Is Obamacare constitutional?

“The Government advances two theories for the proposition that Congress had constitutional authority to enact the individual mandate. First, the Government argues that Congress had the power to enact the mandate under the Commerce Clause… Second, the Government argues that if the commerce power does not support the mandate, we should nonetheless uphold it as an exercise of Congress’s power to tax…

The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress’s actions have reflected this understanding. There is no reason to depart from that understanding now…

The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to ‘regulate Commerce…

Because the Commerce Clause does not support the individual mandate, it is necessary to turn to the Government’s second argument: that the mandate may be upheld as within Congress’s enumerated power to ‘lay and collect Taxes.’ Art. I, §8, cl. 1…

The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness…”

June 28, 2012 - Supreme Court Decision: PPACA

“There has been no shortage of court cases regarding the constitutionality of the Affordable Care Act. Before today, four courts, including the Sixth Circuit Court of Appeals, examined the health reform law and found it constitutional.

Today, a different court ruled against the Affordable Care Act’s individual responsibility provision. We strongly disagree with this decision and we are confident it will not stand.

The individual responsibility provision – the main part of the law at issue in these cases – is constitutional. Those who claim this provision exceeds Congress’ power to regulate interstate commerce are incorrect. Individuals who choose to go without health insurance are making an economic decision that affects all of us – when people without insurance obtain health care they cannot pay for, those with insurance and taxpayers are often left to pick up the tab…

That’s why the Affordable Care Act requires everyone who can afford it to take responsibility for their own health care and carry some form of health insurance…

Today’s ruling is one of many decisions on the Affordable Care Act that we will see in the weeks and months ahead. In the end, we are confident the Act will ultimately be upheld as constitutional.”

“…[S]ome state and federal officeholders are urging that my top priority instead should be to bring a lawsuit challenging the constitutionality of the new health insurance reform law… I have carefully considered the basis of the lawsuit they have urged. My considered judgment is that it lacks merit…

Two constitutional issues are raised in the lawsuits. The first is whether Congress exceeded its proper bounds by enacting a mandate for most Americans to purchase health care coverage. For seventy years, the Supreme Court has read the Commerce Clause broadly to authorize Congress to address our most pressing national economic concerns. In Gonzales v. Raich, a 2005 decision, the court held that the Commerce Clause authorizes Congress to prohibit the cultivation of marijuana for personal medical use because it has economic effects, even though no economic transaction was involved at all.

The claim is also made that Congress has never required anyone to purchase a product or service. That is factually wrong. The Second Militia Act of 1792, signed by President George Washington, explicitly required many Americans to make an economic purchase: of a gun, ammunition, gunpowder, and a knapsack to be properly prepared for military service… In short, the Commerce Clause claim has no legal merit unless activist judges, of the type these officeholders normally deplore, were to tear up decades of settled jurisprudence.

The other constitutional argument is that the Tenth Amendment does not permit Congress to require states to establish insurance exchanges. But the new law does not require that. Instead, it gives states a choice, and if they decline, the federal government will take on that responsibility. Just as Medicaid is a voluntary federal-state program whose constitutionality has been upheld by the courts, this new law is entirely consistent with the Tenth Amendment.”

“The individual mandate, which amends the Internal Revenue Code, is not actually a mandate at all. It is a tax. It gives people a choice: they can buy health insurance or they can pay a tax roughly equal to the cost of health insurance, which is used to subsidize the government’s health care program and families who wish to purchase health insurance…

The Constitution gives Congress the power to tax and spend money for the general welfare. This tax promotes the general welfare because it makes health care more widely available and affordable. Under existing law, therefore, the tax is clearly constitutional…

Many important and popular government programs are based [on] Congress’s ability to give incentives through taxation and redistribute tax revenues for public purposes. To strike down the individual mandate the Supreme Court would have to undermine many years of precedents justifying these programs that stretch back to the New Deal (and in the case of the rules for direct taxes, to the very founding of the country).

Opponents of the individual mandate insist that they are only defending individual freedom, but they are actually taking a far more radical position. They are really claiming that it is unconstitutional to make Americans pay taxes.”

“…[T]he mandate is lawful and clearly so –pursuant either to Congress’ authority to ‘regulate commerce among the several states,’ or to its authority to ‘lay and collect taxes to provide for the General Welfare.’ With respect to Congress’ interstate commerce authority, the goals that drive this legislation – including achieving universal coverage, eliminating adverse selection, eliminating pre-existing conditions as a prerequisite for coverage, facilitating broad-scale pooling of individuals not covered by group health plans, and radically reducing costly emergency room visits by uninsured individuals – are eminently lawful objects for the exercise of that power. In the context of current health insurance market circumstances and the framework of the legislation, the use of an individual mandate, structured as it is to ensure affordability for all who are subject to it, is likewise an eminently rational and well-supported (‘necessary and proper’ in the words of Article I, §8) means for achieving these goals. The same goals and choice of means fit the mandate snugly within precedents broadly defining Congres’ authority to tax and spend.

Opponents’ arguments to the contrary express philosophical objections to the concept of mandatory health insurance in principle, without regard to the practical issues the Supreme Court has always used to evaluate laws challenged as outside Congress’ interstate commerce authority… [T]hey have no basis in law, neither in the grants of authority to Congress in Article I nor in limitations on that authority in the Bill of Rights, nor in the case law interpreting these provisions.”

“…[A] mandate to purchase insurance can be justified by the Constitution’s grant to Congress of a taxing power and a commerce clause power. The taxing power is a well-established basis for enacting an individual mandate. Indeed, this country has had a tax-based mandate to purchase health care insurance for nearly 45 years. The Medicare program imposes a payroll tax on Americans as a way to fund coverage of their hospital costs once they reach age 65. People cannot opt out of Medicare… Similarly, Congress can use a payroll tax to implement a mandate for individuals to purchase health insurance before they reach age 65…

Under the commerce clause, Congress has the power to regulate interstate commerce, and the health care insurance industry clearly falls within the Supreme Court’s understanding of interstate commerce… [A]n individual mandate to purchase health care insurance falls comfortably within the demands of our Constitution.”

“As to the Commerce Clause, Congress specifically found that, in the interstate markets for health care and health insurance, the minimum coverage provision ‘regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased.’ PPACA [Patient Protection and Affordable Care Act] §§ 1501(a)(2)(A), 10106(a). The predicate of this finding, and a distinguishing feature of the health care market, is that virtually everyone will need medical services at some point. Congress had a rational basis to conclude that economic decisions not to purchase insurance to pay for these services, taken in the aggregate, substantially affect interstate commerce… Congress also rationally determined that the minimum coverage provision is essential to its comprehensive regulatory scheme for the interstate markets in health care and health insurance. These findings are more than sufficient to sustain the Act as an exercise of Congress’s Commerce Clause power. See Gonzales v. Raich, 545 U.S. 1, 16-17 (2005).

Apart from its power under the Commerce Clause, Congress also has authority under its power to tax and spend to ‘provide for the… general Welfare,’ U.S. Const. art. I, § 8, cl. 1, to require individuals to pay a penalty… if they do not obtain health insurance. The determination of what furthers the general welfare is for Congress to make, ‘unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment.’ Helvering v. Davis, 301 U.S. 619, 640 (1937). The minimum coverage provision… falls squarely within Congress’s ‘extensive’ General Welfare authority. License Tax Cases, 72 U.S. (5 Wall.) 462, 471 (1867).”