The predictable result of Democrats finalizing The Patient Protection and Affordable Health Care Act is that states’ attorneys general filed suit to get it thrown out. Typically, Democrats predict these suits will go nowhere, but unfortunately this belief is colored by rosy glasses and not tempered by the actual facts—and denies the threat posed to what Democrats have so patiently pursued all these years.
The primary thrust is to target the individual mandates, which are a significant weak point, and by knocking them out, opponents probably believe they can topple the whole edifice. That’s unlikely. Most of the act applies to what we might think of as standard regulation, the garden-variety stuff we’ve seen for years. But, the mandates themselves are probably unconstitutional, and the courts are likely to strip them out.
Congress could significantly weaken the possible impact of these suits by getting rid of the mandates now. Reconciliation represents a very narrow window of opportunity to do this. But, with Democrats in denial over the risks, it is unlikely they will act in time. And that could delay reform.
Are Democrats ignoring a real danger because they don’t want to hear bad news? Are they so euphoric about passing this legislation that they discount any real danger from these lawsuits? It’s easy to deny that any of these suits will succeed if you don’t look at them coldly based on the facts.
And, it’s clear that Democrats don’t believe there’s any danger. Here’s Donna Edwards (D-Rep, Maryland) on Hardball (23 March 2010), when Chris Matthews asks her (“you’re an attorney, you know the law, …you swore an oath to it like everyone else in Congress”) if the act is constitutional:
Matthews: Explain why you believe that it’s, under the Constitution, acceptable for Congress to say you must buy insurance if you can afford it.
Edwards: Well, not just that, but I brought my Constitution [holding up a book]! All of us know from second year in law school that the interstate commerce clause gives Congress broad authority to regulate in these matters….
Actually, you don’t need to hear anything more about what she said, since she’s already off in the weeds. The mandates don’t have anything to do with the Commerce Clause.
It isn’t just elected Democrats that believe these suits won’t go anywhere. Here’s Rachel Maddow speaking with Gov. Ed Rendell (D-PA), after he dismisses the suits as just for show:
Maddow: I wonder what you think about the specific thing you’ve identified there, which is the futility of this. Nobody really, I think, seriously thinks that any of these lawsuits, either the one in Virginia or the one that your attorney general in Pennsylvania has joined, nobody thinks these suits are really going to go anywhere—it seems like a pretty open-and-shut constitutional case. They do seem like they’re just for show.
Let’s examine this “open-and-shut” constitutional case. There are four hurdles that this legislation must clear in order to survive a stiff challenge in the courts:
(A) Does the Constitution grant Congress the authority to legislate it?
(B) Is there sufficient basis for it to overcome the inherent right to privacy that citizens enjoy, which would limit this authority?
(C) Since it’s implemented as a tax, does it conform [to] the constitutional requirements for how that tax should be levied?
(D) Does it interfere with the rights of states to regulate the healthcare market?
Most of the act is strictly analogous to things the federal government already does. For example, prohibiting rescissions is regulation of insurance companies. Regulating companies (especially large companies that clearly work across state lines), is established law and will never be thrown out by the courts. Most of the act consists of regulations of the healthcare sector and things like excise taxes for medical equipment—all of which is standard fare.
But what about the individual mandates? Can they withstand a constitutional challenge? Doubtful.
First, where does Congress get the authority to direct citizens to buy from private companies? As you can see, many even in Congress think that this comes from the powers of the Commerce Clause. (Rep. Anna Eshoo, D-CA, also referenced the Commerce Clause when this came up at a town hall meeting last summer.) This simply isn’t true. The Commerce Clause applies to commerce. It applies to those participating in the market. You have to be part of the market for the Commerce Clause to apply.
Why are people, even lawyers, confused on this point? I think it’s because most challenges to regulatory authority come from the premise that the activity isn’t interstate (or international). But this isn’t the question here because the activity isn’t even a market activity.
The mandate is there to force people that are not part of the market to take part in it. Since they are not part of the market, they are not conducting commerce. If they were a part of the market (that is, trying to buy insurance), then they wouldn’t need a mandate because they’d already be doing what the act purports to try to make them do.
Are there other parts of the Constitution that could compel someone to buy insurance? Here’s the full list of powers granted to Congress (Article I, Section 8):
Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
Clause 2: To borrow Money on the credit of the United States;
Clause 3: To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
Clause 4: To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
Clause 5: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
Clause 6: To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
Clause 7: To establish Post Offices and post Roads;
Clause 8: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
Clause 9: To constitute Tribunals inferior to the supreme Court;
Clause 10: To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;
Clause 11: To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
Clause 12: To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
Clause 13: To provide and maintain a Navy;
Clause 14: To make Rules for the Government and Regulation of the land and naval Forces;
Clause 15: To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
Clause 16: To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
Clause 17: To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And
Clause 18: To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
As you can see, mandating that someone buy something is not part of this list.
I’ve also heard the argument that, of course, Congress can do this because it “provides for the general welfare”. Let me redirect your attention to Clause 1:
Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
What this says is that Congress can collect taxes (duties, imposts and excises). What is does not say is that Congress can do anything it wants to promote the general welfare. If Congress were taxing you so the federal government could provide you with healthcare coverage, that would indeed by perfectly constitutional. That’s entirely different from forcing you to get coverage from a third party. It would be, in fact, a good idea for the federal government to collect taxes and use them to pay for essential healthcare services. It should collect this through the income tax and pay for all essential healthcare. This would eliminate the need for private insurance and be a much cheaper, fairer way to provide healthcare. But that’s not what’s on offer here. What’s on offer is making you buy it from a private entity.
No, no! It’s in the preamble:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
I’m afraid not. This is the goal of the government, not the means. For the purposes of promoting the general welfare and forming a more perfect union, the government is given certain, limited powers. The rights of the people are unlimited (and inherent); the powers of the government are limited and carefully defined. This is why the government can’t do just anything it pleases with you without “due process of law”.
I’ve also heard people suggest that the mandates will be legal because the government has stretched its constitutional authority in other ways. This is probably the most disturbing attempt to justify the mandates. It suggests that if the government does something illegal, then it’s okay because it’s done other things that are illegal.
It’s unfortunately true that the government has stretched the Constitution in many ways to “solve problems”. One notorious example is the so-called “war on drugs”, which has led the government to do such things as allow local governments to bypass due process and seize assets without any actual judgment against the person whose assets were seized. As far as I can tell, this is unconstitutional. And yet, it goes on while the public puts up with it. Can these illegal activities be used to justify another unconstitutional power of the federal government?
I would not want to be the person arguing that case for the Justice Department. What if you lose? That would roll back not just the mandates, but whatever precedent you chose to use.
So, it’s unlikely that the mandates will pass the first hurdle, “Does Congress have the authority?” Just based on the facts, the answer is “no”. Of course, the courts are fickle and they could stretch the Constitution once again. (Especially if corporations might benefit from it.) But I just wouldn’t depend on that happening. This is about as clear a case as you can get. You go looking for a power to create a mandate and it simply isn’t there. Next case.
Even if the mandates pass the first test, the question immediately arises whether they conflict with another aspect, which is the right to privacy. You will remember from Roe v. Wade that there’s no explicit right to privacy in the Constitution, but the courts have found that privacy is a protected right. From my point of view, this is entirely correct because all people have rights and the Ninth Amendment specifically protects such rights.
To see why privacy is a right, I think it helps to think about what it means if people don’t have a right to privacy. If you claim that you don’t have a right to privacy, then you have no protection from me. I can invade your privacy at will. Go ahead. Claim that you don’t have a right to privacy. Not game? Like your privacy? Don’t want me looking through your personal belongings whenever I feel like it? Well, I’m wagering that you believe you have a right to privacy. It’s just a practical matter that everyone believes they have a right to privacy. (Those that don’t don’t count because I can tell them what to believe.) Since you have a right to privacy, the Ninth Amendment protects it:
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
In other words, we didn’t enumerate all your rights. If you have a right, it’s still protected. The government can’t take it away just because we didn’t list it. We were expecting that the courts would protect all your legitimate rights from intrusion by the government, even though it isn’t specifically listed. Everyone has a right to privacy, and the courts legitimately protect that right.
Does the proposed mandate conflict with your right to privacy? Yes, of course it does, because it would govern personal behavior. You have a right to determine who you buy things from and to what extent. Suppose none of the companies in your area offer the kind of coverage you want. Why should you be compelled to pay them (private entities, mind you) for what you don’t want?
The right to privacy can be overcome for compelling reasons. For example, there are conditions set out in the Constitution under which your privacy can be invaded. The government can search your person and your property, if those conditions are met. The question is whether the government has a compelling enough reason to overcome your right to privacy. Is society’s interest in making sure that you have healthcare coverage sufficient to overcome your right to privacy with regard to determining whether and to what extent you’ll buy coverage from a private entity? I think this is an open question. However, I don’t see any reason to believe that the courts would automatically rule in favor of the government.
Yet, even supposing that the government has the authority to mandate coverage and it can overcome your inherent right to privacy, there’s another problem with the mandates. This has to do with how they are enforced. The mandates are scheduled to be enforced as part of the tax code. So, for them to be constitutional, they will need to fit the rather strict requirements for taxes in the Constitution.
The problem with tax provisions to enforce the mandates is that they are direct taxes. They are levied on people depending on the condition of their having coverage, not on their income. As such, they must be “apportioned among the states”. (Article I, Section 2, Clause 3):
…direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…
This clause is there, I’m sure, to make sure that taxes are “fair”. In practice, this means that the government can impose a tax on each person (such as a capitation or "head tax") but that it can’t be higher in one state than another, or vary from person to person. It’s very unlikely that the mandates, as they occur in the tax code, will fit this definition.
The early income tax ran afoul of this same problem. The fix was the Sixteenth Amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
Note the part on “without apportionment among the several States,” which makes income taxes different from direct taxes.
If the courts throw out the mandates on this kind of technical ground, then the act could be fixed with an amendment. But given that a large number of states are challenging the constitutionality of the act and that Republicans control a significant number of state legislatures, the chances of getting three-fourths of them to go along look slim.
I’m sure that the government will argue that the penalty for not carrying coverage is just a part of the income tax. I don’t see how that will fly. The clear intention of the penalty is to force people to carry coverage. In this, it is different from other deductions. Most deductions are incentives to do things, not penalties for not doing them.
To see the difference, take a look at what you get to deduct. The deduction amounts are not a significant part of your income. For example, you might get a credit for installing solar panels. But, to anyone wealthy enough to install panels, the total amount is not going to compel them to install the panels because they can’t afford not to. It isn’t a significant part of their income. It makes it easier and acts as a reward, but it is not sufficient enough to be forcing.
But, for these mandates, the clear intention is to force people to buy coverage. If it weren’t a significant part of their income, it wouldn’t compel them to do it. In fact, the insurance companies argued that the amount was too low, and people would pay the penalty rather than get insurance.
In any case, the penalty is not tied to income; it’s tied to compliance with the mandate. In other words, it’s just a way of forcing people to do something without writing it into the criminal code. And since it is tied to the person, it’s a direct tax, which must be apportioned according to population. Should the courts agree, the mandates will have to be removed.
The final challenge applies to the entire act, not just the mandates. That challenge is whether this falls under the authority of the states or Congress. This is probably the weakest argument, since many things that were previously regulated by the states have come under authority of the federal government. The primary argument here is that they are subject to the Commerce Clause and that the activity is national in scope. This argument obviously won’t apply to the mandates themselves (because the Commerce Clause doesn’t apply, as noted above), but much of the rest of the act is subject to this challenge. This is a more traditional argument over the Commerce Clause. Are these other parts of the act, such as where a company can operate, subject to the Commerce Clause or not?
I think the strongest case the states could argue is the weight of history. For as long as the country has existed (and very likely before that, if they can find case law from the colonies), the states have had the purview to regulate insurance and healthcare. Why should this not continue?
At the same time, opening up the market in an individual state to competition from companies in others (where that activity isn’t subject to regulation from the state where it takes place), would possibly subject citizens of that state to abuses that could be prevented by state regulation. Why should California, for example, allow a company from Nevada to operate in that state if that company doesn’t agree to the standards in California?
I don’t think the courts will accept these arguments, however, about states’ rights. The market for healthcare is, de facto, national in scope, especially since equipment and provider services are readily accessible across state lines. Many markets that were local to individual states earlier in history have become national and federal regulation has followed. In addition, the regulations in the act are probably stronger than many state regulations, so they provide the consumer with more protection, not less. My suspicion is that the courts will go with that precedent. However, the courts could see that the states have a compelling interest in protecting their citizens in the special sphere of healthcare. If they do, they could rule against the federal government. This would have much larger implications [than] stripping out mandates would.
So, what should we expect from these lawsuits? I think that the claims that individual mandates are unconstitutional will be upheld, but the other claims will be thrown out.
Congress should act now to get rid of the mandates. By doing that, they would take away the biggest vulnerability in the current act. The individual mandate was a Republican idea (which, according to Joan Walsh, came from the Heritage Foundation). It’s a bad idea. It makes the act vulnerable. Beyond that, if the precedent stands, who knows what the Republicans will do with it when they regain control? They could easily mandate that everyone buy a gun, on the premise that owning a gun cuts down on crime. If the federal government can demand that you buy things, why not guns? In fact, perhaps corporations would prefer that you buy a package of services from them (everything you need for life!) when you turn 18, with a payment plan (that lasts until you’re 65). This will obviously make it easier for government because you’ll never go on welfare, so perhaps the government would mandate that, too. (Ugh!)
Nor are they necessary. As the experience in Vermont has shown, mandates aren’t necessary to fix the healthcare crisis. People want healthcare coverage; they just can’t afford it. Taking away the mandates would have little downside (other than ticking off the insurance companies).
But, Democrats obviously have their heads in the sand on this, and it’s very unlikely Congress will be able to turn around quickly enough to get these out. It’s not a very nimble body. They’ve purchased the mandates at great cost, and it’s unlikely they would recognize the problem, let alone fix it, even though they have the opportunity to slip this into reconciliation.
So, my prediction is that this goes to court, where it will take some time to reach the SCOTUS. Meanwhile, the act will come under a cloud and Republicans will be able to take advantage of the uncertainty to attack it. It seems likely that the mandates will be stripped out eventually. This will probably have little material effect on policy, but to the extent that our opponents can use it politically, it will come back to haunt us.
What should we do?
First of all, don’t panic. Having the courts strip out the mandates won’t have much practical effect, and it might well help us. Most of the act will remain intact. The bulk of it has to do with regulating the insurance companies and various kinds of funding (for clinics, and so on). The mandates don’t affect any of this. The biggest practical effect will be that the insurance companies won’t get so much of our money (yeah!), but that will also mean that some people won’t have insurance (boo!). It will open up a new kind of donut hole, where some people will be too affluent for government assistance, but not affluent enough to afford their own coverage. This is the perfect reason to have a public option.
Second, don’t get caught out defending the mandates. They could easily go away, leaving you holding the bag. It’s safe to say to people that losing the mandates will have little practical effect. It’s not necessary to the overall reform package and has little to do with reforms such as prohibiting rescissions and eliminating discrimination on pre-existing conditions. You can point to Vermont as an example, and quote Howard Dean that the mandates aren’t really necessary as long as people can get affordable coverage.
Third, get with your Senators immediately and ask them if they can strip out the mandates in reconciliation. There may yet be time. In any case, it’s another opportunity to challenge them on the public option. Can they get that in there now? If not, when?
The Patient Protection and Affordable Health Care Act is a big flipping deal. Now that we’ve got it, we need to keep it and move on. The public option is next.