an unanticipated consequence of
Jack M. Balkin
Jack Balkin: jackbalkin at yahoo.com
Bruce Ackerman bruce.ackerman at yale.edu
Ian Ayres ian.ayres at yale.edu
Mary Dudziak mary.l.dudziak at emory.edu
Joey Fishkin joey.fishkin at gmail.com
Heather Gerken heather.gerken at yale.edu
Abbe Gluck abbe.gluck at yale.edu
Mark Graber mgraber at law.umaryland.edu
Stephen Griffin sgriffin at tulane.edu
Bernard Harcourt harcourt at uchicago.edu
Scott Horton shorto at law.columbia.edu
Andrew Koppelman akoppelman at law.northwestern.edu
Marty Lederman marty.lederman at comcast.net
Sanford Levinson slevinson at law.utexas.edu
David Luban david.luban at gmail.com
Gerard Magliocca gmaglioc at iupui.edu
Jason Mazzone mazzonej at illinois.edu
Linda McClain lmcclain at bu.edu
John Mikhail mikhail at law.georgetown.edu
Frank Pasquale pasquale.frank at gmail.com
Nate Persily npersily at gmail.com
Michael Stokes Paulsen michaelstokespaulsen at gmail.com
Deborah Pearlstein dpearlst at princeton.edu
Rick Pildes rick.pildes at nyu.edu
Alice Ristroph alice.ristroph at shu.edu
Neil Siegel siegel at law.duke.edu
Brian Tamanaha btamanaha at wulaw.wustl.edu
Mark Tushnet mtushnet at law.harvard.edu
Adam Winkler winkler at ucla.edu
The actual arguments the parties have offered to the Court in the Affordable Care Act case the Court will hear next Tuesday bear little resemblance to the “Congress requiring everyone to eat broccoli” caricatures that have dominated much of the public debate. My colleague Randy Barnett—co-counsel for the individual respondents—has helpfully published a recent post in which he elaborates upon some of the respondents’ arguments against the constitutionality of the insurance-maintenance provision of the ACA, section 5000A; so I thought I’d take this occasion to provide a few reactions to those arguments, and to more fully explain how the issues have been teed up to the Court. Although this post is long, there are several important aspects of the case it does not address, including Congress's taxing power, severability, standing, and the possibility that the Anti-Injunction Act might preclude the Court from reaching the merits. My objectives here are simply to provide a better understanding of the primary issues that are joined in the Court and, in particular, to better explain for Balkinization readers the nature of the arguments upon which the government is relying—arguments that tend to become lost or obscured in the noise of the public debate.
Subject to some exceptions, section 5000A of title 26 of the U.S. Code generally requires an individual, beginning in 2014, either (i) to ensure that she and her dependents are “covered under minimum essential coverage” for financing health care costs—coverage that can include, inter alia, government-sponsored health insurance such as Medicare or Medicaid, insurance under an employer-sponsored plan, or “coverage under a health plan offered in the individual market within a State”—or (ii) to make what the Act calls a “shared responsibility payment” to the IRS on her annual tax return, a payment calibrated to the individual’s income. This requirement is hardly a stand-alone provision: It is designed to supplement extensive federal regulation, in the ACA itself and a host of other federal statutes, of the manner in which health care is provided and financed across the nation. For example, the majority of individuals will satisfy the section 5000A requirement through their employer-sponsored insurance plans that Congress has extensively regulated, or through Medicaid or Medicare. Therefore, section 5000A will require only a relatively small percentage of Americans either maintain health insurance purchased on the open market or to make a shared responsibility payment to the IRS.
In the first part of this post, I’ll describe the two principal arguments the federal government offers to the Court in support of the constitutionality of section 5000A. In the next two parts, I’ll consider the respondents’ responses to these two government arguments—focusing in Part II on Commerce Clause counterarguments, and in Part III on counterarguments about the Necessary and Proper Clause. Finally, in Part IV, I’ll briefly address some of the other, overarching themes of the respondents’ objections.
Much of the public debate about section 5000A, and a significant number of pages of the respondents’ briefs in the case, have been devoted to the rather abstract and academic question of whether a stand-alone statutory requirement that individuals purchase a specified product is by definition a “regulation” of interstate commerce that Congress can enact under the Commerce Clause, as Judge Silberman concluded for the D.C. Circuit in the Seven Sky v. Holder case. But there’s no need for the Court to address that abstract question, since what Congress did in the ACA is a far cry from that commonly posed hypothetical.
To see why that’s so, it’s important to understand the two principal, mutually reinforcing arguments the government is advancing in support of the constitutionality of section 5000A, arguments that do not depend upon the idea that any and all requirements to engage in commerce are “regulations” of commerce: First, the government emphasizes that Congress’s principal aim in enacting the ACA was not to mandate that individuals maintain health insurance for its own sake, or simply to stimulate the market for health-care insurance. Section 5000A is, instead, an ancillary provision, designed to ensure that the central components of the Act—the provisions that were at the heart of our national health care debate in 2009—can accomplish what Congress intended them to do. As those who followed the national debate will recall, for the minority of individuals not covered under employer plans and Medicare, there remained a serious national problem: Insurance companies either denied health insurance to persons with preexisting conditions or charged rates that made such insurance unaffordable. Those practices effectively deprived such persons of a way to finance their access to health care services, and shifted the exorbitant costs of emergency and chronic health care to others. Congress enacted ACA in order to address that problem.
Thus, the central components of the ACA are the so-called “Guaranteed Issue” and “Community Rating” provisions, which prohibit insurers from denying coverage or charging higher premiums, respectively, to any person because of that person’s preexisting medical conditions or medical history—ensuring, in effect, the nondiscrimination norms that Congress had already effectively required for the remainder of Americans in employer-sponsored plans and Medicare.
These Guaranteed issue and Community Rating provisions—the core components of the Act—are indisputably constitutional exercises of Congress’s Commerce Clause authority. No one is challenging their constitutionality—although they, too, would likely fall, either in these cases or in follow-on cases, if the Court were to hold that section 5000A is unconstitutional. (The parties agree that those particular provisions are not severable from section 5000A.)
Congress reasonably found that section 5000A, the insurance maintenance provision, is “essential” to make effective those core provisions of the ACA. See 42 U.S.C. 18091(A)(2)(i), 18091(A)(2)(H). It’s not difficult to see why this is so. If the government prohibits insurance companies from taking account of medical history and pre-existing conditions in setting rates, persons who purchase such insurance will disproportionately be those with current, acute (and expensive) medical needs. Indeed, the CR and GI provisions themselves create an incentive for individuals who might otherwise have purchased insurance while healthy to instead wait until they need catastrophic or emergency health care, since at that time they will be able to pay the same premiums as completely healthy persons—and will have avoided the payment of premium during the months and years when they were healthy. Why insure early, and incur the costly monthly premiums, if there’s no downside to waiting until the last minute? And where that is the case—that is to say, where the premiums are overwhelmingly paid only by persons once they develop the acute need for health care services—the insurers would need to set the basic, undifferentiated premiums at ever-increasing rates, since they could hardly sustain themselves where they were able neither to discriminate among beneficiaries based on their medical conditions and history, nor to spread the costs of insurance among a more representative class of those who would eventually consume health care. These higher rates would undermine the whole point of the Act to guarantee affordable health care for all Americans. Indeed, many persons would once again decline to purchase such expensive insurance policies. This so-called “death spiral,” in turn, would almost certainly lead to exit of most or all insurers from the relevant market, and there would then be no guarantee of payment for the health-care expenses of those who would have been insured.
And, not surprisingly, that has been the experience in those states that attempted such reforms without a minimum coverage provision: guaranteed-issue and community-rating provisions enacted in isolation created a spiral of higher costs and reduced coverage. (For more on this phenomenon, see pages 44-54 of the Government’s brief on severability.) Aware of that history, Congress enacted section 5000A, which is designed to ensure that the Guaranteed Issue and Community Rating provisions would work as they were intended. Enforcement of those provisions without a minimum coverage provision would make health insurance less affordable and then virtually unavailable—the exact opposite of Congress’s goals in enacting the ACA.
The government’s second argument, very much related to the first, is that in order to effectuate this larger, concededly constitutional economic scheme, section 5000A is appropriately tailored to regulate the way in which a class of persons in the commercial sphere pay for services they will consume: It applies not to a random group of persons, or to a class of persons who are “inactive” in, or who are strangers to, any relevant market, but instead to persons who almost certainly will consume the ultimate economic product—namely, health-care services, including emergency and comprehensive services—and who are not otherwise guaranteed health-care coverage under some other scheme (such as incarcerated felons and members of Indian tribes, who are exempted). The uninsured, like all of us, invariably will consume health care services, including, most expensively, emergency services that society guarantees they can receive without regard to ability to pay (in addition to age-old medical norms and state laws, see, e.g., 42 U.S.C. 1395dd). Some significant number of the uninsured will either not be able to pay for such services, or would simply purchase insurance at the time of their acute need at the low costs resulting from the Guaranteed Issue and Community Rating provisions. If that were allowed to happen, the integrated scheme could not work as intended—the insurance companies could not possibly cover the costs of the health care that is actually consumed.
Section 5000A thus not only is necessary to the effectuation of the core provisions of the ACA, but also itself regulates a class of individuals who are to be market participants “in the commercial sphere” (Lopez, 514 U.S. at 574 (Kennedy, J., concurring); see also Morrison, 529 U.S. at 610-11); and it is directed to economic conduct that is either interstate commerce itself or that, at a minimum, has a substantial effect on interstate commerce—namely, the way in which individuals pay for their inevitable consumption of health care services. (The substantial effects test would be easily met here: Congress found that, even without the GI and CR provisions, the uninsured consumed approximately $116 billion in health care services in 2008, and providers were not compensated for $43 billion of that total—costs that were shifted to other market participants, thereby raising the average family’s annual health insurance premiums by more than $1000.)
To be sure, section 5000A imposes the mandated choice on most of these market participants before the moment they consume the relevant health-care services—which is hardly surprising, since that’s in the very nature of an insurance-based solution to rising health-care costs. But there’s nothing unconstitutional about this choice of the timing of regulating the the manner in which such services are paid for. Indeed, that prophylactic choice of timing makes perfect sense here, since a requirement that the uninsured purchase insurance at the time they consume the relevant health care services would undermine, rather than effectuate, the primary provisions of the ACA. Congress this tailored section 5000A closely to the identified problems. Indeed, there is no obvious, less restrictive way that Congress could have ensured that the class of affected persons would be able to pay for the health care they will consume without either undermining the Community Rating and Guaranteed Issue provisions or eliminating the longstanding guarantees that all those in need of emergency or catastrophic care will receive it.
This tailoring demonstrates that the proffered reason[s] for the legislation’s necessity [are] not a mere artifice” (Comstock, 130 S. Ct. at 1968 (Kennedy, J., concurring in the judgment)). It is not a case analogous to the hypothetical requirement that all Americans buy an American-made car in order to bolster the struggling U.S. auto industry. (Health insurance is not purchased for its own sake, like a car or broccoli; it is a means of financing the health-care consumption by persons who are not strangers to the market but inevitable (typically involuntary) participants therein.) Nor is it the case, as Randy suggests, that Congress enacted section 5000A simply “for the purpose of providing what amounts to a subsidy or transfer payment to the insurance companies.”
What are the respondents’ primary counterarguments to these two interrelated government arguments? Let’s start with the second argument I summarized above, namely, that section 5000A is the regulation of individuals’ means of paying for a service, i.e., health care, that they will invariably consume—a classic regulation of commerce itself (or, at a minimum, of economic activity that substantially affects interstate commerce). The principal response to this in Randy’s brief (p.34) is that section 5000A “does not regulate the ‘economic activity’ of paying for healthcare,” because it applies “whether or not the regulated actors will be obtaining healthcare, let alone failing to pay for it.” In other words, this counterargument (as I understand it) is that section 5000A is not a regulation of interstate commerce, or of the economic activity of paying for consumed health care, because some number of the individuals in the relevant class of uninsured persons will not ever receive health care, or would pay for it from their own funds.
The factual predicate for this counterargument might be correct—perhaps there are a tiny handful of uninsured people who will never need health care at all (e.g., those who die suddenly in the near future); and perhaps there are some others who would pay for the health care services with their own funds (although after the enactment of the Guaranteed Issue and Community Rating provisions, it is much more likely that virtually everyone would simply wait until they need expensive medical care, and then purchase insurance to pay for it at the now-lower rates). But how does that affect the fact that the aim and effect of section 5000A are to make sure that everyone can and will pay for the health care services that the government guarantees they can consume? To be sure, it might be somewhat more efficient if Congress were somehow able to peer into a crystal ball and apply section 5000A only to those persons who would consume health care without paying for it, and those who would purchase insurance only when they needed such care. The Constitution does not require that degree of precise tailoring, however. (Raich is an analogous case in which Congress regulated a class of persons before some subset thereof would engage in market conduct that would frustrate the broader federal legal scheme. There, possession and cultivation of marijuana was prohibited because some unknown number of those engaged in that activity would later divert the drug to the interstate market, and thereby undermine Congress’s ban on interstate sales.)
In any event, there is no such crystal ball: There is simply no way to identify in advance which of the persons in the uninsured class those would be—any more than Congress could have identified in advance which persons cultivating or possessing marijuana for medical purposes in California would have allowed their marijuana to seep into the interstate market (see Raich). As the Solicitor General puts it in his reply brief (pp.10-11): “It is a sad but ineluctable fact of human existence that health is not immutable, and ‘healthy individuals’ are not a static class. Insurance exists because ‘more-healthy people’ become ‘less-healthy people,’ often as a result of a bolt-from-the-blue event like a heart attack or cancer diagnosis.”
The lead individual plaintiff in Randy’s case, for instance, Mary Brown, thought she would be able to pay for all of her health care; she did “not believe that the cost of health insurance coverage [was] a wise or acceptable use of [her] financial resources." J.A. 141. But it turned out that wasn’t so: In their recent bankruptcy petition, she and her husband list among their liabilities thousands of dollars in unpaid medical bills, including bills from out-of-state providers—liabilities that other market participants will have to pay. Mary Brown's example is hardly unique—many of us, unfortunately, will one day be confronted by health care crises that would require far more resources than we could have anticipated.
The respondent States make what appears to be a slightly different argument in their brief (p.25), namely, that section 5000A can’t fairly be viewed as a regulation of the manner of paying for health care services (as opposed to the market for health insurance) because the ACA does not require “individuals to actually pay for health-care services with * * * insurance.” I must confess that I don’t quite understand this argument. Obviously, Congress enacted section 5000A, at least in large measure, so that the covered persons would use pre-purchased insurance to pay for their health care—and that’s hardly a crazy assumption: If you had such insurance, wouldn’t you use it to pay the exorbitant costs of catastrophic and emergency care? As the Solicitor General explains at page 5 of his Reply Brief, “Congress could reasonably conclude that applying the minimum coverage provision before actual consumption of health care would be more effective in extending coverage, removing barriers to care, and reducing cost-shifting than respondents’ alternative. Congress also could reasonably assume that individual with health insurance would act rationally and use it to pay their health-care bills. And even if some insured persons inexplicably did choose to pay out of pocket, the act would still achieve Congress’s objective because their care would be paid for without any cost-shifting.”
As Randy notes in his post, his brief with Michael Carvin also argues that the “substantial effects” doctrine is more properly viewed (as Justice Scalia argued in Raich) as part of the analysis under the Necessary and Proper Clause, rather than the Commerce Clause. This argument runs into at least two major problems. First, as the Court has recently reaffirmed in Lopez, Morrison, and Raich, it views the “substantial effects on interstate commerce” test as one component of the analysis under the Commerce Clause itself, applying at a minimum to sustain the regulation of economic conduct (such as the possession, obtaining and maintenance of “medical marijuana” in Raich, and the consumption of health care services here) that has substantial effects on interstate commerce. (A side point that does not affect this case but that might be important for doctrinal purposes: Randy’s brief asserts at several points that the substantial effects test can only be applied to “economic” activities; but the Court has not yet resolved that question. The Court in Morrison “reject[ed] the argument that Congress may regulate noneconomic, violent criminal conduct based solely on that conduct’s aggregate effect on interstate commerce,” 529 U.S. at 617; but in that same case the Court expressly declined to “adopt a categorical rule against aggregating the effects of any noneconomic activity,” id. at 613. Since section 5000A regulates the economic activity of consuming health care services, the Court need not decide when and under what circumstances the effects of noneconomic activities can ever justify the exercise of the Commerce authority.)
Second, as I explain below, viewing section 5000A under the aegis of the Necessary and Proper Clause would not, in any event, affect its ultimate constitutional fate.
Wholly apart from (but related to) its arguments under the Commerce Clause, the government also argues that section 5000A was enacted pursuant to Congress’s “necessary and proper” power for at least two reasons, roughly corresponding to the two principal government arguments I summarized above. First, it is designed to ensure that the central provisions of the ACA—the Guaranteed Issue and Community Rating provisions—can actually guarantee the availability, and lower the cost, of health care for all Americans. Second, it is a backstop to the norms and laws, such as 42 U.S.C. 1395dd, that guarantee all persons access to expensive health care services: Without section 5000A—and particularly in light of the CR and GI provisions—many persons would not receive those services without payment, thereby shifting costs to the rest of us.
a. "Necessary." For reasons explained above, there can be little doubt that section 5000A is “necessary” to carry into execution the primary parts of the ACA, whether one applies the traditional rational basis test or instead asks whether there is a “tangible” link, rather than “a mere conceivable rational relation.” See Comstock, 130 S. Ct. at 1367 (Kennedy, J., concurring in the judgment) (discussing the possible tests). Indeed, the experience in the states reasonably led Congress to conclude that section 5000A was “essential” to the success of the Guaranteed Issue and Community Rating regulations; and it is not obvious that there would be any other way, within a market-based system, to impose such regulations and still accomplish the objectives of the Act. (A footnote in Randy’s severability brief questions how frequently the uninsured would be able to purchase insurance “on the way to the hospital,” because the Act permits insurers to restrict enrollment to specified enrollment periods. But even if such waiting periods prevented some uninsured persons from taking advantage of the Guaranteed Issue and Community Rating provisions at the last minute, many of those persons would then be entitled to emergency even where they had no funds or insurance to pay for it, thereby shifting costs to others. And the ailing individuals presumably would purchase the insurance in the next enrollment period, as well. The respondent States’ brief offers one other alternative (p.50): “Congress could have conditioned an individual’s right to guaranteed issue or community rating on obtaining qualifying insurance during an initial fixed enrollment period, so that individuals could obtain the full benefit of those regulations but could not ‘buy their insurance on the way to the hospital.’” But even if that alternative would have eliminated the phenomenon of the uninsured purchasing insurance only "on the way to the hospital," it would not guarantee that all the uninsured would in fact be able to able to pay for the health care services they will eventually need. Nor would it ensure that the insurance plans themselves—like employer plans and Medicare—cover a representative cross-section of the population (rather than a participant base that is less healthy and disproportionately at risk of incurring medical costs than a more representative set of participants). Therefore the states’ proposed alternative would still result in extensive cost-shifting to the public and to those who can least afford the high costs of heath care.)
Randy’s post appears to concede that section 5000A is, as Congress found, necessary to effectuate the CR and GI provisions—or at least that Congress could reasonably have so found: “Indeed,” he writes, “our severability analysis hinges on Congress’s finding that the mandate was ‘essential’ to its scheme of regulating insurance companies.” But as his post goes on to explain, his brief in fact takes issue with whether section 5000A is "necessary" to carry out the principal provisions of the Act. "Unlike in Raich," his post argues, "those who fail to purchase health insurance in no way obstruct the ability of Congress to enforce its regulations on insurance companies.” That is to say, the private respondents argue that the Community Rating and Guaranteed Issue provisions are fully effective standing alone, and thus section 5000A can’t be necessary, let alone proper, for carrying them into execution. “Instead,” Randy argues, “Congress wants to ameliorate the negative consequences of successfully executing its insurance company regulations by forcing these citizens to compensate the insurance companies for the cost of the regulation by transferring their wealth to these companies.” And this is beyond Congress’s Necessary and Proper authority, according to the brief (p.41), because (quoting the Eleventh Circuit) “Congress is limited to ‘remov[ing] … obstacle[s]’ to ‘the execution of [its] regulations,’ as opposed ‘to counteract[ing] the significant regulatory costs … from [its] fully executed reforms.’”
There are at least two major problems with this argument. For one thing, those without health insurance will, in any meaningful sense, be an obstacle to the successful execution of the Community Rating and Guaranteed Issue provisions. Without section 5000A, those provisions simply will not do the work they were designed to do—as the experience of the states demonstrated—because many people will only purchase insurance, subject to the CR and GI rules, when they develop expensive health care needs, not before. And the vast majority of the currently uninsured will then either pay for their extensive health care using the insurance they purchased just before incurring the costs of such care—which will lead to skyrocketing insurance rates, which will in turn make the provision of such insurance untenable for insurance companies, thereby defeating the purposes of the Act—or will not be able to pay for the services at all, in which case the costs of the unpaid-for health care itself would be spread over the rest of the population, driving up the costs of such care once again.
More fundamentally, and regardless of whether one characterizes the conduct of the uninsured described above as an “obstacle” to Congress’s other, constitutionally legitimate regulations, Randy’s claim that Congress is limited to “removing obstacles” to the execution of its legitimate regulations, and may not “counteract” the significant regulatory costs, or externalities, of those regulations, just can’t be squared with the history of the Court’s necessary and proper jurisprudence. To be sure, removing such obstacles is one type of necessary and proper legislation—but it’s not the only kind. In the canonical Necessary & Proper case, for instance—M’Culloch v. Maryland—Congress incorporated the Bank of the United States not so much to “remove obstacles” to execution of Congress’s other laws, but in order to make much more efficient the federal government’s own spending, borrowing and taxing practices.
Nor does Congress act outside its Necessary and Proper authority when it “counteracts” significant regulatory costs created by its other, “fully executed reforms.” Indeed, that’s exactly what Congress did in the civil incarceration statute the Court recently upheld in Comstock. There, the federal government’s own release of dangerous former federal prisoners without necessary ties to particular states was not an obstacle to implementation of Congress’s penal laws and prison system; it was, instead, an unfortunate by-product of those other article I regulations—a “significant regulatory cost” of Congress’s exercise of its powers, as Randy might put it—and one that the Court concluded Congress had the power to address, even though the means Congress chose for addressing it imposed a much more significant burden upon the liberty interests of the regulated parties than in this case, namely, the indefinite loss of their freedom. As the Solicitor General notes at page 21 of his Reply, "[t]hat the federal civil-commitment statute was necessary in part to mitigate the effects of [the federal government] housing prisoners far from home counted as a factor in favor of its constitutionality, . . . not a strike against it." The concurrences of Justices Alito and Kennedy shared this understanding of Congress’s Necessary and Proper authority. See 130 S. Ct. at 1970 (Alito, J., concurring in the judgment) (“It is necessary and proper for Congress to provide for the civil commitment of dangerous federal prisoners who would otherwise escape civil commitment as a result of federal imprisonment.”); id. at 1968 (Kennedy, J., concurring in the judgment) (“Having acted within its constitutional authority to detain the person, the National Government can acknowledge a duty to ensure that an abrupt end to the detention does not prejudice the States and their citizens.”). See also, e.g., United States v. Hall, 98 U.S. 343, 351 (1879) (Necessary and Proper Clause grants Congress the power, in furtherance of its Article I war powers, to award “pensions to the wounded and disabled” soldiers of the armed forces and their dependents).
As Justice Scalia quite straightforwardly explained in his Raich concurrence, “Congress may regulate even those intrastate activities that do not themselves substantially affect interstate commerce” where “necessary to make a regulation of interstate commerce effective.” 545 U.S. at 35. Congress is not powerless to act just because the regulated entities (arguably) do not themselves act in a way that undercuts the legitimate regulatory scheme; it is sufficient that Congress's failure to regulate those entities would undercut that scheme. Id. at 38 (“As Lopez itself states, and the Court affirms today, Congress may regulate noneconomic intrastate activities only where the failure to do so ‘could ... undercut’ its regulation of interstate commerce.") (emphasis added). Surely section 5000A is, as Congress found, necessary—indeed, in Congress’s view, “essential”—to make effective Congress’s Guaranteed Issue and Community Rating provisions, as well as the laws guaranteeing the provision of the most costly health-care services without regard to the patient’s ability to pay.
In their briefs, both the individual and the state respondents insinuate that this logic would afford Congress a sort of “bootstrapping” power, in that it would invite Congress to create a comprehensive scheme of admittedly legitimate Commerce regulations (such as the Guaranteed Issue and Community Rating provisions, and the law requiring provision of emergency care without regard to ability to pay) as a subterfuge of sorts, in order to establish the justification for enacting laws that Congress would not otherwise have the power to enact. This is the way the state respondents put it (pp. 35, 49): “The Constitution authorizes Congress to “carry into Execution” its enumerated powers, not to expand its enumerated powers by creating problems in need of extraconstitutional solutions. . . . Congress can hardly expand its constitutional authority by creating problems that it lacks the power to fix.”
This suggestion is misplaced for two reasons. First, as explained above, even standing alone section 5000A would not be an “extraconstitutional” enactment, since it is a Commerce Clause regulation of the manner in which persons who consume a commercial product—health care services—will pay for that product. But even if section 5000A could not be justified on a stand-alone Commerce Clause basis, its Necessary & Proper justification is sound, and it is implausible to characterize it as pretextual or “evasive.” See, e.g., Raich, 545 U.S. at 25 n.34 (“there is no suggestion that the CSA constitutes the type of ‘evasive’ legislation the dissent fears, nor could such an argument plausibly be made”). To suggest that Congress enacted the Guaranteed Issue and Community Rating provisions simply in order to provide a justification for section 5000A gets things exactly backwards. We did not have a decades-long, contentious national debate about whether to impose a requirement that individuals maintain health insurance. That great debate, and the ACA that Congress enacted, were centrally about how to ensure that all individuals could afford health care and, in particular, how to create a private, market-based insurance mechanism to achieve that objective, one that (like employer plans and Medicare) does not discriminate against individuals based on their medical conditions or history. As such, the Community Rating and Guaranteed Issue provisions are indeed the central, primary provisions of the Act—as they are in the laws several states have enacted in attempts to accomplish those same ends. What the experience of those states demonstrated, however, particularly in contrast with the Massachusetts experience, is that those core provisions could not work—indeed, they would be counterproductive to the ends the legislature intended—if not accompanied by a requirement to maintain insurance before one develops exorbitantly expensive health care needs. To suggest that Congress enacted the Community Rating and Guaranteed Issue provisions in order to “expand its constitutional authority” to enact section 5000A is therefore a basic cart-before-horse error, a fundamental misunderstanding of the ACA and its history—akin to the suggestion that Congress enacted the underlying criminal laws in Comstock, and incarcerated felons for decades on end, simply in order to provide a justification for a federal civil commitment regime that it otherwise would not have had the article I authority to enact.
b. "Proper." The private respondents' brief also argues that the particular means Congress chose of making effective the core provisions of the ACA are not "proper," relying principally on an analogy to Printz, in which the Court held that a provision of the Brady Act requiring state and local officials to do background checks on prospective firearms purchasers was an impermissible federal “commandeering” of the states, even if it would otherwise have been within Congress’s commerce and necessary and proper authorities.
The analogy to Printz commandeering, however, is strained at best. The problem the Court saw in Printz was that it is not within the ordinary power of one sovereign to direct other sovereigns about how they are to govern their citizens: “It is an essential attribute of the States' retained sovereignty that they remain independent and autonomous within their proper sphere of authority.” 521 U.S. at 928. There is, of course, no such background principle that renders it suspect for a sovereign to direct, or commandeer, its own nationals. That happens every day—it’s the basic characteristic of the majority of federal laws, including those provisions of the Brady Act, unchallenged in Printz or any other case, in which the Congress imposed duties upon individuals rather than upon States. Indeed, this very distinction was the historical linchpin of the Court's anti-commandeering cases—namely, that “[i]n the end, the [Constitutional] Convention opted for a Constitution in which Congress would exercise its legislative authority directly over individuals rather than over States.” New York v. United States, 505 U.S. at 166; accord Printz, 521 U.S. at 920.
Citing Justice Kennedy’s admonition that “[i]t is of fundamental importance to consider whether essential attributes of state sovereignty are compromised by the assertion of federal power under the Necessary and Proper Clause,” Comstock, 130 S. Ct. at 1967–68, the Respondent States argue (p.38) that section 5550A is not “proper” legislation because it “usurps the States’ police power to protect the health and liberty of their residents.” (The private respondents offer a variant of this argument about state prerogatives at pages 58-60 of their brief.) That argument proves far too much. If Congress were precluded from acting so as to protect the health and liberty of its citizens in any manner that overlaps with the States’ police power to do the same, it is not only section 5550A that would be constitutionally suspect, but all of the ACA, as well—indeed, virtually all federal health care legislation, not to mention food and drug laws, OSHA, and much else of the modern administrative state. Nor, presumably, would Congress be able to enact a "single-payer" statute to address the health-care crisis, since that would even more comprehensively preempt the way in which the states variously choose to address the problem.
In support of this argument the states cite a passage in Gibbons v. Ogden in which the Court recognized that “health laws of every description” are among “that immense mass of legislation … which can be most advantageously exercised by the States themselves.” 22 U.S. at 203. But as Chief Justice Marshall explained in the very next paragraphs—in direct response to the argument that a congressional statute was invalid because it regulated conduct subject to the state’s police power—the fact that such matters “remain subject to State legislation” does not mean that Congress is precluded from acting upon them “for national purposes, . . . where the power is expressly given for a special purpose or is clearly incidental to some power which is expressly given. It is obvious that the government of the Union, in the exercise of its express powers—that, for example, of regulating commerce with foreign nations and among the States—may use means that may also be employed by a State in the exercise of its acknowledged powers—that, for example, of regulating commerce within the State. . . . All experience shows that the same measures, or measures scarcely distinguishable from each other, may flow from distinct powers, but this does not prove that the powers themselves are identical.” Nor does it prove that Congress “is exercising, or has a right to exercise, the powers of the other.” Id. at 203-05. (It is also worth noting, with respect to Congress's solicitude for the States' role in the ACA, that beginning in 2017 States can opt out of the minimum coverage provision if they establish an alternative means of affordably providing comprehensive coverage to a comparable number of residents. See 42 U.S.C. 18052.)
A few words on four other themes that run throughout the respondents’ briefs:
a. As-Applied and Facial Challenges
Randy’s post offers a further basis for distinguishing this case from Raich, Wickard, Heart of Atlanta Motel, etc. As Randy notes, Raich was an “as applied” Commerce Clause challenge: The parties, and all of the Justices, agreed that the federal prohibitions on marijuana possession and manufacture were facially valid; thus, the only question at issue in Raich, as in the Wickard line of cases, was whether the law could constitutionally be applied to an identified subset of those possessing marijuana, a subset that was far less likely than other drug users to implicate the interests addressed by the Controlled Substances Act. The Court held that as long as the statute was facially constitutional, Congress could reasonably draw the regulatory line so as to cover the relevant subclass.
Randy argues that because his lawsuit challenging section 5000A of the ACA is a facial challenge, it is not governed by decisions such as Raich and Wickard. (The respondent States make a similar argument on page 40 of their brief.) This gets it exactly backward. It is more difficult, not less, to raise a successful facial challenge to Congress’s Commerce Clause authority to enact a given statute. A facial challenge to the possession ban in Raich, for example, would have been rejected out of hand, because (as both the majority and Justice Scalia explained) that ban is, without question, necessary and proper to carry out another provision of the CSA, namely, the ban on interstate sales of Category I narcotics. The question that gave some of the Justices (including Justice Scalia) pause was whether it was necessary and proper to apply the possession ban even to persons who were consuming home-grown marijuana in conformity with California law. A similar question would have been raised in the health-care case if Randy and his co-counsel were bringing an as-applied challenge on behalf of a category of uninsured plaintiffs who were unlikely to consume health care, or about whom it could be said with confidence that they would pay from their own pockets for the health care they consume. Such an as-applied challenge likely would be unsuccessful under Raich, Wickard, et al., even if such a subclass could be identified in advance (which it cannot). But whatever the fate of such a challenge, there’s much less of a constitutional question regarding the facial validity of section 5000A, since that provision obviously does apply to many, many individuals who will consume health care either at the state’s expense, or with the use of insurance that they purchase only after they fall ill.
The respondent States argue that section 5550A blurs the federal government’s “accountability” by “cloaking the burden on individuals in terms that avoid the politically unpopular nomenclature of new taxes” (p.31 of their brief). Similarly, Randy’s brief accuses the government of being unwilling to “openly defend” section 5550A’s “subsidization rationale.” But there are no hidden balls here. It is hardly a state secret that one virtue of section 5550A is that it will guarantee that all health insurance plans include a representative cross-section of enrollees, so that the plans are not disproportionately joined by those with acute medical needs—just as is the case with employer plans and Medicare. As with all insurance plans, some participants will ultimately pay more than the value of the goods and services they consume, and others will consume more than they have subsidized. (And there’s no way of telling in advance who will be in which category. This expansion of the risk pool is a feature, not a bug, and it’s one Congress openly acknowledged in the findings section of ACA itself, which asserts that section 5550A would not only “minimize th[e] adverse selection” that occurs when individuals wait to purchase insurance when they are in acute need of expensive health care, but would also “broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums.” 42 U.S.C. 18091(a)(2)(I). Nor has this aspect of the legislation been under the radar. Indeed, it is the feature of the ACA that has engendered the most controversy and resistance. And there is no doubt whatsoever in the public’s mind who is responsible for it: the President and the Congress that enacted the ACA.
c. Plenary Police Power
The respondent States assert in their brief (pp. 36-37) that section 5550A “amounts to an exercise of the very police power that the Constitution reserves to the States and withholds from Congress,” and that sustaining its constitutionality would “obliterate any meaningful boundaries on Congress’ limited and enumerated powers.” See also id. at 28 (arguing that the government’s rationale “could ‘be applied equally as well to family law and other areas of traditional state regulation since the aggregate effect of [decisions relating to] marriage, divorce, and childrearing on the national economy is undoubtedly significant’” (quoting Morrison, 529 U.S. at 615-16)).
That is not so. Nothing about the rationales on which the government is relying would establish a federal police power. The government is not arguing that Congress can regulate any and all activities merely because they are “related to the economic productivity of individual citizens,” Lopez, 514 U.S. at 564, or because they have aggregate effects upon the national economy; and therefore its rationales would not authorize direct federal regulation of violent criminal conduct, family law subjects (including marriage, divorce, and child custody), and local education, id. Accepting the government’s arguments would not, in particular, affect the outcomes in Lopez and Morrison. Nor would the government’s principal rationales authorize even a more limited power to require purchase of any and every product or service. The governments’ arguments, described above, are focused upon the regulation of the manner in which persons will pay for particular commercial services (health care) that they will invariably use—a commercial activity about which they have no real choice. The regulation, in other words, is of actors in the commercial sphere, and the “compelled purchase” is merely a regulation of how they will pay for the services they will use—the most costly of which they would be legally entitled to consume even if they had no ability to pay. A decision limited to such circumstances would not have remotely the “unlimited” ramifications respondents fear. (Indeed, the Court could even issue a ruling of more limited scope still, by relying in part on the fact that section 5550A is necessary and proper to carry into execution the Community Rating and Guaranteed Issue provisions.)
Finally, in his brief (p.57), Randy attempts to distinguish section 5550A from the statutes upheld in M’Culloch, Raich and Comstock on the ground that the method of regulation that Congress chose here—a compelled purchase of a commercial product—is a novel federal solution, rather than one that is well-established. Likewise, in the very first paragraph of their brief, the respondent States sound a theme repeated throughout their brief: “If Congress really had this remarkable authority, it would not have waited 220 years to exercise it.”
It is not surprising, however, let alone constitutionally suspect, that Congress “waited 220 years” to adopt such legislation. After all, the states—which undoubtedly have the power to do so—waited 210 years (plus their pre-constitutional history) to do so. As the SG notes in his reply brief (p.16), this “novelty” on the part of state and federal governments alike reflects a fairly recent impetus—one promoted in the first instance by Republican officials and conservative organizations—to move from New-Deal-like “tax and spend” solutions towards market-based solutions that are “more protective of individual choice, market efficiency, and state prerogatives than traditional approaches like Medicare.” There is nothing insidious, or constitutionally troubling, about such an innovation in the manner by which legislatures attempt to deal with serious problems in the commercial sphere. As Mitt Romney editorialized in July 2009, such innovation was appropriate for the national health care crisis, just as it was in Massachusetts:
There's a better way. And the lessons we learned in Massachusetts could help Washington find it.
No other state has made as much progress in covering their uninsured as Massachusetts. The bill that made it happen wasn't a rush job. Shortly after becoming governor, I worked in a bipartisan fashion with Democrats to insure all our citizens. It took almost two years to find a solution. When we did, it passed the 200-member legislature with only two dissenting votes. It had the support of the business community, the hospital sector and insurers. For health care reform to succeed in Washington, the president must finally do what he promised during the campaign: Work with Republicans as well as Democrats.
Massachusetts also proved that you don't need government insurance. Our citizens purchase private, free-market medical insurance. There is no "public option." With more than 1,300 health insurance companies, a federal government insurance company isn't necessary. It would inevitably lead to massive taxpayer subsidies, to lobbyist-inspired coverage mandates and to the liberals' dream: a European-style single-payer system. To find common ground with skeptical Republicans and conservative Democrats, the president will have to jettison left-wing ideology for practicality and dump the public option.
Our experience also demonstrates that getting every citizen insured doesn't have to break the bank. First, we established incentives for those who were uninsured to buy insurance. Using tax penalties, as we did, or tax credits, as others have proposed, encourages "free riders" to take responsibility for themselves rather than pass their medical costs on to others. This doesn't cost the government a single dollar.
More fundamentally, if novelty were itself constitutionally suspect, the vast majority of the Court’s jurisprudence concerning Congress’s article I powers would be radically different. The SG puts the point well in his reply brief (p. 17 & note 6), with some of the many citations that might be offered to show that the Court’s federalism canon is virtually defined by cases in which Congress broke with its past practices, and in which the Court rebuffed claims that the absence of historical precedents was proof of the absence of an article I power:
With negligible exceptions, Congress did not exercise its power to regulate commerce prior to its enactment in 1887 of the Interstate Commerce Act.” Polish Nat’l Alliance v. NLRB, 322 U.S. 643, 647 (1944). “Then, in respone to rapid industrial development and an increasingly interdependent national economy, Congress ‘ushered in a new era of federal regulation under the commerce power.’” Raich, 545 U.S. at 16 (quoting Lopez, 514 U.S. at 554). For that reason, nearly all exercises of the commerce power could have been condemned as impermissibly “novel” under respondents’ argument. Indeed, “in almost every instance of the exercise of the [commerce] power” during the modern era, “differences [were] asserted from previous exercises of it and made a ground of attack.” Hoke & Economides v. United States, 227 U.S. 308, 320 (1913). [FN: See, e.g., Pet. Br. at 5, Perez v. United States, 402 U.S. 146 (1971) (No. 70-600) (“unprecedented exercise of power”); Supp. Appellees’ Br. at 40, Katzenbach v. McClung, 379 U.S. 294 (1964) (No. 64-543) (“novel assertion of federal power”); Appellee’s Br. at 6, Wickard, supra (No. 41-59) (“complete departure”); Appellee’s Br. at 67, Darby, supra (No. 40-82) (“unprecedented theory of Federal power”); Jones & Laughlin Steel Corp., 301 U.S. at 99 (McReynolds, J., dissenting) (“unprecedented”).] But the Court has not invalidated laws simply because Congress chose to address a worsening national economic problem with new regulatory tools that Congress concluded were well adapted to addressing it.
The leading cases that Randy tries to distinguish are not to the contrary. Indeed, they demonstrate why the “novelty” argument has so little to commend it.
— It is true that the Court in M’Culloch upheld the Second National Bank because incorporation was what Marshall called a “usual” means for carrying into execution “the great powers vested in government.” But what the Chief Justice was referring to there was the “usual means” that other governments, including state governments, had traditionally used to address such problems: Of course, incorporation of a bank was hardly a “usual” tool for Congress—it was a striking innovation, which is why the First National Bank had engendered such pronounced constitutional debate in the years before the Court decided M’Culloch—with no less than Madison, Jefferson and Edmund Randolph (President Washington's Attorney General) strongly of the view that it was not supported by Congress's article I powers.
— Likewise, Randy is correct to note the Court’s observance in Raich that possession bans are “commonly utilized means of regulating commerce in [a] product.” 545 U.S. at 26. But until very recently, it was not commonplace at all for Congress to enact contraband statutes—such prohibitions had long been the province of the states. It is telling that the examples the Raich Court offered in support of its assertion—federal bans on the possession of bald and golden eagle parts, biological weapons, nuclear material, certain plastic explosives, and contraband cigarettes—are all of relatively recent vintage, having first been enacted well into the Nation’s second century. If those contraband statutes had been challenged at their outset, would the Court have declared them invalid because Congress had adopted a novel means of regulation, one previously relegated to the states? The question answers itself.
— Finally, it is also true that the Court in Comstock emphasized that the civil commitment provision there was “a modest addition to a longstanding federal statutory framework [governing the delivery of mental health care to federal prisoners federal prisoners], which has been in place since 1855.” 130 S. Ct. at 1961. But as the Court itself explained, for the first century of that tradition, Congress’s system was limited to individuals while they served their federal criminal sentences. It was not until 1949 that Congress did something that raised the sort of constitutional question at issue in Comstock—namely, to authorize the postsentence detention of federal prisoners who suffer from a mental illness and who are thereby dangerous. Did the Comstock Court uphold this authority only because it was not challenged for sixty years? If the challenge had been brought at the outset, would the Court—should the Court?—have declared the law unconstitutional on the ground that “If Congress really had this remarkable authority, it would not have waited 160 years to exercise it”?