Is a Mandate Constitutional?

Author | jack | Posted on | December 1, 2009 | 3 Comments

Is a federal mandate to purchase health insurance Constitutional? Ruth Marcus says it is.

Marcus’ argument rests on two powers given to Congress: the power to tax, and the power to regulate interstate commerce. Looking first at the Commerce Clause, which has been stretched beyond all recognition, she relies on the Wickard v. Filburn case, in which Mr. Filburn was a farmer who had an 11.1 acre allotment for growing wheat, but harvested twice that amount. The excess, he said, was for his own use, not for sale. In this case, it is clear that, had Filburn not grown that extra wheat to feed his livestock, he would have either purchased that wheat, or not sold his 11.1 acre allotment. Thus his growing that extra wheat did impact the market for wheat, and if a significant number of farmers had emulated his actions, the national wheat market would have been significantly impacted.

Now, let’s examine the situation Marcus describes:

Spending on health care consumes 16 percent — and growing — of gross domestic product. There is hardly an individual activity with greater effect on commerce than the consumption of health care.

If you arrive uninsured at an emergency room, that has ripple effects through the national economy — driving up costs and premiums for everyone. If you go without insurance, that limits the size of the pool of insured individuals and — assuming you are young and healthy — drives up premium costs.

16 percent? So what? The housing industry claims a similar percentage of GDP, and everyone needs a place to live, right? Doesn’t being homeless impact the economy, considering all the expenses that the government spends on the homeless? Why then, should we not require people to by housing insurance, so that, if they lose their jobs, their insurance will cover the costs? Would that not have saved our economy from this recent recession?

As for the emergency room scenario, the answer is, “No, it only impacts the broader economy if someone else is required to pay for my care.” The problem is that people are not required to pay for their own care. If you show up without insurance or the means to pay, the hospital is forced to treat you. Everyone needs to eat, too. If you show up at a grocery store with no money, are they forced to feed you? No. Everyone needs shelter, too. If you show up at a hotel with no money, are they forced to give you a room? No.

It is the government mandate that hospitals provide care that creates the artificial impact of the uninsured on our economy. The government creates the problem with one mandate, and will solve it with another?

Marcus’ second argument lies in Congress’ power to “lay and collect Taxes, Duties, Imposts and Excises”:

The individual mandate is to be administered through the tax code: On their forms, taxpayers will have to submit evidence of adequate insurance or, unless they qualify for a hardship exemption, pay a penalty.

Yale Law School professor Jack Balkin likens this to Congress raising money for environmental programs by taxing polluters. “Congress is entitled to raise revenues from persons whose actions specifically contribute to a social problem that Congress seeks to remedy through new government programs,” he concludes.

Balkin cites a 1950 Supreme Court case upholding a tax on marijuana distributors. “It is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed,” the court said. “The principle applies even though the revenue obtained is obviously negligible, or the revenue purpose of the tax may be secondary.”

Again, the government created the “problem” by imposing a mandate on hospitals to provide care for those who will not pay for it. Furthermore, the mandate does not impose a tax on an activity, but upon inactivity. Essentially, the idea is that the government can impose a penalty on you for not doing something the government wants you to do.

As noted earlier, the housing industry accounts for about the same percentage of GDP as the health care industry does. Everyone needs shelter. Thus, according to Marcus’ statist logic, the government can require you to buy a house when you leave school (and that house must be of a prescribed size and have the prescribed accommodations, of course), so long as the penalty for not doing so is in the tax code, not the criminal code.

Now, explain how it makes any difference whether the penalty is assessed through the tax code or the criminal code? There is none. Pay or go to jail.

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