The Constitution & The Economy

Health Reform: The Last Stand

The new health reform law, dubbed” Obamacare,” transfers massive new power to the federal government. If it’s deemed constitutional, one of the most important components of our American constitutional architecture—the concept of limited, enumerated congressional power—is dead. Health care reform is the last stand.

At the heart of the constitutional debate is the individual mandate, which forces everyone to buy private health insurance. Individuals now outside the health insurance market will be forced inside it, taking away their freedom to decide how to spend their hard-earned dollars among an array of private products. The federal government has never before attempted to interfere with your liberty to decide what private products to buy or forgo. It’s no exaggeration to say that, in the battle over health reform, your individual liberty is at stake.

The political left has been quick to dismiss the lawsuits challenging health reform law as “frivolous” and even “silly.”  Yet well over half of the states have joined these lawsuits, and there have been several important victories for the challengers in federal courts in Virginia and Florida.

Supporters of Obamacare invoke specious comparisons to avoid the actual constitutional issues being raised by these lawsuits. For example, they ask: If states can force you to buy car insurance, why can’t the federal government force you to buy health insurance? As any lawyer knows, there is a huge legal difference between state versus federal government power. States aren’t bound by the principle of limited and enumerated powers—this is a principle applicable only to the federal government. As James Madison explained in Federalist No. 45, “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.” The “numerous and indefinite” powers remaining in state governments include what is commonly referred to as the “police power,” which Federalist No. 45 explained “extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”

State laws mandating car insurance are a police power exercise, a means of protecting peoples’ lives and property and defining the scope of the privilege (license) to drive on the state’s roads. By contrast, the individual mandate of health reform cannot be based on the police power for  the simple (and uncontested) reason that the federal government doesn’t have a police power. This also explains why states like Massachusetts can impose a health insurance mandate without raising constitutional concerns. Massachusetts has a police power; the federal government does not.

It’s critically important that Americans “get” this distinction: the federal government doesn’t have the power to do anything it wants to do. It’s a government of limited and enumerated powers only, so the six million dollar constitutional question is this: Which of the enumerated powers could conceivably justify a federal mandate to buy health insurance?

The enumerated power relied upon to justify Obamacare is the power to regulate interstate commerce. This points to a second specious argument raised by the law’s supporters: If programs like Medicare and Social Security are constitutional, why isn’t health reform? The answer is obvious to any lawyer: Medicare and Social Security are not exercises of the commerce power. They are exercises of the enumerated power to tax and spend for the general welfare. No one doubts that, if Congress had enacted Medicare-for-all, it would have been a perfectly constitutional exercise of the taxing power. But this isn’t what Congress chose to do—it didn’t raise taxes and then spend them on a government-run health program. Instead, Obamacare imposes an individual mandate to buy a private product, then penalizes individuals who fail to buy it. This is why every single court that has addressed the Obama Administration’s taxing power argument has rejected it. Trying to justify health reform as a taxing power exercise doesn’t pass the laugh test.

If health reform is constitutional, it must be because it’s deemed a valid exercise of the commerce power. But not buying a private product isn’t economic activity. Not buying something is inherently anti-economic. Nothing is being bought or sold. Nothing of value is being exchanged. In fact, nothing is happening at all.

A harder question is whether failing to buy something has a “substantial effect” on interstate commerce—something the Supreme Court has endorsed in prior cases. But even these substantial effect cases have always required some underlying “activity,” such as growing wheat or growing and using marijuana. There has always been an underlying volitional act that, in the aggregate, has had a substantial effect on interstate commerce.

The Obama administration tries to get around this by claiming that the Commerce Clause reaches not only economic “activity,” but also any economic “decision” with a substantial effect on commerce. A person who doesn’t buy health insurance, the argument goes, may not be undertaking an “activity” but is surely making a “decision” that substantially affects interstate commerce, as their health care costs may be shifted onto providers or other taxpayers.

The administration’s argument is novel and breathtaking in scope. There’s no Supreme Court precedent that has ever dared to endorse the idea that merely deciding whether to do something should be the functional equivalent of actually doing something.

In classic Orwelllian doublethink—where black becomes white—the Obama administration would have us believe that inactivity is really just a form of activity, since there’s really is no such thing, in today’s interconnected world, as “inactivity.” Everything, in some way, has a substantial effect on the economy.

Such an omnipotent Commerce Clause is inherently incompatible with the principle of limited and enumerated powers. Realizing this, the Obama administration has been desperately trying to identify a limiting principle to reassure us that upholding the law won’t fundamentally alter our constitutional structure. The only thing they have come up with is the argument that health care is “unique.”

But there’s nothing unique about health care. Many commercial markets are unavoidable—it’s hard to avoid buying things such as food, water, clothing and housing, to name just a few. And once an individual enters these markets, a failure to pay for them will shift the cost to others through higher prices.

The contorted logic being used to justify Obamacare should frighten ordinary Americans. If it’s accepted, the Commerce Clause becomes a police power, capable of reaching every decision we make. Congress can make us buy broccoli, American cars, gym memberships, or anything else it wants. There’s no discernible limiting principle to this theory. And without a discernible limiting principle, there can be no principle of limited government.

Elizabeth Price Foley is the Institute for Justice Chair in Constitutional Litigation and Professor of Law at Florida International University College of Law. Her research centers on the intersection of health care and constitutional law. She is the author of Liberty for All:  Reclaiming Individual Privacy in a New Era of Public Morality (Yale 2006), The Law of Life and Death (Harvard 2011), and is currently working on a book about the tea party, forthcoming in early 2012 from Cambridge University Press.