Erwin Chemerinsky – Dean/Professor of Law, UC Irvine School of Law
The Health Care Law Is Constitutional
Under current constitutional law, the federal health care law is clearly constitutional. It is not even a close question. The key issue is whether Congress has the authority to require that all individuals either purchase health insurance by 2014 or pay a penalty to be collected by the Internal Revenue Service. Opponents contend that the minimum coverage provision is unconstitutional as exceeding the scope of Congress’s powers. But this is constitutional both under Congress’s authority to regulate commerce among the states and as an exercise of congressional power to tax and spend for the general welfare.
It is important to note that none of the challengers to the health care law are claiming that the individual mandate is unconstitutional as infringing personal freedom. Conservative rhetoric attacking the law often is phrased in these terms and the underlying basis for objection is likely that people should have the right to be uninsured without paying a penalty if they wish. But under post-1937 constitutional law, economic and social welfare legislation is upheld so long as it is reasonable. Rarely has any law been struck down as failing this “rational basis” test and not even the law’s fiercest critics challenge the constitutionality of the individual mandate on this basis.
Thus, the litigation has focused entirely on whether Congress has the authority to require that individuals either purchase health insurance or pay a penalty. First, this is constitutional under Congress’s power, pursuant to Article I, section 8 of the Constitution to regulate commerce among the states. Since 1995, the Court has used a three-part test for determining whether a federal law is constitutional under the commerce power. Under the third prong of this test, Congress may regulate economic activity which taken cumulatively across the country has a substantial effect on interstate commerce.
There are thus two questions in assessing whether the individual mandate is within the scope of the commerce power. First, is Congress regulating economic activity? Second, if so, looked at in the aggregate, is there a substantial effect on interstate commerce?
It is the former which opponents of the law, including district court judges who have struck it down, have focused on. They contend that people who do not wish to purchase health insurance are inactive and that Congress cannot regulate inactivity. They argue that it is unprecedented for Congress to require an economic transaction and that if Congress can require purchasing of health insurance, there is no stopping point in terms of what Congress can force people to buy.
The key flaw in this argument is its failure to recognize that literally everyone will at some point need to use the health care system. Children must be vaccinated to attend school. If a person contracts a communicable disease, the government can require that it be treated. If a person is in a car accident, the ambulance will take him or her to the nearest emergency room for treatment.
Therefore everyone faces an economic choice: whether to purchase health insurance or whether to self-insure. Either is economic activity. Congress is regulating this economic choice by imposing a penalty on those who choose to self-insure in order to create a system where all can have access to the health care system. Opponents of the health care law say that if it is upheld then the government can force people to buy an American car or to eat broccoli. But a person can opt to not drive or not to eat vegetables; no one realistically can opt out of health care.
The second question then becomes whether taken cumulatively the law has a substantial effect on interstate commerce. Health related spending was $2.5 trillion in 2009, or 17.6% of the national economy. In the last case to deal with the scope of Congress’s commerce clause power, Gonzales v. Raich in 2005, the Court held that Congress constitutionally could criminally prohibit and punish cultivation and possession of a small amount of marijuana for personal medicinal use. If Congress has the power to prevent Angela Raich from growing a small amount of marijuana to offset the ill effects of chemotherapy, then surely it has the authority to regulate a two trillion dollar industry.
Although the discussions and decisions about the constitutionality of health care have focused primarily on the commerce clause, there is an alternative basis for upholding the law: Congress’s broad power to tax and spend for the general welfare.
Those who do not obtain health insurance must pay a penalty, calculated as a percentage of income and administered through the tax collection system. The penalty applies only to those who have income exceeding an amount specified by statute and is calculated solely based on this income. In 2016, for
example, the payment by a taxpayer who does not obtain coverage will never be greater than either 2.5% of the taxpayer’s household income above the income tax filing threshold or a flat dollar amount ranging from $695 to $2085, depending on family size.
Simply put, the federal health care law imposes a tax on those who do not purchase insurance to generate revenue that the federal government can use to address the significant cost of providing healthcare for taxpayers without adequate insurance. The only objection is that the law does not specifically use the word “tax.” But as the Supreme Court often has recognized, labels do not determine constitutionality. Whether the law uses the word “tax” is irrelevant in assessing whether this is an action which fits within the scope of Congress’s very broad power to tax and spend for the general welfare. Besides, the legislative history is clear that members of Congress on both sides of the political aisle saw this as a tax and used the words “tax” and “penalty” interchangeably.
Thus, the health care law should be upheld as a valid exercise of congressional power under either the commerce power or the taxing and spending power. The constitutional clock can’t and shouldn’t be set back to pre-1937 law which narrowly circumscribed Congress’s powers. The justices should not substitute their judgment about the wisdom of the law for the choices made by the democratically elected President and members of Congress as to how to deal with an critically important social issue.
Erwin Chemerinsky – Dean and Distinguished Professor of Law, University of California, Irvine School of Law