Dean and Distinguished Professor of Law,
University of California, Irvine School of Law
Two hours of oral arguments on Tuesday about the constitutionality of the individual mandate leave little doubt of what everyone expected all along: the outcome almost surely depends on Justice Anthony Kennedy. Justice Kennedy asked tough questions of both sides that allow either to be optimistic or pessimistic.
At one point, Justice Kennedy asked Paul Clement, the attorney for the states challenging the law, why the individual mandate was beyond the scope of Congress's power since it clearly could create a national health care system, tax people to fund it, and exempt those with health insurance. Justice Sotomayor expressed this forcefully when she said to Clement: "Could we have an exemption? Could the government say everybody pays a shared health care responsibility payment to offset all the money that we're forced to spend on health care, we the government; but anybody who has an insurance policy is exempt from that tax? Could the government do that?"
I think that the answer is clear that Congress can do this. Congress surely could have raised taxes on everyone in an amount equal to the cost of health coverage and then paid the money to insurance companies to provide health insurance coverage for everyone. I do not think even the staunchest opponents of the law deny Congress's ability do this in the same way that it enacted a Social Security tax and created a Social Security program.
In other words, it is clear that Congress can charge all taxpayers money for health care coverage and then provide health coverage to everyone. If Congress created such a system, could it allow an exception for those who buy their own health insurance? There is no reason why not.
Isn't that exactly what Congress has done in the Affordable Care Act? The functional effect of the law is that almost everyone has to pay an amount to the Internal Revenue Service to provide for health care coverage, which everyone then receives, but people can have an exception to this if they purchase their own health insurance.
Imagine that the Social Security Act was amended to create an exception to Social Security taxes and payments for those who created their own retirement accounts. That certainly would not make the Social Security Act unconstitutional. The Affordable Care Act is no different from this.
I think that this is key in answering Professor Epstein's response to my earlier post. First, I should note that I disagree with Professor Epstein's premise that the original understanding of the Constitution with regard to the commerce power should be determinative. The framers could not have anticipated a country with 50 million people without health insurance or the enormous costs that imposes on the economy. It is now, and always has been, a living Constitution, not one confined to the original understandings of the framers.
Second, Professor Epstein's primary concern is that the effect of the individual mandate is a forced subsidy by those who otherwise would not purchase health insurance. He writes: "Yet that is one of the main functions of the mandate--to make sure that other individuals can free ride off the young and the healthy by forcing them to pay more for health care than it costs them to cover their own costs."
But I fail to see why the fact that the individual mandate is a subsidy matters at all in terms of its constitutionality. Countless federal programs, including mandatory ones like Social Security, function as subsidies. Nothing in the Constitution forbids Congress from using its commerce power or its taxing and spending power even if the effect is to effectuate a subsidy.
The constitutional question is whether the individual mandate falls within the scope of the commerce power or the taxing and spending power. For the reasons argued in my earlier post, it is a regulation of commerce because the individual mandate regulates economic activity which taken cumulatively has a substantial effect on commerce. Alternatively, it is in every way functionally a tax and fits within the scope of Congress's taxing and spending power.
After two days of oral arguments, I predict the Court will hold that the Anti-Injunction Act does not bar it from reaching the merits and that the Court will hold, 6-3 with Chief Justice Roberts writing for the majority, that the individual mandate is constitutional.