Health care reform’s constitutionality: Like eating broccoli?

by Russell's Rants

Originally published February 9, 2011

Since President Obama signed his Health Care Reform Act into law, there have been approximately 20 lawsuits brought to challenge the constitutionality of the bill. Numerous state attorneys general have filed briefs in support of and in opposition to the new law. Our own new California Attorney General, Kamala Harris, weighed in last week by filing a friend-of-the-court brief with the 6th Circuit Court of Appeal in favor of the constitutionality of health care reform.

healthcare_law_image1To date, four federal district courts have ruled on the law’s constitutionality: the first two (in cases from Michigan and Lynchburg, Virginia) finding it a valid exercise of constitutional powers, and the last two (from Richmond, Virginia and just last week from Pensacola, Florida) holding the law to be unconstitutional (either in part or in whole).

After universal health care was first proposed by Franklin D. Roosevelt in the waning days of his presidency over 65 years ago; after the failure of Bill Clinton’s reform efforts in 1994; after a national election in which Barack Obama campaigned on reform in 2008; after one and one-half years of raucous political debate over his proposal; and after the vote of 535 members of the House and Senate and a presidential signature to finally pass reform into law – conventional wisdom now holds that whether Obama’s health care reform survives comes down to the “vote” of one Associate Supreme Court Justice by the name of Anthony Kennedy. In Part 2 of this article, I will take a look at Justice Kennedy’s jurisprudence on the Commerce Clause and try to venture a guess as to how he may rule.

The clause in the reform bill that has gotten all the attention is the Individual Mandate (known formally as the “Requirement to Maintain Minimum Essential Coverage”). The Individual Mandate requires every citizen to be insured – either through his or her employer or through purchasing health insurance on state exchanges (for which subsidies are available for those in lower economic categories). But starting in 2014, those without insurance will pay a tax of the greater of $95 or 1% of income for the privilege of remaining uninsured. By 2016, the penalties go up dramatically to the greater of $695 or 2.5% of income. These penalties apply to each family member without coverage, including children, to a maximum of $2,085 per family. The idea is to incentivize everyone to participate and broaden the pool of those insured to keep rates low. And with pre-existing conditions no longer a basis for insurance companies to deny coverage, the Individual Mandate was the quid pro quo needed to stop free-loaders from waiting until they’re sick to buy insurance.

The irony, of course, is that the Individual Mandate was part of the market-oriented alternative first proposed by Republicans in response to President Clinton’s 1994 efforts at reform. And if held unconstitutional due to the Individual Mandate, the Democrats’ next stab at health care reform may well be to return to a more liberal single-payer plan that jettisons the need for private insurance altogether.

The four federal district court cases that have ruled on President Obama’s Health Care Reform Act have taken diametrically differing views on the constitutionality of the Individual Mandate. All of the cases so far that have ruled focus on the Commerce Clause contained in Article I, Section 8 of the Constitution, which gives Congress the power to regulate commerce among the several states (i.e, interstate commerce).

Judges rule by way of statutory interpretation, precedent and analogy. And based upon a review of the four district court rulings so far, the question comes down to whether the judge believed the Individual Mandate to be more like the following:

  • Marijuana grown in one’s backyard for one’s own consumption;
  • Wheat farmed for personal use;
  • Possession of a gun near a school;
  • Violence against women; or
  • Eating broccoli because the government told you to!

The Republican Judge sitting in Pensacola, Roger Vinson, starts with the original intent of the Commerce Clause and provides what appear to be convincing citations to the Constitutional Convention and Federalist Papers showing that the Founders considered “commerce” to be limited to the trade and exchange of goods. He traces the expansion of the definition of Commerce Clause by Chief Justice John Marshall in the 1824 case of Gibbons v. Ogden to include “commercial intercourse” among the states (involving a dispute between competing steamboat services in New York and New Jersey). And he concedes that the Supreme Court further broadened the definition of interstate commerce in the 1930’s and 40’s in finally validating New Deal legislation.

The high watermark of the Commerce Clause was in a 1942 case called Wickard v. Filburn, in which Mr. Filburn’s plan to grow wheat to feed his chickens ran smack into the federal government’s plan to regulate wheat production per acre to drive up commodity prices during the Great Depression. Poor Mr. Filburn lost the case and was forced to destroy half of his wheat crop based upon the High Court’s decision that Congress could regulate wholly intrastate, non-commercial activity if such activity, viewed in the aggregate, would have a substantial effect on interstate commerce, even if the individual effects are by themselves trivial or indirect.

But none of that convinced our friend in Pensacola, Judge Vinson, that the Individual Mandate is a proper exercise of congressional power. He relies on the Rehnquist era cases of U.S. v. Lopez and U.S. v. Morrison that explored the Gun-Free School Zones Act of 1990 and the Violence Against Women Act of 1994, and found both to be constitutionally infirm. The reasoning of the majority was that neither regulation was of economic activity and that the effect on interstate commerce would require inference piled on inference – in other words that it was too attenuated. Nor was Judge Vinson convinced to sway from his ruling by a more recent Supreme Court case, U.S. v. Raich, upholding federal drug regulation of homegrown marijuana as a valid exercise of commerce clause powers.

Instead, last week’s ruling parsed the Individual Mandate as a case of first impression on the tension between “activity” and “passive inactivity.” In his formulation, “Never before has Congress required that everyone buy a product from a private company (essentially for life) just for being alive and residing in the United States.” In his view, the issue is whether the government can force you to eat broccoli as part of some national anti-obesity campaign or buy a General Motors car to support the federal bailout. He is essentially creating a wholly-new carve-out of the federal constitution based upon a zone of economic privacy. Who knew the penumbras of the zone of privacy emanated from well outside the Bill of Rights?

What Judge Vinson ignores, or downplays, is that everyone at some time gets sick and needs a doctor. And if that sick person can afford to buy insurance but does not, he or she has made a conscious decision to pass those costs on to hospitals, government and those who pay for their coverage by way of increased premiums. And the cost to give medical care to the uninsured is not insubstantial: $43 billion per year. In other words, no one is an autonomous island, and everyone gets involved in interstate commerce to obtain and use medical insurance. It takes more than a small dose of conservative judicial activism to find that a health care reform bill that covers over 30 million Americans who would otherwise be uninsured and holds the prospect of reducing rates for everyone will have zero impact on interstate commerce, but that’s what Judge Vinson finds.

The Individual Mandate might also be seen as a proper exercise of Congress’ other enumerated powers under Article I, Section 8 to collect taxes and provide for the general welfare or of its implied powers under the Necessary and Proper Clause. But all this is moot unless 5 justices on the Supreme Court agree, so let’s explore how Justice Kennedy might analyze the issue.

What Will Justice Kennedy Do?

Of the four district courts that have ruled on the constitutionality of President Obama’s Health Care Reform Act, the two Democrat-appointed judges have upheld it and the two Republican-appointed judges have invalidated it. The Supreme Court is now currently equally divided between four reliable justices for each side – with Associate Justice Anthony Kennedy often serving as the swing vote in 5-4 decisions. Although appointed by a Republican and generally considered a traditional conservative, Kennedy is your father’s old-style Republican capable of thinking in a modern context. In other words, he is the type of modern Republican thinker (perhaps because he has a lifetime appointment and will never face a Tea Party primary challenge) that proudly authored the Court’s majority opinion in Lawrence v. Texas, outlawing antiquated sodomy laws and legalizing, for the first time on nationwide basis, being gay.

So how might this modern Republican justice view Congress’ ability to enact national health care reform, including an individual mandate? It wouldn’t completely surprise me if the High Court side-stepped the Interstate Commerce clause debate and simply found Congress’ powers in this regard supported by the tax and spend authority or the Necessary and Proper Clause. But if the Court does engage in a full-blown Commerce Clause analysis, Justice Kennedy has a written record on the subject that gives us some helpful guidance. Since the Rehnquist era of somewhat reigning-in the Commerce Clause began, Kennedy wrote an extensive and illuminating concurring opinion in U.S. v. Lopez (striking down the Gun-Free Zones Act of 1990) and concurred in the majority opinions in U.S. v. Morrison (finding the Violence Against Women Act infirm) and most recently in Gonzales v. Raich (upholding the exclusivity of federal drug laws over California’s medical marijuana law).

My conclusion is that Justice Kennedy completely accepts the modern, post-New Deal conceptions of the Commerce Clause, recognizes that the Founder’s original understanding of “commerce” was understandably limited by their 18th Century circumstances and embraces modern case law definitions of “interstate commerce” based upon a practical approach to the post-industrial national economy in which we find ourselves in the 21st Century. Indeed, the two cases in which Justice Kennedy found Congressional overreach (Lopez and Morrison) have two things in common: the challenged laws were criminal (not commercial or economic) in nature and impinged upon areas of local law traditionally exercised by the states under concepts of federalism (namely, local crime, marriage, divorce and child-rearing). Thus, these are very limited, narrow carve-outs of the Commerce Clause that would seem to have no relevance to health care law or a plan for federal insurance. Indeed, Supreme Court precedent since the 1940’s has long recognized national insurance as an area of appropriate national regulation as affecting interstate commerce.

In his own words, Justice Kennedy begins his separate concurrence in Lopez by noting,

The history of the judicial struggle to interpret the Commerce Clause during the transition from the economic system the Founders knew to the single, national market still emergent in our own era counsels great restraint before the Court determines that the Clause is insufficient to support an exercise of the national power. That history gives me some pause about today’s decision, but I join the Court’s opinion with these observations on what I conceive to be its necessary though limited holding.

In other words, the original cramped understanding of the Founders, as laboriously recounted by Judge Roger Vinson in his Pensacola, Florida ruling finding the Health Care Reform Act to be unconstitutional, is not a particularly relevant inquiry. In his Lopez concurrence, Kennedy then goes on to reverently recount Chief Justice Marshall’s broad definition of commerce in Gibbons v. Ogden, followed by a rejection of the “formalistic” analysis of the Commerce Clause used in pre-New Deal case law. And he favorably refers to the post-New Deal case law (starting with NLRB v. Jones & Laughlin Steel which upheld the National Labor Relations Act through our favorite backyard wheat-for-chickens case, Wickard v. Filburn and beyond) repeatedly as marking the Court’s “definitive commitment to the practical conception of the commerce power,” which includes a certain deference to congressional enactments in the exercise of this power.

In Lopez, Justice Kennedy also notes that the Court has “an immense stake I the stability of our Commerce Clause jurisprudence as it has evolved to this point. Stare decisis operates with great force in counseling us not to call in question the essential principles now in place respecting the congressional power to regulate transactions of a commercial nature.”

He continues as follows:

That fundamental restraint on our power forecloses us from reverting to an understanding of commerce that would serve only an 18th-century economy, dependent then upon production and trading practices that had changed but little over the preceding centuries; it also mandates against returning to the time when congressional authority to regulate undoubted commercial activities was limited by a judicial determination that those matters had an insufficient connection to an interstate system. Congress can regulate in the commercial sphere on the assumption that we have a single market and a unified purpose to build a stable national economy.

So we’re not going back to where originalists, like Justice Thomas and Judge Vinson, want to take us. And while Justice Kennedy’s concurrences in Lopez and Morrison present a modest and limited restriction Congress’ Commerce Clause powers in the realm of criminal, non-economic activity traditionally relegated to the states, his concurrence in Raich (finding national drug laws to be a proper regulation of interstate commerce, even when focuses on homegrown pot used for personal purposes that never leaves the state) can only be read as a full-throated reaffirmation of an expansive interpretation of what constitutes interstate commerce.

In Judge Vinson’s Pensacola ruling last week, he seemed to think that a big distinction was to be made between regulating “action” versus “inaction,” and that Congress had no power to force someone to buy insurance who is merely minding his own business. But isn’t it merely a return to formalism to decide a case based upon a characterization of a power relationship as positive as opposed to negative – or mandatory versus prohibitory?

In other words, under the auspices of the Commerce Clause, the Court has upheld congressional regulation of occupation safety – mandating that employers spend money to bring their premises and treat their employees according to certain levels of safety – and accommodation of the disabled – requiring the expenditure of money to come up to code. It is frankly difficult to see Justice Kennedy buying into this formalistic paradigm in viewing the individual mandate as an unprecedented regulation of purely passive inactivity.

Even Justice Scalia is on record in his separate concurrence in Raich finding Congress’ power implicit in the Necessary and Proper Clause as a supplement to the express Commerce Clause. Wouldn’t it be a pleasant surprise if the Supreme Court followed post-New Deal Commerce Clause precedent and upheld President Obama’s Health Care Reform Act not with Justice Kennedy as the deciding vote in a 5-4 decision, but in a 6-3, 7-2 or even 8-1 decision leaving only poor Justice Thomas grousing that Mr. Filburn and his chickens were victims of grievous judicial error.

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