The Supreme Court and Obamacare

The Supreme Court and Obamacare
by Laurence M. Vance, October 11, 2011

The new term of the Supreme Court has just begun. All eyes are on the court, as it is expected to hear for the first time a case against Obamacare.

The Patient Protection and Affordable Care Act (PPACA), more popularly known as Obamacare, passed the Senate on Christmas Eve of 2009, passed the House on March 21, 2010, and was signed into law by President Obama on March 23, 2010. It was one of the most controversial and partisan pieces of legislation in history, with no Republican in either house of Congress voting in favor of the 2407-page bill (H.R. 3590 [PDF ]).

The onerous provisions of the PPACA include an expansion of Medicaid eligibility, the prohibition of annual and lifetime coverage caps, the elimination of co-payments and deductibles for selected health-insurance benefits, guaranteed issue of insurance policies without regard to preexisting conditions, federal subsidies for the purchase of health insurance, employer mandates, more arcane insurance regulations, an increase in the Medicare tax on the "rich," and a tax on indoor tanning services. Perhaps the most egregious part of Obamacare is the "individual mandate" that every American not covered by Medicaid, Medicare, or health insurance must purchase health insurance or pay a penalty.

Within hours of the passage of Obamacare, the attorney general of Florida, Bill McCollum, and the attorneys general of twelve other states (Alabama, Colorado, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, and Washington), filed suit in the U.S. District Court for the Northern District of Florida against the U.S. Departments of Health and Human Services, Treasury, and Labor, and their respective department secretaries, Kathleen Sebelius, Timothy Geithner, and Hilda L. Solis, challenging the constitutionality of the individual mandate.

The lawsuit was later joined by the attorneys general of thirteen other states (Alaska, Arizona, Georgia, Indiana, Iowa, Kansas, Maine, Mississippi, Nevada, North Dakota, Ohio, Wisconsin, and Wyoming), the National Federation of Independent Business, and two individuals, Mary Brown and Kaj Ahlburg.

On January 31, 2011, Judge Roger Vinson of the U.S. District Court in Pensacola struck down the Obamacare mandate, declaring, "The individual mandate is outside Congress' Commerce Clause power, and it cannot be otherwise authorized by an assertion of power under the Necessary and Proper Clause. It is not Constitutional" (PDF ). He said further,

The defendants' argument that people without health insurance are actively engaged in interstate commerce based on the purported "unique" features of the much broader health care market is neither factually convincing nor legally supportable.

Because I find both the "uniqueness" and "economic decision" arguments unpersuasive, I conclude that the individual mandate seeks to regulate economic inactivity, which is the very opposite of economic activity. And because activity is required under the Commerce Clause, the individual mandate exceeds Congress' commerce power, as it is understood, defined, and applied in the existing Supreme Court case law.

And because Judge Vinson reasoned that "the Constitutionality of the individual mandate is the crux of this entire case," and "because the individual mandate is unconstitutional and not severable," he also ruled that "the entire Act must be declared void."

The judge then ruled on March 3 that he would honor the Obama administration's request that his ruling be stayed while the United States Court of Appeals for the Eleventh Circuit, in Atlanta, reviewed the case. He also expressed interest in the Supreme Court hearing the case because "the sooner this issue is finally decided by the Supreme Court, the better off the entire nation will be."

After an official appeal by the government on March 8, the Atlanta appellate court, by a 2–1 vote on August 12, affirmed the judgment of Judge Vinson in a 207-page opinion that the individual mandate was unconstitutional, but rejected his argument that the mandate was not severable from the rest of the PPACA, thus rendering the rest of Obamacare "legally operative" (PDF ).

On September 28, the state plaintiffs (PDF ), the National Federation of Independent Business (PDF ), and the Obama administration (PDF ) each filed a cert petition asking the Supreme Court to hear the case. The Obama administration also issued a statement through Stephanie Cutter, assistant to the president and deputy senior advisor, affirming the constitutionality of the PPACA and expressing confidence that the Supreme Court will agree.

But Florida et al. v. Department of Health and Human Services et al. is not the only lawsuit against Obamacare. Since the PPACA was passed, there have been twenty-five other court challenges to the new health care law.

Besides the Florida case, there are two other cases where the individual mandate of Obamacare was declared unconstitutional. In Virginia v. Sebelius, the U.S. District Court for the Eastern District of Virginia struck down the individual-mandate provision of the law on December 13, 2010. Said Judge Henry Hudson, "Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market."

But the government appealed the decision in the 4th circuit court of appeals, in Richmond, which ruled unanimously on September 8, 2011, that the district-court judgment be vacated and the case remanded back to that court to be dismissed "for lack of subject-matter jurisdiction," because the plaintiff lacks standing.

In Goudy-Bachman v. Department of Health and Human Services, the U.S. District Court for the Middle District of Pennsylvania ruled on September 13, 2011, that the individual mandate is unconstitutional. Judge Christopher Connor wrote that allowing the individual mandate to stand "would effectively sanction Congress's exercise of police power under the auspices of the Commerce Clause, jeopardizing the integrity of our dual sovereignty structure."

In six other cases, the constitutionality of Obamacare was upheld. Three of them were also heard at the appeals court level. In Liberty University v. Geithner, the U.S. District Court for the Western District of Virginia dismissed the case on November 30, 2010. On appeal, the fourth circuit court of appeals, by a vote of 2–1 on September 8, 2011, vacated the judgment of the district court and remanded the case back to that court to be dismissed "for lack of subject-matter jurisdiction" because the individual mandate is a tax that cannot be challenged in court until it is collected, which will not be until 2014.

In Thomas More Law Center v. Obama, the U.S. District Court for the Eastern District of Michigan dismissed the case on October 7, 2010. On appeal, the sixth circuit court of appeals ruled, by a vote of 2–1 on June 29, 2011, that Congress has a "rational basis" to impose the individual mandate, and the court upheld the constitutionality of the PPACA.

In Seven-Sky & American Center for Law and Justice v. Holder, the U.S. District Court for the District of Columbia dismissed the case on February 22, 2011.

The decision of the D.C. circuit court of appeals is pending.

Nine other cases were dismissed by district courts for lack of standing or procedural problems. One of these cases, New Jersey Physicians v. Obama, was also heard by the third circuit court of appeals, which upheld the district court ruling. Two of the nine cases, Baldwin & Pacific Justice Institute v. Sebelius and Kinder v. Geithner, are pending at the appeals-court level.

Eight cases are still pending at the district-court level.

All these cases basically come down to the question of the "individual mandate" versus the "commerce clause." In general, liberal judges appointed by Democratic presidents view the mandate as constitutional, while conservative judges appointed by Republican presidents view the mandate as unconstitutional. Both groups err, but in different respects.

The commerce clause is the most abused part of the Constitution. It has been used by the federal government to increase its power over the states and their citizens and to decrease the power of the states and their citizens. It has been used to force farmers to destroy crops and pay a fine for growing "too much" wheat (Wickard v. Filburn). It has also been used to criminalize marijuana for medical use even where states approve its use (Gonzales v. Raich). All the commerce clause says is that Congress has the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

During the health-care debates back in 2009, then-Speaker of the House Nancy Pelosi was asked by CNS News where the Constitution authorizes Congress to order Americans to purchase health insurance. Her response was simply, "Are you serious? Are you serious?" She answered no further, and took another question. Her press secretary then said that asking Pelosi where the Constitution authorized Congress to mandate that individual Americans buy health insurance was not a "serious question."

Pelosi's office has issued a statement on the " Constitutionality of Health Insurance Reform" in which she does answer the question:
The Constitution gives Congress broad power to regulate activities that have an effect on interstate commerce. Congress has used this authority to regulate many aspects of American life, from labor relations to education to health care to agricultural production. Since virtually every aspect of the health care system has an effect on interstate commerce, the power of Congress to regulate health care is essentially unlimited.
In the early history of the American republic, as Judge Vinson points out in his decision striking down Obamacare, "The word 'commerce' was understood to encompass trade, and the intercourse, traffic, or exchange of goods; in short, 'the activities of buying and selling that come after production and before the goods come to rest'" (PDF ). Not manufacturing, not mining, not agriculture, not insurance, not medical care.

Nowhere, as Judge Vinson further points out, "in Madison's notes on the Constitutional Convention and in The Federalist" is the term "commerce" "ever used to refer unambiguously to activity beyond trade or exchange." Any member of the federal judiciary should be familiar with this.

Obamacare is unconstitutional because health care and health insurance are not commerce, are not interstate commerce, and are not relevant to the commerce clause.

According to Madison -- the father of the Constitution -- the commerce clause

grew out of the abuse of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government.

Nevertheless, the Supreme Court, as Judge Vinson summarized from U.S. v. Lopez (1995), has "identified three broad categories of activity that Congress may regulate under its commerce power":

First, Congress may regulate the use of the channels of interstate commerce. Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities. Finally, Congress' commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, i.e., those activities that substantially affect interstate commerce.

But even under the widest possible interpretation of the commerce clause, the individual mandate is still unconstitutional. In the PPACA, Congress has assumed the power to create commerce by forcing individuals to purchase health insurance and to regulate inactivity by penalizing individuals for not doing so. Obamacare moves the country closer to a single-payer system; that is, socialized medicine, something that Democrats in Congress have sought to institute since the presidency of Harry Truman.

When the Supreme Court decides to rule on the constitutionality of Obamacare, it will have to decide two questions: whether the individual mandate is constitutional, and whether it is severable from the rest of the health care law.

There is something far more important, however, that the Supreme Court will not be deciding: whether Congress has the authority to legislate concerning health care in the first place.

Nancy Pelosi's aforementioned " Constitutionality of Health Insurance Reform" says

Reform opponents continue to spread myths about components of America's Affordable Health Choices Act, including the nonsensical claim that the federal government has no constitutionally valid role in reforming our health care system ­ apparently ignoring the validity of Medicare and other popular federal health reforms.

The federal judges who found the individual mandate unconstitutional actually agree with Pelosi on this point. Here is Judge Vinson in his original decision that declared Obamacare unconstitutional:

For the reasons stated, I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one sixth of the national economy, and without doubt Congress has the power to reform and regulate this market. That has not been disputed in this case. The principal dispute has been about how Congress chose to exercise that power here. (PDF )

And here are Judges Joel Dubina and Frank Hull of the 11th circuit court of appeals in Atlanta, stating that although the individual mandate is unconstitutional, Congress still has broad power to legislate concerning health care:

We conclude that the individual mandate contained in the Act exceeds Congress's enumerated commerce power. This conclusion is limited in scope. The power that Congress has wielded via the Commerce Clause for the life of this country remains undiminished. Congress may regulate commercial actors. It may forbid certain commercial activity. It may enact hundreds of new laws and federally-funded programs, as it has elected to do in this massive 975-page Act. But what Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die. (PDF )

As demonstrated at length throughout our opinion, Congress has broad power to deal with the problems of the uninsured, and it wielded that power pervasively in this comprehensive and sweeping Act. As to the individual mandate provision, however, Congress exceeded its enumerated commerce power.

Because the belief that government should intervene in some way into health care is so pervasive and systemic, the question of whether Congress has the authority to legislate concerning health care was not and will not be considered by any federal court. And that is unfortunate, because strict constitutionalists recognize that the Constitution nowhere authorizes the federal government to have anything to do with health care or health insurance.

The Constitution nowhere authorizes the federal government to provide a health-care safety net, a prescription drug plan, vaccinations, medical treatment, or health insurance subsidies.

The Constitution nowhere authorizes the federal government to ensure that everyone has access to affordable health care or insurance, to eliminate co-payments and deductibles, or to guarantee issue of insurance policies without regard to preexisting conditions.

The Constitution nowhere authorizes the federal government to fund clinical trials, laboratories, community health centers, medical research, or family planning.

The Constitution nowhere authorizes the federal government to mandate medical licensing or force hospitals to treat anyone regardless of their ability to pay.

The Constitution nowhere authorizes the federal government to have programs like Medicare, Medicaid, SCHIP, or HIV/AIDS prevention initiatives.

The Constitution nowhere authorizes the federal government to have agencies like the National Institutes of Health, the FDA, or the Department of Health and Human Services.

The Constitution nowhere authorizes the federal government to regulate hospitals, nursing homes, the health-insurance industry, pharmaceutical companies, organ sales or donations, medical devices, medical schools, physicians, dentists, nurses, midwives, psychiatrists, psychologists, pharmacists, or practitioners of holistic, chiropractic, homeopathic, nutritional, or other forms of alternative medicine.

Libertarians, of course, also recognize that not only are these things unconstitutional, they are beyond the purpose and scope of a government limited to the protection of life, liberty, and property.

The Supreme Court may overturn the individual mandate or the whole of Obamacare, but neither of those actions will restore a free market in health care.

http://www.fff.org/comment/com1110i.asp