Health reform unconstitutional? Get over it.

Once again, constitutional challenges to health reform have captured the attention of the daily newspapers.  A few months back, it was a couple of Bush I alumni rolling out the conservative/libertarian line in the Washington Post.  (Not everyone was convinced.)  This week, GOP opponents to health reform are sending smoke signals about a possible legal challenge to the health reform legislation now headed to conference committee in Congress.

While folks may differ on the policy questions before Congress, it seems clear that the legislation in its present form may not be derailed by a claim of unconstitutionality of the individual mandate.

The health insurance mandate contained in the health reform legislation would easily survive an attack based on the Commerce Clause of the U.S. Constitution.  Due to the limited powers granted by the States to the Federal government, Federal laws affecting economic activity may only be adopted if they regulate interstate commerce.  Such a challenge on health reform, then, would have to be based on the contention that the Federal government lacks the authority to regulate the delivery or financing of health care services because health care is neither “economic activity” nor an activity touching on interstate commerce.  Given the development of Commerce Clause jurisprudence in the U.S. Supreme Court, it is too late in the day to assert that health care services – even though they may be provided locally – do not involve interstate commerce.  To suggest that health care, a $2.4 trillion dollar a year sector of the U.S. economy, which brings goods and services crosstown and cross-country, involves only local commerce and/or “non-economic activity” strains credulity.

Next, the argument has been made that Congress cannot tax what it cannot otherwise regulate, with the corollary being that a financial penalty associated with a decision not to purchase health insurance may not be imposed.  While the basic proposition – that Congress may not tax what it cannot otherwise regulate – may have merit, the fact of the matter is that Congressional authority under the Commerce Clause is extremely broad; thus, there is indeed little that it cannot regulate and, therefore, tax.  Many other sectors of the economy are constitutionally regulated and taxed; even if the individual mandate's penalty provisions were found to constitute a tax, they would be permissible under the U.S. Supreme Court’s expansive reading of the Commerce Clause.

Health reform insurance mandates may not be challenged as a bill of attainder, violating individual rights by imposing penalties without trial.  Opponents of the law characterize the monetary penalty that may be imposed on those who fail to purchase health insurance policies as being similar to a government seizure of paychecks of Communists employed by the federal government in the 1940s – a legislative act overturned in the courts as a bill of attainder.  However, the last major case to construe the bill of attainder provision found that a law requiring then-former President Nixon to maintain his Presidential papers did not violate the provision, since the law advanced a legitimate legislative purpose – preservation of his papers after he had approved a destruction schedule and before he had established a Presidential library – and was directed at the proper class of persons being regulated (in that case, a class of one).  The legitimate legislative purpose in the case of health reform is the anticipated improvement to the health care status of the public, and the cost savings associated with primary and preventive care and anticipated system efficiencies; the class of persons being regulated is, appropriately, folks who would otherwise be uninsured, or those responsible for arranging for their insurance. In sum, the promotion of universal health insurance coverage by financial incentives and disincentives pass constitutional muster as a rational set of rules designed to improve and streamline a significant sector of our economy.

Is the legislation perfect?  No.  Is it constitutional?  Yes.  It would be more productive at this point to engage in honest debate about relative merits of the House and Senate bills and focus on the conference committee's work, to start keeping files on what will need to be tweaked in a year or two, and to prepare (providers, especially) for implementation of health reform.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting