the principle of "individual liberty." In oral argument yesterday Solicitor General Donald Verrilli took an opportunity to address that concept.

The debate over health care reform has long centered over the concept of individual liberty. The opponents of the law contend that the individual mandate violates the liberty of the individual to decide for himself or herself whether or not to purchase health insurance.

The opponents of the law do not contend that they have a constitutional right to refuse to purchase insurance. They must concede that the states have the power to impose this obligation. Instead, they argue that Congress lacks the power to enact this law under the Commerce Clause or the Necessary and Proper Clause, and that to allow Congress to require individuals to purchase health insurance represents a threat to individual liberty.

This is an argument that resonates with Justice Anthony Kennedy. In opinion after opinion, Justice Kennedy has focused on and elaborated upon the right to "liberty." This is why he decided Citizens United the way he did, holding that corporations have a constitutional right to spend as much money as they wish in support of political candidates. It is why he ruled in Lawrence v. Texas that people have a constitutional right to have sex with other persons of the same gender. It is why in the case of Casey v. Planned Parenthood of Southeastern Pennsylvania he voted to reaffirm Roe v. Wade; even though he is personally opposed to abortion he respects the liberty of a woman to terminate a pregnancy in its early stages.

Kennedy's devotion to the principle of liberty is evident even in his literary style. The first word of his opinion in Lawrence v. Texas is "liberty."  The last word is "freedom." The first word in the joint plurality opinion he co-authored with Justices O'Connor and Souter is "liberty." The last word is also "liberty."

The foregoing are all cases dealing with fundamental individual rights, so it is understandable that Justice Kennedy would invoke the principle of "liberty." But Kennedy has invoked the concept of "liberty" even in cases that are concerned solely with the extent of governmental powers. In Clinton v. New York, for example, a separation of powers case involving the constitutionality of the federal Line Item Veto Act. Justice Kennedy was moved to write a separate concurring opinion in which he rebutted the notion, advanced by Justice Breyer, that the case did not involve an infringement of individual liberty. Kennedy wrote:

Just as Justice Kennedy found in Clinton v. New York that individual liberty was at stake when an enhanced power to rewrite legislation was concentrated in the Executive Branch, so he might find in this case that individual liberty is threatened by an unwarranted expansion of the power of the Legislative Branch to enact legislation requiring individuals to enter commerce.

Kennedy said as much during the first day of oral argument. Kennedy stated to Solicitor General Verrilli:

And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the Federal Government to the individual in a very fundamental way.

On Monday Solicitor General Donald Verrilli did not have a good answer to Kennedy's concern. Yesterday, however, General Verrilli used his last few minutes on rebuttal in the Medicaid portion of the case to return to this point, and I think the much-criticized advocate for the government hit a rhetorical home run. Here are Verrilli's closing remarks in full:

I'd like to take half a step back here, that this provision, the Medicaid expansion that we're talking about this afternoon and the provisions we talked about yesterday, we've been talking about them in terms of their effect as measures that solve problems, problems in the economic marketplace, that have resulted in millions of people not having health care because they can't afford insurance.

There is an important connection, a profound connection, between that problem and liberty. And I do think it's important that we not lose sight of that.

That in this population of Medicaid eligible people who will receive health care that they cannot now afford under this Medicaid expansion, there will be millions of people with chronic conditions like diabetes and heart disease, and as a result of the health care that they will get, they will be unshackled from the disabilities that those diseases put on them and have the opportunity to enjoy the blessings of liberty. 

And the same thing will be true for — for a husband whose wife is diagnosed with breast cancer and who won't face the prospect of being forced into bankruptcy to try to get care for his wife and face the risk of having to raise his children alone. And I could multiply example after example after example.

In a very fundamental way, this Medicaid expansion, as well as the provisions we discussed yesterday, secure of the blessings of liberty. And I think that that is important as the Court is considering these issues that that be kept in mind. The — the Congress struggled with the issue of how to deal with this profound problem of 40 million people without health care for many years, and it made a judgment, and its judgment is one that is, I think, in conformity with lots of experts thought, was the best complex of options to handle this problem.

Maybe they were right; maybe they weren't. But this is something about which the people of the United States can deliberate and they can vote, and if they think it needs to be changed, they can change it. And I would suggest to the Court, with profound respect for the Court's obligation to ensure that the Federal Government remains a government of enumerated powers, that this is not a case in any of its aspects that calls that into question. That this was a judgment of policy, that democratically accountable branches of this government made by their best lights.

And I would urge this Court to respect that judgment and ask that the Affordable Care Act, in its entirety, be upheld. Thank you.

That's exactly right. When we speak of constitutional rights, we speak of "negative liberties," the concept that the government may not invade our inalienable rights of freedom of speech, freedom of religion, and the right to privacy. But when we speak of constitutional powers we are really concerned with "positive liberties" – the right of the American people, through their government, to construct roads, build bridges, protect the weak, feed the hungry, shelter the homeless, free the oppressed, educate our children … and extend adequate access to medical care to all American citizens.

In his book Abraham Lincoln and the Second American Revolution, James McPherson draws a distinction between "positive liberty" and "negative liberty," and defines positive liberty as "freedom to achieve a status of freedom previously denied by disability or law." McPherson, at 62-63, 137-138 (1991). McPherson notes that the powers of the federal government greatly expanded under Abraham Lincoln, whose administration built the transcontinental railroads, created the land-grant colleges, and opened the west to settlement through enactment of the Homestead Act – all during the Civil War. After the War the American people quickly ratified the 13th, 14th, and 15th Amendments all of which granted enforcement powers to Congress to protect our rights against encroachment by the states. The continued expansion of Congressional power under the Commerce Clause and the Spending Clause in the 20th century does not represent an infringement of the liberty of individuals, but rather an enhancement of the right of the American people, through their democratically-elected representatives, to enhance their "positive liberty" by raising their standard of living and improving their quality of life.

I deeply hope that Justice Kennedy and the his colleagues on the Supreme Court observe the limitations of the judicial role in reviewing the constitutionality of economic legislation. This case does not involve an infringement of one of our "negative liberties." Instead it centers upon the power of our government to enhance our "positive liberties" by extending health care to all Americans.

Wilson Huhn teaches Constitutional Law at The University of Akron.

The Supreme Court heard oral argument today on the issue of whether the Anti-Injunction Act applies to the individual mandate of the Affordable Care Act.  The transcript of oral argument is available here.  The bottom line is that it looks like the Supreme Court will proceed to the merits and decide whether the individual mandate of the Affordable Care Act is constitutional.

Several news outlets are reporting that, from what the justices said during oral argument, the Court is likely to find that the Anti-Injunction Act does not apply.  See Jennifer Haberkorn, Kate Nocera, Jason Millman, Political Pro, Court watchers: SCOTUS to blow past the AIA; Lee Ross, Fox News, Supreme Court Signals It Won't Punt on ObamaCare Decision.

I agree with the conclusions of those reporters. If the Supreme Court rules that way, it means that the Court has jurisdiction to decide the case this year and will proceed to determine whether the individual mandate is constitutional. Let's analyze what the justices said during the first part of oral argument that supports that conclusion.

As described in this previous post, the federal Anti-Injunction Act prevents the courts from hearing challenges to federal tax laws until the taxes have been assessed. If the AIA applied in this case the courts would have to wait until 2015 to decide whether the Affordable Care Act is constitutional. Both the federal government and the parties challenging the contended that the AIA did not apply, but because this issue goes to the power of the courts to hear the case, the parties are not permitted to "stipulate" that the courts have jurisdiction.  Accordingly the Supreme Court appointed counsel as amici curiae to argue that the AIA does apply and to produce the best arguments in support of that proposition.

Attorney Robert A. Long argued on behalf of the appointed counsel.  The Supreme Court gave him a very tough time.  The numbers in bold below are to the page of the transcript of oral argument.

4.  Justice Scalia told attorney Long that the language of the Affordable Care Act that provides that the penalty enforcing the individual mandate is applied to the Internal Revenue Service, not to the courts.

5.  Attorney Long argued that the Anti-Injunction Act must apply in order the protect the interests of the government in being able to collect taxes with the interference of the courts.  Justice Kennedy pointed out that taxpayers still have to exhaust their administrative remedies before they can go to court, and that if the courts wanted they could apply that rule of administrative law.

7.  Then Chief Justice Roberts chimed in in support of Kennedy's point, saying that if the Anti-Injunction Act does not apply, then the rules against hearing pre-enforcement challenges to tax cases are not jurisdictional in nature; in other words, whether to hear the case at this time is discretionary with the courts, not binding. Basically, this means that the Court would have the choice whether to hear this case or not. Roberts also asked Long whether he thought that Helvering v. Davis, an older case that said that the government could waive jurisdictional issues, should be overruled.

8.  Justice Ginsburg then pointed out differences in wording between the Anti-Injunction Act and another federal statute, the Tax Injunction Act. The Tax Injunction Act, she indicated, was directed to the courts and was clearly jurisdiction, but the Anti-Injunction Act was directed to parties and therefore could be waived by the government.

9.  Justice Alito then asked whether any previously decided cases would have come out differently if the Anti-Injunction Act were interpreted as being directed to taxpayers and not the courts. Attorney Long admitted that all of those cases would have come out the same.

11.  Attorney Long said that the Congress has "acquiesced" in the ruling that the Anti-Injunction Act is jurisdictional.  Chief Justice Roberts said that because the courts have gone back and forth on whether the law is jurisdictional, it isn't clear what Congress was "acquiescing" to.

11.  Justice Kagan mentioned a case, South Carolina v. Regan, where the court issued a ruling saying that there was an "equitable exception: to Anti-Injunction Act.

12.  Justice Sotomayor said that she counted at least four cases where the federal courts allowed "waivers" to the Anti-Injunction Act and three other cases where the courts recognized "exceptions" to the law.

14.  Justice Sotomayor then returned to Justice Alito's policy question: does it make any practical difference whether the Anti-Injunction Act is jurisdictional or not?

15.  Justice Scalia then took it upon himself to respond to Justice Sotomayor's question: "You could say that about any jurisdictional rule."  That is, that the question implies that the government should simply be permitted to waive any rule, even if it were jurisdictional.  Justice Scalia rhetorically asked, "Why should there be any jurisdictional rules?"

16.  Justice Breyer then turned to another problem with the statute – is the penalty associated with the individual mandate a "tax"?  He pointed out that the Affordable Care Act calls it a "penalty," not a tax.

18.  Justice Scalia agreed that there was "at least some doubt" whether this penalty is a tax.  "I find it hard to think that this is clear."

19.  Justice Ginsburg stated that the penalty associated with the individual mandate is not a "revenue-raising" measure because if it works as intended everybody will purchase health insurance and no penalties will be paid.  Sotomayor noted that federal statutes distinguish between taxes and penalties. Breyer remarked that he had told his law clerk to look up every single case listed in one of the briefs on this point and found out that every one of those cases involved a tax or a penalty for failing to pay a tax, not a penalty like the one imposed for failing to purchase health insurance.

21.  Justice Kagan then pointed out that there were other taxes and penalties in the Affordable Care Act that were expressly made subject to the Anti-Injunction Act, and that Congress failed to do that with respect to the individual mandate penalty.  Long conceded, "They could have been clearer about saying the Anti-Injunction Act applied."

23.  Justice Kennedy asked about the unusual wording of the Anti-Injunction Act, and Attorney Long responded that it was an old statute – 1867 – and that would accout for the "odd" phrasing.

23.  Justice Ginsburg then asked about another issue that the plaintiffs had raised.  The plaintiffs claimed that they were not challenging the penalty, but only the requirement to purchase health insurance. Attorney Long quite reasonably responded that the penalty was the only way that the individual mandate was enforced and therrefore could not be separated from the mandate. Justice Alito and Justice Kagan had follow-up questions about this issue.

29.  Justice Sotomayor asked Attorney Long whether the Solicitor General's reading of the Anti-Injunction Act would create any problems.  The Solicitor General argued that the AIA should be interpreted to apply to taxes, to penalties associated with non-payment of taxes, and to penalties that Congress expressly says are subject to the AIA.  Attorney Long once again conceded that "the Solicitor General's reading would probably create the fewest problems."

During Attorney Long's argument, eight justices repeatedly and vigorously expressed doubts about the applicability of the Anti-Injunction Act to this case. Although I have read transcripts where the justices expressed more anger or frustration, I have never seen the justices so united in rejecting an attorney's position.  In tomorrow's morning's post I will analyze the judges' reactions to the arguments by the government and the parties challenging the applicability of the AIA.

Wilson Huhn teaches Constitutional Law at The University of Akron School of Law.

In the debate over the constitutionality of the federal health care reform law, health insurance companies have maintained a low profile.  The individual mandate was their idea; they wish that the mandate was stronger than it is; and now they are signalling that if the individual mandate is struck down by the Supreme Court, they can not and will not go along with the other insurance reforms in the PPACA.

The health insurance companies and the principal trade group that speaks for them, AHIP (America's Health Insurance Plans), have not explicitly supported the constitutionality of the individual mandate before the Supreme Court.  From a policy standpoint that is inexplicable. In 2008 the insurance industry embraced the concept of achieving universal heath care coverage through the private insurance market, and proposed that the law should require everybody to have health insurance. In its December, 2008, report entitled “Now is the Time for Health Care Reform: A Proposal to Achieve Universal Coverage, Affordability, Quality Improvement and Market Reform,” the AHIP Board of Directors took a courageous position:

Combine guarantee-issue coverage with no pre-existing condition exclusions with an enforceable individual mandate: For guarantee-issue to work, it is necessary for everyone to be brought into the system and participate in obtaining coverage. Achieving this objective will require specific attention to the mechanisms for making the mandate enforceable and may require coordinated action at multiple levels of government. Indeed, the importance of combining guarantee issue with an enforceable individual mandate is borne out by research and experience from the states. For example, a report by Milliman, Inc. found that states that enacted guarantee-issue laws in the absence of an individual coverage requirement saw a rise in insurance premiums, a reduction of individual insurance enrollment, and no significant decrease in the number of uninsured.

Why hasn't the health insurance industry more vigorously supported the constitutionality of the individual mandate? There may be several reasons. First, the mandate is not as strong as the industry wanted.  In its 2008 report it called for an "enforceable" individual mandate, but the PPACA will penalize people only $695 for not having health insurance, far less than such insurance would cost. The health insurers would prefer that the penalty be much higher, and even if the Supreme Court does uphold the law the industry will probably ask that the penalty be increased.

Political considerations may also lie at the base of the reason that the health insurance industry has muffled its support for the individual mandate. At this point in the election season it may not make sense for the pick sides between Republicans who oppose the individual mandate and Democrats who regard it as a necessary evil.  However, that does not mean that the industry is neutral on the subject. Quite the contrary.

On January 6 the insurance industry filed an amicus brief in the Supreme Court on the issue of severability in which the industry advised  the Court that if the individual mandate is struck down, other insurance reforms like guaranteed issue (the requirement that insurance companies sell policies to persons with preexisting conditions); guaranteed coverage (the requirement that those policies cover preexisting conditions); and community ratings (health insurance must cost the same for all persons in the community) should also be struck down because they are not "severable" from the individual mandate. In a press release announcing the filing of the brief, AHIP stated:

The brief is intended to serve as a resource to deepen the Court’s understanding of the real-world economic implications for consumers of delinking major provisions of the law that were widely understood to be companion solutions as the nation debated health care reform.

Yesterday the insurance companies issued yet another warning to the Court. In a press release the industry noted that:

opinion leaders of all stripes and news outlets have been noting the inextricable link between the market reforms included in the ACA and the individual mandate.

The press release quoted Senator Joe Lieberman stating, "Unless you have a mandate … the Affordable Care Act has to change;" Paul Krugman: "Simply requiring insurers cover people with pre-existing conditions … doesn't work;"  CBS News: "If the mandate is struck down, the requirement that insurance companies cover those with pre-existing conditions would become unworkable;"  Kaiser Health News: "Keeping the premiums affordable – for both individuals and the government – hinges on making sure health people enroll in insurance too."

Also yesterday the health insurance industry sent an even stronger signal to Congress through a story published in the Wall Street Journal. In an article by Louise Radnofsky entitled Insurers Set Plans in Case Mandate is Quashed, the author quoted several spokespersons for the health insurance industry as stating that if the individual mandate is declared unconstitutional then popular reforms like guaranteed coverage will have to be repealed. Radnofsky states:

Several officials from large health insurers said that if the mandate were struck down, their first priority would be persuading members of Congress to repeal two of the law's major insurance changes: a requirement to cover everyone regardless of his or her medical history, and limits on how much insurers can vary premiums based on age.

The health insurers' position is bolstered by a January, 2012, report from the Robert Woods Johnson Foundation by Matthew Buettgens and Caitlin Carroll entitled Eliminating the Individual Mandate: Effects on Premiums, Coverage, and Uncompensated Care. Buettgens and Carroll estimate that if the individual mandate is eliminated health insurance premiums would increase between 10% and 25% and the number of uninsured persons would increase by more than 50%.

There may be alternatives to the individual mandate. There may be other ways to encourage people to purchase health insurance. But the bottom line is that if the individual mandate is stuck down, guaranteed coverage and community rating will disappear with it.  People who are unable to procure or afford health insurance will either have to go without medical care or the taxpayers will have to pick up the tab.

Wilson Huhn is a professor of Constitutional Law at The University of Akron School of Law.

In the event that the Supreme Court strikes down the individual mandate of the Affordable Care Act, the Court will have to decide whether the remainder of the Act, or certain provisions of the Act, are "severable" from the individual mandate and therefore constitutional.  A number of organizations have filed amicus briefs asking the Court to spare specific provisions of the Act.  The number and significance of these provisions remind us how vast and encompassing this law is, and how unlikely it is that the Supreme Court will declare it unconstitutional.

The AARP and several other organizations who advocate on behalf of Medicare not surprisingly contend in their brief that certain provisions of the law strengthening Medicare should be insulated from being struck down with the individual mandate.  The provisions they hope to keep afloat include the elimination of the "donut hole" (a deductible) for prescription drugs; access to preventive health services; access to chemotherapy and dialysis; incentives to improve quality of care; provisions that would permit persons receiving long-term care to remain in the community and avoid institutionalization; provisions improving coordination of services; and provisions aimed at preventing neglect and abuse of the elderly.

The amicus brief of the National Indian Health Board, other Indian organizations and tribes argues that the reauthorization of the Indian Health Care Improvement Act and other provisions of the ACA improving medical services to Indians are severable from the individual mandate and should be preserved.

In its brief the Washington & Lee University Law School Black Lung Clinic argues that if the individual mandate is struck down the remainder of the ACA should be upheld in its entirety, particularly Section 1556, the Black Lung Benefits Act, which extends eligibility for federal benefits for several of the clinic's clients.

A brief filed by about 50 Asian-American advocacy organizations maintains that the Affordable Care Act contains a number of provisions that address the "unique health care needs" of Asian-Americans and that will increase access to health care for all Americans.  These provisions include the SHOP Act that extends tax credits to small businesses allowing them to provide health care to owners and employees; Medicaid expansion; tax credits for individuals to purchase health insurance; enhanced coverage for dependents; and elimination of exclusions for preexisting conditions.  The brief also identifies several provisions of the law creating programs specifically addressing the health needs of minority communities including the promotion of culturally and linguistically appropriate care, increasing the diversity of the medical workforce, and enhanced data collection and analysis.

The brief of the American Public Health Association, American Lung Association, and about a dozen similar advocacy groups ask the Court to preserve a number of preventive and public health programs that are addressed to the treatment of chronic diseases in the United States: "Amici public health and prevention organizations write here to emphasize the crucial importance of federal public health and prevention initiatives not only for the well-being of millions of individuals but also for the United States itself."

A number of physician groups including the Society for Internal Medicine point out in their brief (as I have) that the parties who argue that the individual mandate is so integral to the entire Affordable Care Act are in effect making "a lengthy concession that the minimum coverage provision is an 'essential part of a larger regulation of economic activity' and therefore constitutional" under the Necessary and Proper Clause.  Somewhat contradictorily, in their brief these groups ask the Court to uphold as severable from the individual mandate provisions of the law extending access to health care to underserved areas, fostering primary care, and promoting comparative effectiveness research.

A number of amicus briefs argue that the Act as a whole is entirely severable from the individual mandate.  This is the position taken in the brief submitted by David R. Riemer and Community Advocates, a Milwaukee activist and group that assists the poor in gaining access to medical care.  They say:

One of the ACA's key goals is to reduce the number of uninsured Americans.  Regardless of the fate of the individual coverage provision, the ACA will move the nation a long way towards achieving this goal.

Eleven states, the District of Columbia, and the Governor of Washington contend in their amicus brief that the individual mandate is severable from the remainder of the Act in part because some of the reforms have already gone into effect two years before the mandate becomes effective, and in part because many states have taken action in reliance upon the validity of the remainder of the Act.

In a very brief brief, the Missouri Attorney General identifies five specific provisions that have already gone into effect as illustrative of parts of the law that should be preserved even if the individual mandate is struck down: funding for maternal, infant, and early childhood care; the prevention and public health fund; funding for school-based health centers; nutritional labeling for chain restaurants; and break time for nursing mothers.

Michigan Legal Services filed one the most heartfelt briefs on severability.  Its brief contends that the individual mandate is fully severable from the remainder of the Act because the Act as a whole is intended to extend medical care to the poor, and that its remaining portions should therefore stay in effect.  The brief is dedicated to "those who have suffered under the present system – especially to the thousands who have died because they had no insurance and no access to affordable care."

The amicus brief filed by the United States Chamber of Commerce on the issue of severability actually presents a highly persuasive argument in support of the constitutionality of the individual mandate in the Affordable Care Act.

The Chamber of Commerce, like several other business interests, oppose the Affordable Care Act not so much because they dislike the individual mandate but because they oppose the employer mandate.  In its brief to the Supreme Court arguing against severability, however, the Chamber of Commerce unintentionally advances powerful arguments that will persuade the Supreme Court to uphold the constitutionality of the individual mandate, and to do so right now.

In this particular brief the Chamber of Commerce contends that the rest of the Affordable Care Act is not "severable" from the individual mandate – that is, if the Court rules that the individual mandate is unconstitutional, it must strike down the entire Affordable Care Act.  The central theme of the Chamber's brief is that the individual mandate is "essential" to the remainder of the Act.  The word "essential" appears 31 times in the brief – the "essential" nature of the individual mandate is a drumbeat, a lietmotif.  A few examples:

The individual mandate “is essential to creating effective health insurance markets …"

The mandate is “essential” to much more of the Act than the guaranteed-issue and community-rating reforms. …

Attempting to decipher how the market for health insurance will respond when one "essential"thread is pulled, in a statute this complicated and vast, is a task that Congress is institutionally much better situated to undertake. …

The mandate is at least is essential to the operation of the private insurance reforms in Title I of the Act, but there can be no doubt that invalidating the mandate will also affect the remainder of the Act’s operation, and its overarching purpose of expanding coverage to nearly all Americans. …

Judicial restraint and a candid recognition of the institutional limitations of the judiciary require rejecting the claim that the “essential” aspect of such a vast and complex regulatory scheme can be severed without consequence. …

As demonstrated above, the individual mandate is "essential" to much more than just those two sets of reforms. …

More important, the PPACA’s sheer complexity, the interdependence of its provisions, and its immense regulatory reach render it unlike any statute at issue in the Court’s modern severability jurisprudence.

As we implicitly acknowledged in Lopez, however, Congress's authority to enact laws necessary and proper for the regulation of interstate commerce is not limited to laws directed against economic activities that have a substantial effect on interstate commerce.  Though the conduct in Lopez was not economic, the Court nevertheless recognized that it could be regulated as "an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated."

The uncertainty over which provisions of the PPACA will remain continues to act as an enormous drag on American businesses and the economy. Swift resolution of the severability question is critically important, and this Court should therefore provide a definitive answer now, without the necessity for remand.

Some amicus briefs remind me of that old Pete Seeger song, Which Side Are You On?

Interested Americans have filed dozens of amicus briefs in the Supreme Court of the United States arguing for and against the constitutionality of the Affordable Care Act.  There are a number of things to take into account in deciding whether to file an amicus brief.  One consideration, for example, is whether one has anything new to say that has not already been covered by the courts or the parties.  Another even more basic consideration, you would think, is whether one is going to help or hurt the cause that one purports to support.

Single Payer Action and fifty doctors filed an amicus brief contending that the Affordable Care Act is unconstitutional because it doesn't go far enough!  They support the adoption of a government-run health care system, and decry the Affordable Care Act as a halfway measure that will not do enough to ensure health care coverage for Americans.  They contend that for-profit health insurance companies will routinely deny coverage and that the law will leave too many people uninsured.

Single Payer Action's consitutional analysis is that the individual mandate is not "necessary" (as in "Necessary and Proper") because the federal government could have simply extended Medicare or Veteran's Health Administration benefits to everybody.  I am not persuaded by this argument.  It is of course true that the individual mandate would not be "necessary" if the government were to take over paying for or delivering health care.  But it is necessary to the particular program of regulation that Congress enacted in the Affordable Care Act.  The group concedes that the Affordable Care Act would not work without the individual mandate.  They simply wish that Congress had enacted another plan of regulation altogether.

Single Payer Action explains its position in the introductory portion of their brief:

This is not an isolated position.  Surveys show while Americans are about equally divided about the wisdom of the Affordable Care Act and whether it should be repealed, about one-fourth of those opposing the Act – about 13% of Americans – would prefer that "the law had gone further."  See Associated Press Repeal?: Most Americans Believe Health Care Reform Did Not Go Far Enough, Poll Finds (September 25, 2010); Washington Post – ABC News Poll (January 16, 2011); CNN Poll: Time Doesn't Change Views on Health Care Law (March 23, 2011).

It is certainly legitimate for Single Payer Action and other groups to support the adoption of a government-funded or government-operated system like Canada's or Britain's.  But such a system is not about to be adopted in the United States.  When the Democratic Party controlled both Houses of Congress in 2009-2010 it was not even able to include a "public option" in the Affordable Care Act, let alone make it the exclusive method of paying for health care.  In this country with its strong history of reliance on the private sector it makes sense to try to achieve universal coverage through individually mandated private health insurance.  If that doesn't work we can enact more comprehensive reform.

It took a monumental effort to enact the Affordable Care Act.  Groups like Single Payer Action would throw all that away on the chimerical notion that they would be closer to their goal of universal coverage if we started over.

Wilson Huhn teaches Constitutional Law at The University of Akron School of Law.

Mary Brown, a lead plaintiff in the challenge against mandated health insurance, has filed for bankruptcy in part because of her husband's unpaid health care bills.  See Annie-Rose Strasser,  ThinkProgress, Lead Plaintiff In Health Care Reform Suit Files For Bankruptcy With Medical Debt.  There is also some question as to whether she is uninsured or whether she now has health insurance.  Oral argument is in two weeks; think it'll come up?

Over the next couple of months I will be reviewing the briefs filed in the health care case pending before the Supreme Court of the United States.  Today's entry concerns a reply brief filed by Solicitor General Donald Verrilli regarding a jurisdictional issue arising under the federal Anti-Injunction Act.

Yesterday I received in the mail a reply brief from the Solicitor General on the issue whether the Court should dismiss the case for lack of jurisdiction under the Anti-Injunction Act.  It does something I thought was not possible.  It makes a persuasive argument for the proposition that the Anti-Injuction Act does not apply to the penalty provision of the Affordable Care Act.  The brief walks a fine line, though, because the federal government does not wish to weaken the Anti-Injunction Act.  Accordingly, the SG's brief also rebuts a number of arguments proposed by the respondents that would have the effect of gutting the Anti-Injunction Act.

Beginning January 1, 2014, the Affordable Care Act imposes a penalty on any person who does not have health insurance coverage.  The penalty is collected with the income tax, and amounts to 2.5% of income up to a maximum of $675 per person.

The General Welfare Clause of the Constitution gives Congress the power to enact taxes, duties, and excises.  The federal government quite naturally contends that the enforcement mechanism of the Affordable Care Act constitutes a "tax" for purposes of the General Welfare Clause.  In other words, when Congress enacted the individual mandate it was exercising the "power of the purse."

The problem with this case is that the federal Anti-Injunction Act prohibits any person from challenging the constitutionality of tax legislation until the tax is assessed.  The "penalty" associated with the Affordable Care Act will not be assessed until April 15, 2015.  Accordingly, if this law constitutes a "tax" under the Anti-Injunction Act the courts should wait until then to decide the case.

The SG's brief presents a seeming contradiction: that the penalty associated with the individual mandate is a "tax" within the meaning of the General Welfare Clause of the Constitution, but that it is not a tax for puposes of the Anti-Injunction Act.  How is this miracle achieved?

Verrilli contends that as a matter of statutory construction neither the Affordable Care Act nor the Anti-Injunction Act were intended to prevent the courts from determining the constitutionality of the individual mandate.  He notes that the Affordable Care Act was amended to call the enforcement mechanism a "penalty" rather than a tax.  He observes that the law instructs to collect the penalty "in the same manner" as taxes, but is careful not to call it a tax.  Most significantly, the Affordable Care Act does not provide that the   "penalty" is protected from pre-enforcement challenge under the Anti-Injunction Act, as other laws do.  Therefore, purely as a matter of statutory construction, this penalty which is a "tax" for purposes of the Constitution is not a "tax" for purposes of the Anti-Injunction Act.

This argument makes sense because Congress probably wanted the courts to determine the constitutionality of this law before it goes into effect.  No-one – not the government, not the states, not the individual plaintiffs – wants to wait until 2015 to find out whether this law is constitutional.  The Affordable Care Act creates dozens of offices and bureaus within the federal government as well as 50 state "exchanges" for the sale of health insurance.  Hundreds of billions of dollars are at stake.  It makes sense to hear the case now.  It is appropriate to assume that this was Congress' intent.

The rest of the government's brief is devoted to rebutting the arguments of the parties challenging the constitutionality of the Affordable Care Act that would weaken the Anti-Injunction Act.  The various states and individuals who brought this lawsuit contend that since both they and the government think that the Anti-Injunction Act does not apply, the courts are free to overlook the Act and hear the case.  In rebuttal, Verrilli cites cases for the proposition that the Anti-Injunction Act may not be waived by the parties; that it is in fact a jurisdictional provision abolishing the power of the courts to hear pre-enforcement challenges to tax laws, and not simply a law that restricts taxpayers from filing those challenges.

The Solicitor General also rejects the respondents' contention that they are only challenging the portion of the Affordable Care Act that imposes the individual mandate and are not challenging the penalty provision.  The SG correctly notes that the individual mandate is not a criminal law; there is no other enforcement mechanism other than the "tax penalty" in question.  And, in any event, the SG notes that the respondents' own complaint that started this case expressly challenged the constitutionality of the penalty imposed by the Affordable Care for failure to maintain insurance coverage.

In the final portion of his reply brief the SG restates its position that the states lack standing to challenge the individual mandate, so their arguments regarding the applicability of the Anti-Injunction Act are irrelevant.

All in all, it's a great brief.  If, however, the Supreme Court disagrees with the parties and finds that the Anti-Injunction Act applies to this case, it will dismiss the case for lack of jurisdiction, and the parties will have to refile in 2015.

Wilson Huhn is the author of "ObamaCare: Is It Necessary, What Will It Accomplish, Is It Constitutional" available from Amazon for Kindle or Kindle for PC.  He also submitted a brief to the Supreme Court for a committee of professors regarding the constitutionality of the individual mandate provision of the Affordable Care Act.

The economics of funding for birth control under a system of universal health care complicate the debate but simplify the solution.

When every person pays for his or her own medical care the decision whether to use birth control is individual and private.  When medical care is paid for by health insurance, however, every policyholder or employer may be said to "pay" for other people's  medical care.  And when government subsidies for health insurance are added to the mix, every taxpayer may be said to pay for everybody else's health care.

In the dispute over funding for birth control conservative religious organizations are pitted against those persons who are dedicated to promoting women's health and preserving reproductive freedom.  The religious institutions that consider birth control to be a sin object to providing birth control coverage to their employees.  Normally this would have the effect of denying this type of medical care to those employees.

However, the complicating (or simplifying) factor in the debate is that birth control is much less expensive than childbirth and infinitely less expensive than bearing and raising a child.  As a consequence, from a purely economic perspective, health insurers have every incentive to offer free access to contraception.  If this is not permitted by law, then insurers will simply find another way to provide these services, for example by contributing to organizations such as Planned Parenthood who will provide these services to their policyholders.  The savings will pay for themselves many times over. 

The underlying economic factors are precisely the same for abortion, but funding for abortions generates far more opposition than funding for birth control because all persons – not just conservatives – have reservations about the procedure.  Even the supporters of abortion rights do not consider abortion to be good in itself, merely a necessary concession to the principles of freedom of choice and the right of women to control their own bodies.  Furthermore, if birth control were universally available and diligently practiced by those who do not wish to have children, abortions would be necessary only in cases of rape, incest, or to preserve the health or life of the woman.  In general, although some religious institutions do not wish any persons to use birth control, the practice quite reasonably does not generate the level of oppostion that abortion does.  Accordingly, it should be easy to reach a compromise whereby either private insurers or the government pays for birth control coverage by providing it free of charge to policyholders or Medicaid recipients.

As we move closer towards a system of universal health care, one way or another birth control will be available to women at no cost.

Wilson Huhn has taught Constitutional Law at the University of Akron for longer than "Law and Order" has been on television.  He the author of "ObamaCare: Is It Necessary, What Will It Accomplish, Is It Constitutional" and "The Five Types of Legal Argument."  Drafts of his academic publications are available from the Social Science Research Network.  He maintains a website on Constitutional Law where his two-volume casebook "American Constitutional Law" is available to his own students at no charge.

Pew Research Center released a study today on the wealth and income gap between the young and the old.  Today, people over 65 have a net worth that is 47 times greater than the net worth of adults under 35.  They even earn more money than young adults.

The Pew Research Center study is The Rising Age Gap in Economic Well-Being: The Old Prosper Relative to the Young.   The following chart shows that Americans over 65 have an average net worth of $170,494; Americans under the age of 35 have an average net worth of $3,662. 

Generations ago Social Security and Medicare were adopted because retired folks, at that time, would otherwise have starved and or gone without medical care.  But today, persons over the age of 65 not only own a vast amount of wealth, they also earn more income than young people.  Pew finds that the average older American earns $43,401, compared to $38,555 for the average young person.

This wide and growing disparity in wealth calls into question the basic fairness of the present social welfare system.  In fact, it stands that system on its head.  At a minimum, social security and Medicare should be means-tested. 

The age gap in wealth also reinforces the wisdom and fairness of the Patient Protection and Affordable Care Act.  Older folks already have a safety net that guarantees them adequate medical care.  Younger folks deserve that too.  When the PPACA goes into effect in 2014 it will make it possible for young families to purchase health insurance.  Refundable tax credits will be provided to low income earners so that they can afford adequate coverage for themselves and their families.

It will not long before I qualify for Medicare.  But the young people are our future, and if we wish to preserve our country we must find a way to provide them with appropriate medical care.  Older Americans and the richest one percent would be wise to embrace the PPACA so as to enable their children and grandchildren to live healthy and productive lives.

This post summarizes the constitutional issues that the Supreme Court will have to determine in addressing the constitutionality of the individual mandate contained in the 2010 federal health care law.

The Patient Protection and Affordable Care Act was signed into law by President Barack Obama on March 23, 2010.  One provision of that law, the "individual mandate," is politically unpopular and has been challenged in the courts on the ground that Congress lacks the power under the Constitution to enact it.

The individual mandate of the PPACA requires all individuals above a certain income level to maintain health insurance coverage.  This provision is not a criminal law.  Instead, people who do not have health insurance will have to pay a civil penalty along with their income tax.  This penalty is phased in over a period of years.  It is measured by a person's income and will eventually amount to 2.5% of income up to a maximum of $695 for an individual or $2,500 for a family of four.

The Supreme Court will be called upon to decide the following issues:

I.  Do the Federal Courts Have Subject Matter Jurisdiction to Decide These Cases?

A.  Do the plaintiffs have "standing" to bring these lawsuits and are the lawsuits "ripe"?

Under the Constitution the federal courts have jurisdiction to hear "cases" that are brought under the Constitution or federal statutes.  These cases obviously involve "federal questions" in that they challenge the constitutionality of federal laws, but the federal courts may only resolve actual disuptes, not theoretical ones – the plaintiffs must show that they will be harmed if the individual mandate is upheld.  Some of the lower courts have ruled that the states challenging this law do not have standing because the states are not affected by the individual mandate.  And some lower courts have ruled that the individuals challenging the law because do not have standing, or that the case isn't "ripe," because the law doesn't go into effect until January 1, 2014, and until then we won't know whether the individual plaintiffs will have decided to purchase health insurance after all (one of the plaintiffs dropped out of the litigation because she purchased health insurance while the suit was pending).  Several of the individual plaintiffs say that they have standing presently because they are changing their spending and savings habits now in preperation for when the law goes into effect.  My prediction of how the court will rule on this question: the individual plaintiffs have standing, the states do not.

B.  Are these lawsuits barred by the Tax Anti-Injunction Act?

Under federal law, taxpayers may not bring a lawsuit challenging a tax law until the law goes into effect.  The individual mandate is enforced by imposing a penalty that looks a lot like an excise tax – it is codified in the Internal Revenue Code under "Miscellaneous Excise Taxes," the individual responsible for paying the penalty is referred to as the "taxpayer," the penalty is collected along with income taxes and is based upon income.  On the other hand, President Obama and congressional leaders denied that the individual mandate is a tax.  On yet another hand Republican leaders have insisted that it is a tax.  The case law tends to indicate that the Tax Anti-Injunction Act applies to any civil penalty, fee, or assessment, and the Fourth Circuit ruled that the federal courts may not determine the constituitonality of the individual mandate until it goes into effect.  My prediction: The Supreme Court may very well decide to kick this case down the road by finding that the Tax Anti-Injunction Act applies, but it will be careful to say that it is not ruling that Congress enacted this law under the General Welfare Clause (see below).

II.  Does Congress Have the Power Under the Constitution to Enact the Individual Mandate?

No court takes seriously the suggestion that the individual mandate interferes with anyone's constitutional rights.  We do not have a constitutional right not to have health insurance.  Instead, the constitutional issue is one of power – specifically, does Congress have power under the Constitution to enact the individual mandate?  Congress is endowed with certain enumerated powers, and if none of these are applicable the law is unconstitutional.  Some lower court judges have held that Congress does have power to enact the individual mandate under either the General Welfare Clause, the Commerce Clause, or the Necessary and Proper Clause.  Other judges have struck down the law on the ground that none of these provisions of the Constitution apply.

A.  Does Congress have such power under the General Welfare Clause?

Article I, Section 8, Clause 1 of the Constitution is the "power of the purse" and it grants Congress broad power to enact taxes and spend money  to promote the "general welfare."  This law was definitely adopted to promote the general welfare; the courts defer to Congress on that issue.  The question that the Supreme Court will have to decide is whether or not the individual mandate is a "tax" within the meaning of the General Welfare Clause.  If not – if it is simply a "penalty" but not a "tax" – then this portion of the Constituion does not give Congress the power to enact this law.  The Supreme Court used to distinguish between "taxes" and "penalties" in determining the constitutionality of "regulatory taxes" but it has not drawn that distinction in this context for generations.  My prediction: if the court decides to revive the distinction between "taxes" and "penalties" it will find that this is a tax because it is not imposed by a court or a regulatory body following a hearing but rather is simply payable as an additional tax.  The failure to have health insurance is not "wrongdoing" in the sense that speeding is and the penalty is not a "fine."  Instead, the individual mandate gives people a choice between purchasing health insurance or paying an additional tax.

B.  Does Congress have such power under the Commerce Clause?

Under Article I, Section 8, Clause 3 Congress has the power to regulate commerce among the several states.  The federal government argues (and Congress specifically found) that people's lack of health insurance is having a substantial effect – indeed, a profound effect – on interstate commerce, and that therefore it is constitutional for Congress to require individuals to maintain insurance.  The plaintiffs make two arguments: first, that Congress is not regulating economic activity but rather non-activity – that it is regulating "nothing"; second, that Congress is invading the reserved powers of the states when it requires individuals to maintain health insurance.  My prediction:  The challengers' first argument is wholly semantic.  The only justices who might be persuaded by it are Antonin Scalia and Clarence Thomas.  The challengers' second argument has more merit, and other justices might agree that the states have primary responsibility for ensuring the well-being of their citizens.  The problem is that Congress has enacted a host of laws regulating the health care industry for the well-being of individual citizens – EMTALA, ERISA, HIPAA – and it is simply not true that the states have traditionally exercised exclusive jurisdiction over the regulation of health insurance.  I think that the Supreme Court will uphold the law under the Commerce Clause.

C.  Does Congress have such power under the Necessary and Proper Clause?

Article I, Section 8, Clause 18 of the Constitution grants Congress the power to enact all laws necessary and proper for carrying into execution its enumerated powers, and the Supreme Court has repeatedly stated that Congress has the power to include provisions in a law that are essential to a broad, comprehensive plan regulating some aspect of interstate commerce.  The individual mandate is without doubt the key to this law.  Insurance companies insisted that they could not be forced to sell health insurance to people with preexisting conditions or to provide comprehensive health insurance unless healthy people were also purchasing health insurance – otherwise people wouldn't purchase health insurance until they were injured or ill.  Furthermore, the cost of health insurance (and thus the viability of the entire program) depends upon vastly expanding the pool of people who are insured.  Accordingly, the individual mandate is very important indeed to the overall operation of the program.  My prediction: this is the strongest argument for upholding the law, and the one that might appeal the most to the justices because they could say that the individual mandate is constitutional because it is necessary to the remainder of the law even if it is not a "tax" or a "regulation of commerce."  In other words, they could bypass the previous two issues and simply uphold the law as a necessary cog in the big wheel of health insurance reform.

III.  Severability – If the Individual Mandate Is Found Unconstitutional Is the Entire PPACA Also Unconstitutional?

The PPACA does not contain a severability clause.  On the contrary, not only does it quite obviously lack a severability clause, the Congressional findings which are a part of the Act repeatedly states that the individual mandate is essential to other key provisions of the law.  The lower courts that have struck down the individual mandate have split on the question of whether that makes the entire law unconstitutional, or only portions of it, or whether the individual mandate is completely severable from the remainder of the Act.  My prediction – The Supreme Court will either dismiss this case because of the Tax Anti-Injunction Act or uphold the law under the Necessary and Proper Clause, so it will not reach the issue of severability.  If it does strike down the individual mandate then at a minimum it will also have to strike down the provisions relating to health insurance coverage: guaranteed issue (insurance companies must sell you a policy even if you have preexisting conditions); guaranteed coverage (insurance policies must cover preexisting conditions); minimum medical loss ratios (insurance policies must on the average cover a certain percentage of policyholders' medical expenses).  A number of other provisions of the Act were based upon the assumption that nearly every citizen would be covered by health insurance and that the average cost of health insurance would decline as more people are covered.  These include: the elimination of Medicare payments to hospitals for treating indigent patients; the employer mandate (employers must either offer health insurance or pay a penalty); government subsidies (payments to low-income persons to purchase health insurance); and the expansion of Medicaid.  In short, nearly all of the Affordable Care Act is dependent upon the individual mandate, so it is unconstitutional, the rest of the Act is as well.  Of course, that's just another way of saying that the individual mandate is essential to the remainder of the Act, which is the strongest argument for saying that the individual mandate is "necessary and proper" to this broad plan of federal regulation of health insurance.

We'll see!

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790.

Six district courts and three circuit courts of appeal have ruled on the constituitonality of the Patient Protection and Affordable Care Act.  So far, the results are evenly divided.

The only portion of the Affordable Care Act that has been found unconstitutional by some courts is the "individual mandate" – the requirement that citizens must either maintain health insurance or pay a tax penalty.  Three district courts have ruled that the individual mandate is constitutional and three have ruled that it is unconstitutional.  On appeal, one Court of Appeals ruled that the law is unconstitutional, one ruled that the law is constitutional, and one held that the federal courts do not have jurisdiction to decide the issue until the law goes into effect in 2014.

Here are the cases and the rulings in each case:

Circuit Courts of Appeal:

Virginia v. Sebelius, __ F.3d __ (4th Cir. 2011), 2011 WL 3925617 (dismissing state’s challenge to PPACA for lack of standing), reversing 728 F.Supp.2d 768 (E.D. Va. 2010) (striking down PPACA)

Liberty University v. Geithner, __ F.3d__, (4th Cir. 2011), 2011 WL 3962915 (dismissing private parties’ challenge to individual mandate on ground that action is barred by Tax Anti-Injunction Act, and (in dicta) upholding constitutionality of PPACA under General Welfare Clause and Commerce Clause), reversing 753 F.Supp.2d 611 (W.D. Va.) (upholding individual mandate)

Florida v. U.S. Department of Health and Human Services, 648 F.3d 1235 (11th Cir. 2011) (striking down individual mandate as beyond Congress’ power to enact under General Welfare Clause and Commerce Clause), affirming in part and reversing in part 780 F.Supp.2d 1256 (N.D. Fla. 2011) (striking down entire PPACA)

Thomas More Law Center v. Obama, 651 F.3d 529 (6th Cir. 2011) (upholding individual mandate under Commerce Clause against facial challenge), affirming 720 F.Supp.2d 882 (E.D. Mich. 2010)

Other District Court Rulings:

Mead v. Holder, 766 F.Supp.2d 16 (D.D.C. 2011) (upholding individual mandate), on appeal to D.C. Cir. sub nom. Seven Sky v. Holder

Goudy-Bachman v. U.S. Department of Health and Human Services, __ F.Supp.2d __, 2011 WL 4072875 (M.D.Pa. 2011) (striking down individual mandate and three other provisions of PPACA as non-severable)

The Supreme Court will almost certainly agree to review these decisions and will likely hand down a decision by the end of June, 2012.  In the next post I will summarize the issues that have arisen concerning the constituitonality of the individual mandate.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790.

Today the New England Journal of Medicine published three significant articles on law and medicine.  In today's post I review an article Malpractice Risk According to Physician Specialty by Anupam B. Jena, M.D., Ph.D., Seth Seabury, Ph.D., Darius Lakdawalla, Ph.D., and Amitabh Chandra, Ph.D.

The article's findings are consistent with other research studies such as the AMA Survey of Physicians and information from the National Practitioner Data Bank.  The study's findings and conclusions are also consistent with the understanding of attorneys who practice in this field.  Some of the relevant findings from the study:

1.  Number of Claims Annually and Over the Course of a Career.  Within any particular year, on the average 5% of physicians in low-risk specialties (such as family medicine, pediatrics, and psychiatry) and 22% of physicians in high-risk specialties (including obstetrics and various surgical specialties) faced medical claims.  Physicians in high-risk specialties are virtually certain to be sued at some point in the course of their careers.  The researchers found that more than 99% of doctors in high-risk specialties (including most surgeons) are likely to be sued before the age of 65.  In low risk specialties 75% of physicians will have been sued at some point during their careers.

2.  Claims paid Annually and Over the Course of a Career.  During any particular year, only 1% of doctors in low-risk specialties and 5% of doctors in high-risk specialties paid a claim in any particular year, and over the course of a career the figures are 19% and 71% respectively. 

3.  Validity of Claims.  The authors estimated that only 20% of medical malpractice claims result in payment – settlement or a judgment - and that 80% of medical malpractice claims result in no indemnity payment.  Citing another study, the authors note that 40% of medical claims did not assert medical error.  The article reports that despite their clear lack of merit these claims account for 16% of the total costs of the medical malpractice system.

4.  Size of Payments.  Interestingly enough, the largest average payments were linked to malpractice by pediatricians, a relatively low-risk specialty whose practitioners sustain fewer numbers of claims than many others.  However, this statistic may be affected by the fact that payments in excess of insurance coverage were not figured into the study.  The medical specialty sustaining the highest number of awards in excess of $1 million were obstetricians.  The authors of the study reasonably suggest that compensable injuries to children result in larger indemnity awards than injuries to adult patients.

The researchers also note that doctors perception of the risks of medical malpractice litigation do not correlate with the actual risk of being sued or the size of average awards. 

Our results may speak to why physicians consistently report concern over malpractice and the intense pressure to practice defensive medicine, despite evidence that the scope of defensive medicine is modest. Concern among physicians over malpractice risk varies far less considerably across states than do objective measures of malpractice risk according to state …

Although the frequency and average size of paid claims may not fully explain perceptions among physicians, one may speculate that the large number of claims that do not lead to payment may shape perceived malpractice risk. Physicians can insure against indemnity payments through malpractice insurance, but they cannot insure against the indirect costs of litigation, such as time, stress, added work, and reputational damage.

"Time, stress, added work, and reputational damage."  These are indeed "indirect costs" of the hugely inefficient system we have created for compensation for medical error.  The authors conclude:

High rates of malpractice claims that do not lead to indemnity payments, as well as a high cumulative career malpractice risk in both high- and low-risk specialties, may help to explain perceived malpractice risk among U.S. physicians.

Another "indirect cost" of the current system is that medical malpractice claims are so expensive to prosecute that the vast majority of injured patients have no effective recourse.  At a minimum it costs tens of thousands of dollars to prosecute a case of medical malpractice.  Patients who suffer only moderate injury or who incur unnecessary expense are never compensated.  The next round of "tort reform" should take into account not only the inefficiency and injustice to physicians who are routinely wrongfully accused of malpractice, but also the interests of patients who suffer small or moderate injuries at the hands of medical professionals.

Here is a summary of Judge Graham's dissenting opinion from the decision of the Sixth Circuit in Obama v. Thomas More Law Center.  Judge Graham would strike down the individual mandate of the PPACA as unconstitutional.

Judge James Graham, a District Court judge sitting by assignment on the Sixth Circuit Court of Appeals, dissented from the decision of the court in Obama v. Thomas More Law Center.  He concluded that Congress lacks the authority under the Commerce Clause to enact the individual mandate contained in the Patient Protection and Affordable Care Act.

Judge Graham rejects the government's contention that the individual mandate of the PPACA may be properly characterized as a regulation of the health care industry rather than the health insurance industry:

The requirement that all citizens obtain health insurance does not depend on them receiving health care services in the first place. Individuals must carry insurance each and every month regardless of whether they have actually entered the market for health services. Simply put, the mandate does not regulate the commercial activity of obtaining health care. It regulates the status of being uninsured.

However, Judge Graham also purports to reject the challengers' distinction between "activity" and "inactivity" as a basis for determining the scope of Congress' authority under the Commerce Clause.  He states:

Much has been made in this litigation of the distinction between activity and inactivity. The Supreme Court has often employed the word “activity” to describe the regulatory subjects of Congress’s power over interstate commerce. See Wickard, 317 U.S. at 125; Lopez, 514 U.S. at 559; Morrison, 529 U.S. at 609-10; Raich, 545 U.S. at 17. Yet I do not interpret those cases as drawing a constitutional line between activity and inactivity. That distinction would suffer from the same failings as the “direct” and “indirect” effects test of prior Commerce Clause jurisprudence. See NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 36-38 (1937) (rejecting the direct/indirect distinction and stating that the question of Congress’s authority is “necessarily one of degree”); Lopez, 514 U.S. at 579 (Kennedy, J., concurring) (noting that questions of constitutional law are often “not susceptible to application of bright and clear lines”). Imposing an activity/inactivity line could hinder Congress in future cases from removing burdens on commerce that certain classes of individuals have passively enabled. See he mechanical United States v. Faasse, 265 F.3d 475, 487 (6th Cir. 2001) (upholding the constitutionality of the Child Support Recovery Act and rejecting the argument that the willful failure to make a court-ordered, out-of-state child support payment from California to Michigan was insufficient for Commerce Clause purposes).

Instead, Judge Graham finds that the activity being regulated by the individual mandate - a person's failure to have health insurance – is not "economic" in nature:

The inquiry should start by considering the “economic nature of the regulated activity.” Morrison, 529 U.S. at 610; see also Lopez, 514 U.S. at 559-61 (finding that possession of a gun in a school zone was not an economic activity); Raich, 545 U.S. at 25 (finding that growing and consuming a crop was “quintessentially economic”).  Congress here attempts to regulate a class of individuals who have refrained from purchasing health insurance. The conduct being regulated is the decision not to enter the market for insurance. Plaintiffs have not bought or sold a good or service, nor have they manufactured, distributed, or consumed a commodity. See Raich, 545 U.S. at 25-26 (defining “economics” as the “production, distribution, and consumption of commodities”). Rather, they are strangers to the health insurance market. This readily differentiates the present case from others cited by the government. See Wickard, 317 U.S. at 128 (Filburn cultivated wheat); Raich, 545 U.S. at 19 (Raich cultivated marijuana); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 243 (1964) (appellant operated a motel). Certainly there is an interstate market for health insurance, but, unlike the plaintiffs in Wickard and Raich, plaintiffs here have not entered the market. In no other instance has Congress before attempted to force a non-participant into a market.

Despite his skepticism about the "activity/inactivity" dichotomy, Judge Graham bases his decision that the individual mandate is unconstitutional on the ground that an individual's failure to have health insurance is not "economic activity":

Certainly, plaintiffs’ conduct may be considered in the aggregate with the conduct of similarly-situated individuals, see Raich, 545 U.S. at 20; however, the Commerce Clause cannot be satisfied when economic activity is lacking in the first instance.

Judge Graham then expressly embraces Justice Clarence Thomas' skepticism of standard commerce clause analysis – his antipathy towards the substantial effects test – in finding that to apply that standard to uphold the individual mandate would obliterate any principled limitation on Congress' power to regulate:

Lopez and Morrison rejected a view of causation whereby the cost-shifting to society caused by violent conduct can satisfy the substantial effects test. See Lopez, 514 U.S. at 564 (rejecting the government’s “costs of crime” and loss of “national productivity” reasoning); Morrison, 529 U.S. at 615 (same). The government fails to show why a view of cost-shifting caused by risky conduct should fare any better. The problem with the government’s line of reasoning here is that it has no logical end point, and it illustrates precisely Justice Thomas’s concerns with the substantial effects test. See Morrison, 529 U.S. at 627 (Thomas, J., concurring) (calling the test “rootless and malleable”). That test, when paired with the aggregation principle, invites manipulation and “draw[ing] the circle broadly enough to cover an activity that, when taken in isolation, would not have substantial effects on commerce.” Lopez, 514 U.S. at 600 (Thomas, J., concurring).

Judge Graham returns to the "activity/inactivity" theme when he distinguishes between regulation of an economic market and regulation of "private decisions to refrain from commerce":

The mandate and its penalty are not conditioned on the failure to pay for health care services, or, for that matter, conditioned on the consumption of health care. Congress instead choose a more coercive and intrusive regulation. The proper object of Congress’s power is interstate commerce, not private decisions to refrain from commerce.

The foregoing portions of Judge Graham's dissenting opinion tread familiar ground.  Two federal district court judges – one in Virginia and one in Florida – struck down the individual mandate on similar reasoning.  However, the latter portions of Judge Graham's opinion raise a number of troubling points.

Judge Graham argues that "a relatively trivial effect on commerce" does not justify the government's interference with "the right ["of law-abiding individuals"] to decide how to finance personal medical expenses."  Judge Graham states:

The mandate forces law-abiding individuals to purchase a product – an expensive product, no less – and thereby invades the realm of an individual’s financial planning decisions. Cf. Maryland v. Wirtz, 392 U.S. 183, 196 n.27 (1968) (“Neither here nor in Wickard had the Court declared that Congress may use a relatively trivial impact on commerce as an excuse for broad general regulation of state or private activities.”). In the absence of the mandate, individuals have the right to decide how to finance medical expenses. The mandate extinguishes that right.

There are three points that should be made in rebuttal to this argument.  First, the PPACA is not a criminal statute; instead it imposes a civil penalty for failure to purchase health insurance, and it provides substantial subsidies so that middle-class families can afford it.  Second, the effects on commerce of there being 50 million uninsured Americans are far from "trivial," as Congress determined and the other two appellate judges acknowledged.  Third, there is no constitutional right "to decide how to finance medical expenses." 

Moreover, Judge Graham utterly fails to mention that there is a strong presumption in favor of the constitutionality of economic legislation and that Congress' judgment under the Commerce Clause is to be upheld so long as there exists a "rational basis" to support it.  Instead, Judge Graham appears skeptical of Congress' exercise of power; he rejects the "fatalistic view" that "the people if offended" can resolve disputes such as this one democratically:

To the fatalistic view that Congress will always prevail and courts should step back and let the people, if offended, speak through their political representatives, I say that “courts were designed to be an intermediate body between the people and the legislature, in order, among other things, to keep the latter within the limits assigned to their authority.” The Federalist No. 78 (A. Hamilton). In this arena, the “public force” is entrusted to the courts. Oliver Wendell Holmes, The Path of the Law, 10 Harv. L. Rev. 457, 457 (1897). “[W]here the will of the legislature, declared in its statutes, stands in opposition to that of the people, declared in the Constitution, the judges ought to be governed by the latter rather than the former.” The Federalist No. 78.

Judge Graham might better have quoted Justice Holmes' dissenting opinion in Lochner v. New York (1905), where he stated that the Constitution is made "for people of fundamentally differing views," and that judges do not have the authority to strike down economic legislation with which they disagree.  As was so often the case, the Supreme Court eventually embraced Holmes' view.  Disssenting from the decision of the majority in Lochner which had struck down a law which prohibited the employment of bakers for more than 60 hours per week, Holmes wrote:

This case is decided upon an economic theory which a large part of the country does not entertain. If it were a question whether I agreed with that theory, I should desire to study it further and long before making up my mind. But I do not conceive that to be my duty, because I strongly believe that my agreement or disagreement has nothing to do with the right of a majority to embody their opinions in law. It is settled by various decisions of this court that state constitutions and state laws may regulate life in many ways which we as legislators might think as injudicious, or if you like as tyrannical, as this, and which, equally with this, interfere with the liberty to contract. Sunday laws and usury laws are ancient examples. A more modern one is the prohibition of lotteries. The liberty of the citizen to do as he likes so long as he does not interfere with the liberty of others to do the same, which has been a shibboleth for some well-known writers, is interfered with by school laws, by the Post Office, by every state or municipal institution which takes his money for purposes thought desirable, whether he likes it or not. The 14th Amendment does not enact Mr. Herbert Spencer's Social Statics. The other day we sustained the Massachusetts vaccination law. Jacobson v. Massachusetts. United States and state statutes and decisions cutting down the liberty to contract by way of combination are familiar to this court. Two years ago we upheld the prohibition of sales of stock on margins, or for future delivery, in the Constitution of California. The decision sustaining an eight-hour law for miners is still recent. Holden v. Hardy. Some of these laws embody convictions or prejudices which judges are likely to share. Some may not. But a Constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the state or of laissez faire. It is made for people of fundamentally differing views, and the accident of our finding certain opinions natural and familiar, or novel, and even shocking, ought not to conclude our judgment upon the question whether statutes embodying them conflict with the Constitution of the United States.

Judge Graham expresses frustration with the majority opinion in Gonzales v. Raich (2005), which upheld the federal Controlled Substances Act against a claim that it exceeded Congress' power to criminalize the possession of marijuana for personal, medicinal uses: 

In Lopez the Supreme Court recognized that the direction of its existing Commerce Clause jurisprudence threatened the principle of a federal government of defined and limited powers, and it began the process of developing a new jurisprudence more compatible with the Constitution. That process was interrupted by Raich, where a majority of the Court was unwilling to expressly overrule a landmark Commere Clause case in Wickard, which had been the law of the land for over sixty years.

Notwithstanding Raich, I believe the Court remains committed to the path laid down by Chief Justice Rehnquist and Justices O’Connor, Scalia, Kennedy, and Thomas to establish a framework of meaningful limitations on congressional power under the Commerce Clause. The current case is an opportunity to prove it so.

Instead, Judge Graham signalled agreement with the views that Justice Thomas and Justice O'Connor expressed in their dissenting opinions in Raich.  Justice O'Connor believed that the majority in Raich had failed to accord sufficient respect for the authority of the states to regulate the possession of addictive drugs, while Justice Thomas took the position that the "substantial effects" test defining the extent of Congress' power under the Commerce Clause should simply be overruled.   The dissenting views of Justices Thomas and O'Connor in Raich command significant scholarly and political support, and perhaps someday a majority of the Supreme Court will embrace one of those positions.  Until then, however, the Courts of Appeal are bound by existing Commerce Clause analysis including Wickard and Raich.  One of the touchstones of existing Commerce Clause analysis is proper respect for the findings and policy judgments of Congress in the area of economic legislation.  That important element is missing from Judge Graham's opinion.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790

Judge Jeffrey Sutton concurred in the judgment of the Sixth Circuit that the Patient Protection and Affordable Care Act is constitutional on its face.  However, he did not join Judge Martin's opinion upholding the law, and he left open the door to future as-applied challenges to the individual mandate.

Judge Sutton reached the conclusion that the individual mandate of the Affordable Care Act is constitutional for many of the same reasons expressed by Judge Martin, as described in the previous post.  For example, Judge Sutton expressly finds that the market that is regulated by the PPACA substantially affects interstate commerce:

No matter how you slice the relevant market—as obtaining health care, as paying for health care, as insuring for health care—all of these activities affect interstate commerce, in a substantial way.

Judge Sutton spends a considerable portion of his opinion addressing the plaintiff's argument that Congress lacks the authority to force people to purchase a product that they don't wish to have.  He thoroughly analyzes the plaintiff's contention that while Congress has the authority to regulate economic activity, it lacks the power to regulate economic inactivity.  On the one hand, Judge Sutton seems to reject both the distinction itself and it applicability to this case; on the other hand, he leaves open the door to a future "as applied" challenge to the law on this ground.

In support of the government's position, Judge Sutton found that the activity being regulated by Congress through the individual mandate is the practice of "self-insurance" – and that this activity in and of itself has a substantial effect on interstate commerce:

There are two ways to self-insure, and both, when aggregated, substantially affect interstate commerce. One option is to save money so that it is there when the need for health care arises. The other is to save nothing and to rely on something else—good fortune or the good graces of others—when the need arises. Congress found that providing uncompensated medical care to the uninsured cost $43 billion in 2008 and that these costs were shifted to others through higher premiums. See 42 U.S.C. § 18091(a)(2)(F). Based on these findings, Congress could reasonably conclude that the decisions and actions of the self-insured substantially affect interstate commerce.

In choosing how to regulate this group, Congress also did not exceed its power. The basic policy idea, for better or worse (and courts must assume better), is to compel individuals with the requisite income to pay now rather than later for health care. Faced with $43 billion in uncompensated care, Congress reasonably could require all covered individuals to pay for health care now so that money would be available later to pay for all care as the need arises. Call this mandate what you will—an affront to individual autonomy or an imperative of national health care—it meets the requirement of regulating activities that substantially affect interstate commerce.

Judge Sutton expresses a number of reasons for rejecting the "activity/inactivity" dichotomy altogether:

Does the Commerce Clause contain an action/inaction dichotomy that limits congressional power? No—for several reasons.

First, the relevant text of the Constitution does not contain such a limitation. …

Second, the promise offered by the action/inaction dichotomy—of establishing a principled and categorical limit on the commerce power—seems unlikely to deliver in practice. …  Does this test apply to individuals who have purchased medical insurance before? Those individuals have not been inactive in any sense of the word when it comes to the medical-insurance market, yet plaintiffs say that Congress may not regulate them.  …

He also argues that self-insuring for health care is not "inactivity":

The mandate is one way of ensuring that all Americans have money to pay for health care when they inevitably need it. In this context, the notion that self-insuring amounts to inaction and buying insurance amounts to action is not self-evident. If done responsibly, the former requires more action (affirmatively saving money on a regular basis and managing the assets over time) than the latter (writing a check once or twice a year or never writing one at all if the employer withholds the premiums).  …

No one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk.

Judge Sutton also acknowledges the intuition, common to most Americans, that it is just wrong for the government to require people to purchase a product that they don't want.  The problem, as Judge Sutton recognizes, is that a constitutional principle such as this protecting individual liberty would seem to be more at home under the Due Process Clause rather than the Commerce Clause – but no-one is suggesting that the court should revive the doctrine of "economic substantive due process" that reigned from 1887 to 1937 and that was used by the Supreme Court to invalidate a host of laws protecting workers, including minimum wage and maximum hour laws, collective bargaining laws, and child labor laws.  Judge Sutton stated:

Why construe the Constitution, moreover, to place this limitation—that citizens cannot be forced to buy insurance, vegetables, cars and so on—solely in a grant of power to Congress, as opposed to due process limitations on power with respect to all American legislative bodies? Few doubt that the States may require individuals to buy medical insurance, and indeed at least two of them have. See Mass. Gen. Laws 111M § 2; N.J. Stat. Ann. § 26:15-2. The same goes for a related and familiar mandate of the States—that most adults must purchase car insurance. Yet no court has invalidated these kinds of mandates under the Due Process Clause or any other liberty-based guarantee of the Constitution.

All that Judge Sutton says in his opinion up to this point seems consistent with Judge Martin's opinion declaring the law to be constitutional.  However, Judge Sutton leaves open the door a crack to a plaintiff in the future who might challenge the law as applied, rather than on its face.  Judge Sutton states that the plaintiffs' facial challenge must fail because the individual mandate is constitutional as applied to four categories of persons:

For now, whatever else may be said about plaintiffs’ activity/inactivity theory of commerce power, they have not shown that the individual mandate exceeds that power in all of its applications. Congress may apply the mandate in at least four settings: (1) to individuals who already have purchased insurance voluntarily and who want to maintain coverage, but who will be required to obtain more insurance in order to comply with the minimum-essential-coverage requirement; (2) to individuals who voluntarily obtained coverage but do not wish to be forced (at some indeterminate point in the future) to maintain it; (3) to individuals who live in States that already require them to obtain insurance and who may have to obtain more coverage to comply with the mandate or abide by other requirements of the Affordable Care Act; and (4) to individuals under 30, no matter where they live and no matter whether they have purchased health care before, who may satisfy the law by obtaining only catastrophic-care coverage. The valid application of the law to these groups of people suffices to uphold the law against this facial challenge.

I do not find Judge Sutton's final reservation allowing for a possible future as-applied challenge to be persuasive.  The remainder of his opinion argues persuasively that "self-insurance" is activity that, in the aggregate, substantially affects interstate commerce, and that neither the Commerce Clause nor any other provision of the Constitution contains an "individual liberty" exception to economic legislation.  He expressly acknowledges that under the Commerce Clause Congress has both the power to "prescribe" as well as the power to "proscribe."  In substance this is a concurring opinion, not simply an opinion concurring in the judgment as it is styled.  It is a thoughtful and persuasive refutation of the "inactivity" argument invoked by the opponents of this law, and it will be carefully consulted by other appellate judges as well as the justices of the Supreme Court.

In the next post I will analyze Judge Graham's dissenting opinion that would declare the individual mandate unconstitutional.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790

Yesterday's post announced the decision of the Sixth Circuit in Obama v. Thomas More Law Center.  Judge Boyce Martin's opinion upholding the law tracks the federal government's legal arguments in support of the constitutionality of the Patient Protection and Affordable Care Act.

Judge Martin's opinion contains three principal propositions:

1.  As economic legislation, the PPACA enjoys a strong presumption of constitutionality.   The courts do not exercise independent judgment regarding the policy judgments justifying such a law.  The judgment of Congress must be upheld so long as there is a "rational basis" supporting it.

2.  Congress had a rational basis for believing that the PPACA (including the individual mandate) regulates conduct that, in the aggregate, has a substantial effect on interstate commerce.  Accordingly, Congress has the authority to enact the individual mandate under the Commerce Clause.

3.  The individual mandate of the PPACA is essential to the accomplishment of the goals of the statute as a whole in regulating health insurance in the nation as a whole.  Accordingly, the individual mandate is also constitutional under the Necessary and Proper Clause.

Below I quote passages from Judge Martin's opinion on all three points.

1.  Presumption of Constitutionality

The minimum coverage provision, like all congressional enactments, is entitled to a “presumption of constitutionality,” and will be invalidated only upon a “plain showing that Congress has exceeded its constitutional bounds.” United States v. Morrison, 529 U.S. 598, 607 (2000). The presumption that the minimum coverage provision is valid is “not a mere polite gesture. It is a deference due to deliberate judgment by constitutional majorities of the two Houses of Congress that an Act is within their delegated power . . . .” United States v. Five Gambling Devices, 346 U.S. 441, 449 (1953).

2.  Constitutionality Under the Commerce Clause

The Act considered as a whole makes clear that Congress was concerned that individuals maintain minimum coverage not as an end in itself, but because of the economic implications on the broader health care market. Virtually everyone participates in the market for health care delivery, and they finance these services by either purchasing an insurance policy or by self-insuring. Through the practice of self-insuring, individuals make an assessment of their own risk and to what extent they must set aside funds or arrange their affairs to compensate for probable future health care needs.  Thus, set against the Act’s broader statutory scheme, the minimum coverage provision reveals itself as a regulation on the activity of participating in the national market for health care delivery, and specifically the activity of self-insuring for the cost of these services.

The minimum coverage provision regulates activity that is decidedly economic. … By requiring individuals to maintain a certain level of coverage, the minimum coverage provision regulates the financing of health care services, and specifically the practice of self-insuring for the cost of care. The activity of foregoing health insurance and attempting to cover the cost of health care needs by self-insuring is no less economic than the activity of purchasing an insurance plan.

Furthermore, Congress had a rational basis to believe that the practice of self-insuring for the cost of health care, in the aggregate, substantially affects interstate commerce. An estimated 18.8% of the non-elderly United States population (about 50 million people) had no form of health insurance for 2009. U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2009, at 23, table 8 (2010). Virtually everyone requires health care services at some point, and unlike nearly all other industries, the health care market is governed by federal and state laws requiring institutions to provide services regardless of a patient’s ability to pay. The uninsured cannot avoid the need for health care, and they consume over $100 billion in health care services annually.

Self-insuring for the cost of health care directly affects the interstate market for health care delivery and health insurance. These effects are not at all attenuated as were the links between the regulated activities and interstate commerce in Lopez and Morrison.

3.  Constitutionality Under the Necessary and Proper Clause

Alternatively, even if self-insuring for the cost of health care were not economic activity with a substantial effect on interstate commerce, Congress could still properly regulate the practice because the failure to do so would undercut its regulation of the larger interstate markets in health care delivery and health insurance.

As plaintiffs concede, Congress has the power under the Commerce Clause to regulate the interstate markets in health care delivery and health insurance.

Under the process of “medical underwriting,” insurance companies review each applicant’s medical history and health status to determine eligibility and premium levels. As a result of this practice, approximately thirty-six percent of applicants in the market for individual health insurance are denied coverage, charged a substantially higher premium, or offered only limited coverage that excludes pre-existing conditions. Department of Health and Human Services, Coverage Denied: How the Current Health Insurance System Leaves Millions Behind, at 1 (2009). The Act bans this practice through a guaranteed issue requirement, which bars insurance companies from denying coverage to individuals with pre-existing conditions; and a community rating requirement, which prohibits insurance companies from charging higher rates to individuals based on their medical history. 42 U.S.C. §§ 300gg, 300gg-1(a), 300gg-3(a). No one denies that Congress properly enacted these reforms as part of its power to regulate the interstate markets in health care delivery and health insurance. 

Congress rationally found that the minimum coverage provision “is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.”  42 U.S.C. § 18091(a)(2)(I). Congress had a rational basis for concluding that the minimum coverage requirement is essential to its broader reforms to the national markets in health care delivery and health insurance. Therefore, the minimum coverage provision is a valid exercise of the Commerce Clause power.

Judge Martin's opinion represents a standard application of principles of constitutional law and congressional authority as they have been understood and applied in cases such as NLRB v. Jones & Laughlin Steel (1937) (upholding National Labor Relations Act); West Coast Hotel v. Parrish (1937) (upholding state minimum wage law); Helvering v. Davis (1937) (upholding Social Security Act); United States v. Darby (1941) (upholding federal minimum wage law); Wickard v. Filburn (1942) (upholding federal law setting maximum allotments for farmers growing wheat); Heart of Atlanta Motel v. United States (1964) (upholding 1964 Civil Rights Act);  Katzenbach v. McClung (1964) (same); Perez v. United States (1971) (upholding federal law prohibiting loansharking); and Gonzales v. Raich (2005) (upholding provision of Controlled Substances Act as applied to marijuana grown for personal medicinal use).   Judge Martin's opinion is squarely in the tradition of those cases.

In the next post I will discuss Judge Sutton's separate concurring opinion from this case.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790

By a vote of 2-1 the Sixth Circuit has upheld the Patient Protection and Affordable Care Act.

A three judge panel of the United States Court of Appeals for the Sixth Circuit has rendered its decision in Obama v. Thomas More Law Center.  On the central question presented by the case – the constitutionality of the Affordable Care Act under the Commerce Clause – each of the judges wrote separate opinions.  Two of the judges – Judge Boyce F. Martin, and Judge Jeffrey S. Sutton, ruled in favor of the law.  Judge Martin simply found that Congress has the authority under the Constitution to enact this law.  Judge Sutton found that while the Act is constitutional on its face, in future cases it might be found unconstitutional as applied to certain individuals.  Judge James Graham, a district court judge sitting by assignment, dissented and would have found the law unconstitutional in all of its applications.

I will post a more detailed report this evening.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790

The Eleventh Circuit will hear oral argument in Florida v. United States Department of Health and Human Services this morning to consider the constitutionality of the Affordable Care Act.

Matthew Bigg of Reuters posted this article about today's hearing before the Eleventh Circuit Court of Appeals.  He reports that the case will be heard by Chief Judge Joel Dubina, Judge Frank Hull and Judge Stanley Marcus.  Bigg states:

Analysts will watch their questions closely for clues as to how they might rule. 

The Circuit Court posted this notice of the proceeding.  Among other information, the Court states that an audio recording of the argument will not be posted online, but may be ordered from the Court.

This is one of four cases that will be heard by the Circuit Courts of Appeal before the Supreme Court takes up this case later this year.  This case is particularly significant for two reasons.  First, more than 20 states have joined this case opposing the federal law; one of the questions that the Supreme Court will have to decide is whether the states have standing to challenge the law.  While the individual mandate clearly affects the legal rights of individuals, and while it involves substantial questions of federalism, it is not clear that the law directly infringes upon the legal rights of the states. 

Second, the Florida district court that heard this case struck down not just the individual mandate but the Affordable Care Act in its entirety.  In other words, the district court overturned the judgment of Congress regarding a law that effects a dramatic change in how health care is distributed and paid for, affecting the availability of health care to tens of millions of Americans.  No comparable federal law been declared unconstitutional since 1937 when the Supreme Court established a policy of deferring to Congress' judgment about the necessity for economic legislation.

The Sixth Circuit heard oral argument in Thomas More Law Center v. Obama yesterday on the constitutionality of the Patient Protection and Affordable Care Act. 

Attorney Robert Muise argued on behalf of the Thomas More Law Center  and Solicitor General Neal Katyal argued on behalf of the federal government.  The three-judge panel included Circuit Judges Boyce F. Martin, Jr., and Jeffrey S. Sutton, and United States District Judge James L. Graham, sitting by designation.  The audio recording of the argument is available here.

Both attorneys were brilliant.  They cogently articulated the issues; demonstrated mastery of the facts, briefs, and previous cases; responded forthrightly and even wittily to the judges' questions; and persuasively expressed the underlying constitutional values that are at stake.  It was a forensic masterpiece.

According to Philip Klein of Beltway Confidential, Ilya Shapiro of the Cato Institute (whom I had the honor and pleasure of debating on this question) attended the oral argument and is reportedly "cautiously optimistic" that the appellate court will reverse the decision of the District Court and strike down the federal statute.  I disagree.  Although the two Republican judges on the panel asked Solicitor General Katyal a number of tough questions and expressed skepticism about this law, Katyal not only parried their queries – he met them head on. 

There were several key points that arose during oral argument that militate in favor of the constitutionality of the Act:

1.  The opponents of the Act assert that Congress lacks the power to force people to purchase a product or service, and yet they do not invoke any provision in the Bill of Rights to support that assertion.  Instead they contend that such a limitation is inherent in the Commerce Clause.  Essentially, they are attempting to engraft a "personal freedom" limitation onto the Commerce Clause.  It will be difficult to persuade the courts to do that in the absence of any evidence that there is a constitutional right at stake.

2.  Everybody is in the market for health care.  If someone has a heart attack, he will be taken to an emergency room and the hospital will have to treat him whether he can pay for it or not.  This law is not "forcing" people into the market for health care.  It is simply regulating how people pay for health care.  This fact was illustrated by the fact that the lead individual plaintiff in this case – who had earlier claimed that she would refuse to purchase health insurance – had in fact purchased health insurance for her child, thus throwing into question whether the suit would have to be dismissed for lack of standing.  Her decision to purchase health insurance drives home the point that no-one is outside the market for health care.

3.  Congress has made specific findings that people's failure to have health insurance is economic behavior; and the fact that 50 million people are uninsured is having not just a substantial but a catastrophic effect on the health care market.  This fact was not controverted by the plaintiff nor was it challenged by the court.  The courts must defer to Congress' findings; so long as Congress has a rational basis for believing that the unavailability of affordable health insurance is affecting interstate commerce, and that the individual mandate is essential to the remainder of the Act, the Courts must accept those facts as true.

4.  The government contends that even if the conduct being regulated is not "economic activity" that can be regulated under the Commerce Clause, that Congress has the power to enact the individual mandate under the Necessary and Proper Clause.  The plaintiff did not dispute the fact that the individual mandate is essential to make the rest of the law work – specifically, that by expanding the pool of insured people that the cost of health insurance would be reduced, and that the government could not force the insurance companies to cover preexisting conditions unless everybody is required to purchase health insurance.  The "necessity" for this provision remains unchallenged.

5.  The plaintiff's  "broccoli" argument was brought up: "If the government can make people purchase health insurance for their own good, then it can also make them eat broccoli."  The argument is a "slippery slope" or "parade of horribles"  and it derives part of its strength from the fact that so many people don't like broccoli!  General Katyal distinguished broccoli from health insurance, noting that when people show up at the grocery store and demand free broccoli the store does not have to give it to them, but when people show up at the hospital in critical condition the hospital has to treat them in accordance with EMTALA and federal regulations.  The "anti-dumping" laws have been held to be constitutional; under the Commerce Clause Congress has the power to require hospitals to treat people whom they would choose not to.  It is accordingly constitutional, Katyal argued, to require people to purchase health insurance.  The plaintiffs responded that this is bootstrapping argument – that the federal government "created the problem" by enacting the anti-dumping laws in the first place.

6.  Finally, Katyal noted that it is not strictly accurate to say that the law will "force" people to purchase health insurance.  The individual mandate is not a criminal law.  Instead, the penalty is a tax on income.  People may choose not to purchase health insurance so long as they are willing to pay a penalty of 2.5% of income up to a maximum of $675, and if their income is below a threshold level they are not subject to the penalty.

It was a great argument.  We will await the decision of the Sixth Circuit, as well as the results from three other federal Courts of Appeal: the Fourth Circuit (where oral arguments were already held), the Eleventh Circuit, and the D.C. Circuit.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790

Medicare is not sustainable, due to spiraling health care costs. Republicans successfully bashed Democrats last fall over the cost control measures in the Affordable Care Act (or "Obamacare," if you prefer); Democrats are successfully bashing Republicans right now over the voucher approach in the Ryan budget proposal. Neither is particularly responsible, in my view, nor unexpected. I defer to Professor Huhn on the details of these approaches. But today I saw something that helped me think about the problem. It was this entry in Ezra Klein's column. It turns out that we're spending $3 billion a year on a common and popular surgical procedure that provides no benefit over a placebo. Should Medicare pay for it? Should your insurance company? If not, would that be rationing?

Democrats tend to prefer regulatory solutions–thus ACA includes a panel of experts to assess the efficiency of various medical treatments and make recommendations. If you fear regulation, you suspect that this panel will eventually abuse its power, leading to rationing.

Republicans tend to prefer market solutions–thus the Ryan plan vouchers would turn Medicare patients into consumers of insurance who would bear more of their own costs and therefore would monitor the effectiveness of procedures themselves, or else be wasting their own money.

Of course, market forces are what we have now, in the non-Medicare sector, and they don't seem to be working, for a variety of reasons. Instead, costs (and therefore premiums) continue to rise, leading to more and more consumers going uninsured. This is a different kind of rationing, but it is rationing nonetheless.

I'm not dogmatic on these issues, although I am probably more skeptical of the magic of markets than many. I just wish we could be having a discussion rather than a holy war.

The Conference Board of Canada has released a report criticizing its country's overreliance on government health care.

According to an editorial in the National Post entitled Canada must abandon its health-care monopoly, the nonpartisan Conference Board of Canada is proposing that to improve quality and reduce costs Canada should increase the involvement of the private sector in providing health care.  The Post states:

The non-partisan Conference Board of Canada has released a new study enumerating the weaknesses in Canada’s public health-care system. In short, the report says that while Canada spends a lot on public health care, our health outcomes are middling compared to other developed nations. Many countries — such as Australia and Sweden — spend less but with better results.

Anne Golden and David Stewart-Patterson, President and Vice-President of the Conference Board, published an editorial in the Toronto Star in which they said:

What this means is that we must change the way we think about health care in Canada. If we continue to treat health care solely as an essential public service, as a sacred entitlement of Canadian citizenship, we are doomed to perpetuate the trend toward higher costs, higher taxes, longer lineups and wait times and growing frustration.

We need to move instead toward health care based on empowerment, recognizing that this must go hand in hand with greater responsibility. This is true for each of us as a consumer of health care. It is equally true for the businesses, health-care institutions and governments that must now embrace the complexity of Canada’s health-care challenge and get down to the tough job of finding ways to make the public system work better for everyone.

The report of the Conference Board – Hot Topic: Health Spending: Do countries get what they pay for when it comes to health care? – does not recommend that Canada should model its health care system after that of the United States.  It finds plenty to criticize about the state of health care among their boisterous southern neighbors.  Rather it proposes that Canada should emulate Australia and several western European nations such as Germany and Sweden in having a better mix of public and private health care providers.  The Conference Board concludes that Canada needs to begin relying more on private health care providers to stimulate competition, thus leading both to improved quality and lower costs.

In a later post I will summarize what the report has to say about the United States' health care system.

Mitt Romney, a leading candidate for the Republican presidential nomination, delivered a major address on health care yesterday.  This post contains links to reactions to his speech from both left and right.

Everybody seems to agree that the health care reform law requiring universal coverage adopted in Massachusetts under former Governor Romney's leadership is essentially similar – practically identical – to the federal statute signed into law by President Obama in March, 2010.  Left-wing critics accuse Romney of "running away" from the individual mandate that is the heart of both laws; right-wing critics attack him for failing to repudiate that idea.  Here are the links:

Wall Street Journal: Obama's Running Mate: Mitt Romney's ObamaCare problem

Avik Roy, National Review Online: Mitt Romney's Illogical, Terrible Health Care Address

Michael F. Cannon, Cato Institute: Mandate’ Mitt’s Candidacy May Be the Biggest Obstacle to Repealing ObamaCare

Sarah Kliff, Politico: Mitt Romney's law, Affordable Care Act very similar

Matt Negrin, Politico: Tomato, Tomahto: White House: Romney "Running" from Law

Jon Ward, Huffington Post: Mitt Romney Rejects Demands To Apologize For Health Care Plan

Benjy Sarlin, Talking Points Memo: Mitt Romney: I Will Never Impose My Awesome Massachusetts Law On The Nation

But the picture for Mitt Romney may not be as bleak as it seems.  First, remember that the health insurance companies themselves are in large part responsible for the structure of the federal legislation.  The trade association for the health insurance companies, AHIP (America's Health Insurance Plans) made the individual mandate its primary legislative objective.  That is why it did not oppose the health care reform effort last year as it did in 1994 when Bill and Hillary Clinton proposed a plan for universal coverage.  In its December, 2008, report entitled Now is the Time for Health Care Reform: A Proposal to Achieve Universal Coverage, Affordability, Quality Improvement and Market Reform, the AHIP Board of Directors stated:

Combine guarantee-issue coverage with no pre-existing condition exclusions with an enforceable individual mandate: For guarantee-issue to work, it is necessary for everyone to be brought into the system and participate in obtaining coverage. Achieving this objective will require specific attention to the mechanisms for making the mandate enforceable and may require coordinated action at multiple levels of government.  Indeed, the importance of combining guarantee issue with an enforceable individual mandate is borne out by research and experience from the states. For example, a report by Milliman, Inc. found that states that enacted guarantee-issue laws in the absence of an individual coverage requirement saw a rise in insurance premiums, a reduction of individual insurance enrollment, and no significant decrease in the number of uninsured.

Second, in his essay A lot of Republicans supported the individual mandate Ezra Klein of the Washington Post describes how the individual mandate originated in Republican circles and enjoyed substantial support among leaders such as Bob Dole, George Bush, Chuck Grassley, and Orrin Hatch.  Sam Stein of the Huffington Post reports in his article Newt Gingrich Was More Supportive Of Individual Mandates Than Mitt Romney that Gingrich has repeatedly championed the individual mandate.  Stein quotes Gingrich from numerous books and speeches between 2005 and 2008 including one occasion where Gingrich said that it was "fundamentally immoral" for someone without health insurance to request medical care.

Third, take a look at the U.S. Chamber of Commerce health care website, health care blog, and latest advertisement on health care.  There are plenty of objections to the employer mandate and associated regulations, but not one word criticizing the individual mandate.

In short, employers, health insurance companies, and plenty of Republican leaders quietly support the idea of requiring all Americans to maintain health insurance.  While it has yet to be determined whether the individual mandate is constitutional, it is difficult to imagine a Republican candidate making repeal of the individual mandate the centerpiece of a presidential campaign.  If it appeared that repeal was likely or imminent, AHIP, large employers, the Chamber of Commerce, and their political allies would intervene to keep the present law in place.  If this group coalesces around Mitt Romney on this issue – don't count him out.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790

Oral argument was held yesterday before the Fourth Circuit Court of Appeals in two cases involving the constitutionality of the Patient Protection and Affordable Care Act.  You may listen to a recording of the oral argument here.

In late 2010 two federal district courts in Virginia ruled on the constitutionality of the Patient Protection and Affordable Care Act.  The law is  popularly known as "ObamaCare," although the central structure of the law grew out of proposals originally made by Bob Dole and the Heritage Foundation and adopted in Massachusetts under the leadership of Governor Mitt Romney.  Instead of adopting a "single payer" model of funding health care similar to Medicare, Congress opted for a "play or pay" model relying on private health insurance companies to act as gatekeepers to health care.  Insurers will negotiate rates with providers and control access by overseeing utilization.  The law requires individuals and employers to maintain health insurance, with the government subsidizing its purchase through refundable tax credits to small employers and low and moderate income families.

The substantive issue in the two cases was the same – does Congress have the power under the Commerce Clause or the Necessary and Proper Clause to enact the "individual mandate" of the PPACA?  In Liberty University, Inc. v. Geithner the District Court for the Western District of Virginia ruled that the law was constitutional.  In Virginia v. Sebelius the District Court for the Eastern District of Virginia ruled that the "individual mandate" was unconstitutional.   But there is an important difference between the two cases on the issue of standing.

Standing

In the first case, Liberty University v. Geithner, the plaintiffs challenging the individual mandate are individuals – persons who do not wish to purchase health insurance but who prefer to pay for health care out-of-pocket.  In the second case, the plaintiff challenging the individual mandate is the State of Virginia.  The Virginia legislature had adopted a statute providing that individuals do not have to comply with the federal law, and the state attorney general contends that this law gives the State standing to challenge the constitutionality of the federal law.  There is little doubt that individuals have standing to challenge the "individual mandate."  But there is substantial doubt that the State has standing.  In previous cases where the states have challenged the constitutionality of federal laws it involved situations where the state was directly affected by federal action or inaction.  For example, in New York v. United States, the federal law forced the states to "take title" to nuclear waste generated within their borders, and South Dakota v. Dole the federal law withheld highway funding from states that refused to raise the drinking age to 21.  The  furthest extent of "state standing" is probably in the case of Massachusetts v. Environmental Protection Agency, in which the State of Massachusetts was permitted to challenge the refusal of the EPA to address the problem of emissions of greenhouse gases, thus contributing to the effects of global warming such as rising sea levels .  Even in that case, standing was predicated on the fact that the State of Massachusetts owns a substantial amount of shoreline property that was being affected by the agency's inaction – the federal government was injuring the state in a very concrete way.  In contrast, in this case, the State of Virginia and other states that have enacted laws purporting to "nullify" the individual mandate cannot point to any direct harm that the individual mandate might cause to the State itself - and therefore Virginia v. Sebelius may be dismissed for lack of standing.  The other case, however, will go forward and the Fourth Circuit will have to rule on the merits of the claim that Congress lacks power to enact the individual mandate.

Congress' Power under the Commerce Clause and the Necessary and Proper Clause

The district courts came to different conclusions about the central issue before the court – whether Congress has the power under the Commerce Clause to require individuals to purchase health insurance.  I have addressed the arguments of both sides of this debate in several previous posts, including Health Care Financing Reform (125): An Inherent Contradiction in the Florida District Court Decision, and Health Care Financing Reform (119): Virginia Federal Court Strikes Down Individual Mandate in Health Care Reform Act. 

Two jounalists have recorded their perceptions of yesterday's oral argument.  Kevin Sack of the New York Times, in Appellate Court Hears Defense of Health Law, notes that the judges "challenged both sides with pointed questioning."  Andrew Cohen at The Atlantic, in Why You Should Listen to the Affordable Care Act Appeal, thought that the appellate panel clearly signaled the probable outcome of the case:

How one-sided did the hours of argument seem to wizened observers? Thomas Goldstein, the powerhouse Washington lawyer who argues frequently before the United States Supreme Court and who oversees the prominent website Scotusblog, declared shortly after oral argument that he was "100%" certain the panel would uphold the Care Act. Before high noon Tuesday, Goldstein already had moved on to the question of whether Virginia's aggressive attorney general would ask the entire 4th Circuit to hear the case (the smart move) or try to get the Supreme Court involved directly (the likely one).

Lyle Denniston of SCOTUSBlog posted Easy Outing for Health Care Law? in which he, too, observes that the judges were "notably less skeptical" of the federal government's arguments than they were of the challengers'.  Denniston states:

One thing about the fate of the new health care law emerged vividly in its first challenge Tuesday in a federal appeals court: the challengers cannot defeat the law in court unless they sharpen their argument that Congress has set out in a revolutionary new direction to control Americans’ personal lives. They have built their challenge almost entirely on the premise that Congress can regulate “activity,” but cannot regulate “inactivity.” But that attempted distinction, so clear in the eye of the challengers, seemed fundamentally baffling — and thus probably unconvincing — to the three judges who heard just over two hours of argument in the Fourth Circuit Court in Richmond.

What is amazing to me is that the persons challenging the law are still focusing on whether the failure to purchase health insurance constitutes "activity" or "inactivity."  This is a purely semantic argument.  Those words are not in the Constitution, and they do not represent any fundamental constitutional value.  The government requires us to engage in all sorts of conduct including purchasing insurance for various purposes.  The distinction between "activity" and "inactivity" within individual behavior has never made a difference for constitutional purposes.  Meanwhile, the opponents of the law continue to ignore the one argument that might convince the courts to strike down the PPACA – that this law infringes upon the power of the states.  In the last 70 years that is the only argument that has worked.  On four occasions in recent decades (five, if you count one case that was later overrruled) the Supreme Court has found that Congress overstepped its bounds and infringed upon the reserved powers of the states by enacting laws pursuant to the Commmerce Clause.  And yet the plaintiffs in these cases prefer to make a formalist argument that has little intellectual appeal and even less emotional resonance.  State sovereignty is an important constitutional value that must be taken into account.  The difference between "activity" and "inactivity" is not.

In addition to the Fourth Circuit this matter will also be heard by appellate courts in the Sixth Circuit, the Eleventh Circuit, and the D.C. Circuit.  From one or more of those decisions an appeal will be taken and the case will ultimately be reviewed by the Supreme Court.

Professor Huhn has taught Constitutional Law at the University of Akron for over a quarter century. You may access his websites on Constitutional Law and Health Care Financing Reform for additional materials and information about those subjects. Drafts of his scholarly work are available from his author page at ssrn: http://ssrn.com/author=83790