The individual mandate and the commerce clause challenge to the Affordable Care Act

Affordable Care Act

Legal Studies 101

Commerce Clause and the Affordable Care Act

The Affordable Care Act (ACA) of 2010 was signed into law on March 23, 2010 and a number of provisions have already gone into effect and still others are scheduled to be implemented over the next four years (Henry J. Kaiser Family Foundation sec. 2). Probably the most controversial provision is the requirement that Americans who chose not to purchase health insurance will be assessed an annual penalty for 'opting-out.' The so-called 'individual mandate' will be phased in over a period of three years, from 2014 to 2016, and individuals or families can 'purchase' the right to live without health insurance using a flat rate or percent income plan. The flat rate plan will increase over the three-year phase-in period and will eventually range from $695 to $2,085 per year. The percent income plan will increase from 1.0% in 2014 to 2.5% by 2016. Exemptions are provided for low-income individuals and families, Native Americans, undocumented immigrants, or anyone between jobs for less than three months.

The contention that the individual mandate wouldn't stir up considerable controversy, especially in a country that treasures individual freedoms, is simply dishonest (Tennant par. 1-3). President Obama's comparison of the individual mandate with state laws requiring drivers who license cars to purchase auto insurance seems reasonable on the surface, but a more detailed comparison can't withstand the scrutiny. Auto insurers can choose to refuse coverage to bad drivers or charge exorbitant rates, and no one is required to own and license an automobile. In contrast, all non-exempt citizens will be required to purchase qualified health coverage or pay a penalty. The option of not participating isn't available under ACA. For this reason, the ACA has been a lightning rod for lawsuits since the day it was signed.

It therefore should come as no surprise that close to 30 lawsuits have been filed in federal courts challenging the constitutionality of the ACA since its inception 19 months ago (Stolzfus and Hall 1). Although most have been dismissed for lack of 'standing', a legal term used to denote whether the court has sufficient jurisdiction to hear a case, a few have gained traction in lower federal courts by individuals who claim current harm or that the provision is invalid on its face. Such issues will likely be decided by the U.S. Supreme Court.

Federal Court Structure

Individual claims of harm or injury due to an unconstitutional law are typically filed in the nearest district federal court, of which there are 94 in the United States. A district judge may decide the plaintiff has no standing and dismiss the case on those grounds or for other reasons, otherwise a hearing will be held. If the plaintiff dislikes the outcome they can appeal the decision to the relevant circuit court, of which there are 12. Should the appeal process produce an unfavorable outcome for the plaintiff, they then have the option of appealing (writ of certiorari) the decision to U.S. Supreme Court. The Supreme Court then decides whether to hear the case, which rarely happens, so lower court decisions are usually final.

Commerce Clause

The ACA was enacted by Congress under the Commerce Clause (article I, section 8, clause 3) and the Necessary and Proper Clause (article I, section 8, clause 18) of the Constitution, thereby giving Congress the authority to impose the individual mandate on all non-exempt Americans (Huhn 140-141). If the individual mandate is declared unconstitutional because the Supreme Court decides the Commerce Clause is insufficient to give Congress such authority, then the primary 'funding' source for many of the other provisions in the ACA will disappear and the Act will fail.

From Congresses' point-of-view the Commerce Clause gives them the authority to impose a penalty for not purchasing qualified health insurance because any activities that have an impact on interstate commerce fall under their jurisdiction (Ittleman par. 2). No one questions that the health insurance industry qualifies as interstate commerce, but past court decisions have always given citizens a way to avoid falling under Congressional regulation in such matters.

In the landmark case Wickard v. Filburn, a farmer (Filburn) wanted to grow some wheat for his own consumption and believed it was none of the government's business (Ittelman par. 3). Congress and the courts disagreed, because if everyone decided to grow their own wheat it would have a dramatic impact on the wheat market nationally. A similar outcome occurred when a farmer felt Congress had no jurisdiction over his growing marijuana for personal use (Ittleman par. 4).

The main point of contention regarding the ACA individual mandate is that contrary to the wheat and marijuana markets, non-exempt citizens are required to participate by either buying health insurance or paying an opt-out fee in order to stabilize the health insurance market (Ittleman par. 6). In other words, in contrast to the farmers citizens can't choose not to participate. Several writ of certiorari are currently before the U.S. Supreme Court concerning this matter and it seems likely the justices will have to weigh in.

Summary

The onslaught of lawsuits challenging the constitutionality of the ACA represents resistance to increased government intrusion into their personal lives. Although most of the suits have been dismissed for lack of standing and other reasons, a few have made it all the way to the door of the highest court in the land. Whether the ACA continues in its present form will likely depend on how the U.S. Supreme Court interprets the Commerce Clause, although at least one alternative has been suggested to get around this particular challenge (Fisher par. 10).