President Barack Obama’s drive to expand the health-insurance system may survive the legislative gauntlet. After that, the litigation gauntlet begins.
Critics of the proposals, including Republican Sen. Orrin Hatch of Utah, are already laying the groundwork for constitutional challenges. They say Congress’s power to regulate interstate commerce and levy taxes doesn’t extend to forcing individuals to get health insurance or face a penalty.
“As soon as the thing passes, people would basically run to a bunch of district courts all over the country,” said David Rivkin, a Washington lawyer at Baker & Hostetler LLP who has written several articles questioning the health-care plan’s constitutionality.
Any such challenge would have a high historical hurdle to overcome: The U.S. Supreme Court hasn’t invalidated a federal program of comparable size since striking down much of President Franklin Roosevelt’s New Deal in the 1930s.
That hasn’t stopped opponents of the health-care plan from honing their arguments, focusing on provisions that would impose a tax on people who aren’t covered by insurance. The versions approved by two Senate committees also contain explicit requirements that individuals acquire insurance.
A central question in the debate is whether Congress has authority to enact those provisions under the constitutional clause that authorizes lawmakers to regulate interstate commerce. Critics say the health plan, by imposing a penalty on people for doing nothing, goes beyond anything the Supreme Court has ever approved.
“Even if the Supreme Court has expanded the commerce power, there has been one constant: Congress was always regulating activities,” Hatch said last month. The bill approved by the Senate Finance Committee, by contrast, would force people “to do something they have chosen not to do at all.”
For almost 60 years after the New Deal took hold, the Supreme Court read the commerce clause to give Congress all but unfettered authority. More recently, the justices have enforced limits. The court in 1995 struck down a federal law aimed at restricting guns near schools, then buttressed that ruling in 2000 by overturning a law that let female victims of violence sue their assailants.
In both cases, a 5-4 majority faulted Congress for attempting to regulate what the court said was essentially non-economic activity – carrying a firearm in one case and engaging in gender-motivated violence in the other.
The momentum shifted back in 2005, when the court voted 6-3 to allow prosecutions under federal drug laws for marijuana that is grown and used locally for medicinal purposes. The majority said that when Congress is regulating a national market, it can also set rules for related local transactions.
Under that reasoning, the health-insurance mandate easily passes constitutional muster, says Erwin Chemerinsky, dean of the University of California at Irvine School of Law.
“The Supreme Court has said that Congress can regulate economic activities that, taken cumulatively, have a substantial effect on interstate commerce,” Chemerinsky said. “Requiring people to buy health insurance is economic activity. Taken cumulatively, it has a substantial effect on interstate commerce.”
The tax provisions offer supporters a second line of defense to sustain the health-care overhaul even if the courts were to strike down the mandate. The House bill imposes the levy through the federal income tax code.
Rivkin contended that the tax “is in the nature of a surcharge and not a true tax on income,” in part because its size would be tied to the cost of buying insurance. Upholding the levy would mean that Congress could similarly tax people who don’t join a health club or eat their vegetables, he said.
Others disagree, saying a tax on non-policyholders would be little different from a myriad of other provisions in the federal code.
“There are cases out there in which the court has said it’s not going to worry too much about those formalistic distinctions,” said Jonathan Adler, a professor who runs the Center for Business Law & Regulation at Case Western Reserve University’s law school in Cleveland.
Adler said he is “not dismissive” of the possibility the measure might be struck down. Even so, those chances are slim in light of the broad authority the high court has given Congress, he said.
“From a standpoint of first principles, it’s potentially problematic, but the Supreme Court’s approach to the federal government’s powers has drifted quite a bit away from that,” he said.