I had a guest here this weekend who told me of one theory of why states might sue the federal government over portions of the Obama Healthcare Plan that requires individuals to buy insurance. The theory goes that the federal government is not authorized by any clause in the Constitution to force individuals to pay for healthcare. A plain and superficial reading of the Constitution would seem to support that. This leads to three questions:
- Is ObamaCare constitutional?
- If not, can it be made constitutional?
- Who is doing the suing and why?
First, a caveat: I am not a lawyer. All lawyers: please chime in.
Is ObamaCare Constitutional?
Next, some Constitutional basics. The way our form of government works, each and every law that Congress passes must find some authorizing basis from within the Constitution, because the 10th Amendment of the Constitution clearly states:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
In other words, Congress has to find a basis for the law from within the Constitution. For the better part of three centuries, however, Congress has largely been able to get around this restriction through what has become known as the Interstate Commerce Clause (Article I, §8 Cl. 3):
[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;
“Commerce among the several states” has been interpreted to mean, for instance, the ability of someone in New York to charge for access to its waterways. That was what Gibbons v. Ogden (22 US 1) in 1824. It’s largely the basis of how drug laws are authorized today by the federal government. Some people might say that this is a stretch of the clause, and that in fact requiring expenditures from individuals on health insurance would be even more of a stretch.
So what’s the logic in favor of the law? That has its basis in the theory of insurance. Here I will say that I am not an insurance expert, by the way. This much I know: a risk pool requires that everyone not make a claim at the same time, and the lower the likely percentage of claims over some period of time, the need for less money by the insurance companies to satisfy claims.
In the context of health care, if only old and sick people buy insurance, because they make up for the bulk of claims, the money required to pay out claims would require very high premiums, thus reducing any benefit to having insurance. On the other hand, if only healthy people bought into the system, since there would be very few claims, there would be no need for high premiums. Indeed, healthy people might not buy insurance at all, or very limited policies. In short, insurers can only sell health insurance to sick and old people if they have a group of otherwise healthy and young to reduce costs.
Does the decision of someone to not buy insurance in one state impact consumers in and companies in other states? If there exist risk pools that cross state boundaries, then the answer would appear to be yes. Otherwise it would seem the answer is no.
If ObamaCare is not constitutional, can it be made so?
Supposing the Supreme Court found mandatory premiums unconstitutional, what could the Congress and administration do to get around it? The tax system offers us one possibility. The 16th Amendment authorized Congress to tax us:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
One way the Congress could get around this would be to impose a tax that is the amount of a minimum premium, and then allow for a credit based on the costs expended on that premium. Loophole? Perhaps. But not the first.
Coming back to the Commerce Clause, the Congress probably could not have imposed a national speed limit without relying on highway funding. They probably could not themselves have prosecuted individuals for traveling over 55 or 65 mph. Instead they required the states to pass laws or face losing highway funding.
Who is doing the suing and why?
Ultimately if we look at the states that have filed suit, I’m sure we’ll see a distinctly Republican red tinge to them. For one thing, the strategy of Republicans has been to obstruct any Democrat initiative, no matter the harm that obstruction causes to individuals. Here, what possible benefit could individuals who are uninsured gain from not having health insurance? Today 45 million Americans don’t have a choice because they cannot take part in a well balanced risk pool, and hence cannot afford any coverage. Tomorrow even if they don’t have a choice on insurance, at least they’ll have some coverage.
In short, while considering the constitutional elements is interesting at an academic level, the officials doing the suing are harming the very people they are supposed to be serving. Perhaps voters should remember that.