Friday, December 4, 2009

"State Sovereignty" and the Health Insurance Mandate

NPR's Morning Edition this morning reported on state movements to sidestep any health insurance mandate that might come out of the health care overhaul now before Congress.  (We previously reported on these here.)  These are state constitutional and state statutory measures that say that individuals shall not be required to purchase health insurance.

If Congress has authority to enact an individual health insurance mandate, these state measure run up against the Supremacy Clause: They are almost surely unconstitutional, as conflicting directly with the federal requirement.

But advocates of the measures nevertheless claim that they interfere with "state sovereignty."  As one advocate in the last line of this morning's story said, "No Supreme Court has ever been more sympathetic to state sovereignty than the current Court."

Whether that's right or not, it almost surely would not affect the Supremacy Clause analysis (unless the Court were willing to undo well settled Supremacy Clause principles).  So what does it mean?

One possible answer: A mandate's interference with "state sovereignty" means that Congress lacks authority under the Commerce Clause and Necessary and Proper Clause to enact a mandate in the first place.  This interpretation might draw support from U.S. v. Lopez (holding that Congress lacked authority under the Commerce Clause to enact the Gun Free School Zone Act) and U.S. v. Morrison (holding that Congress lacked authority under the Commerce Clause to enact the civil damages provision of the Violence Against Women Act).  The majority in both of those cases referred to the slippery slope that might result if Congress had authority to enact those laws: "Congress could regulate any activity that it found was related to the economic productivity of individual citizens . . . .  Under the[se] theories . . . it is difficult to perceive any limitation on federal power, even in areas such as criminal law enforcement or education where States historically have been sovereign."  But neither case turned on this slippery slope, and the interference with traditionally state regulated activities alone is surely not enough to render congressional action unconstitutional.  See Gonzales v. Raich (upholding a federal drug possession law).

State sovereignty claims aside, some (including some commentators on this blog) have argued that Congress lacks authority under the Commerce Clause to impose a mandate, because not having health care (the activity regulated) is not a commercial activity.  Stated differently: Congress can restrain or regulate economic activity; but it cannot require economic activity.

This argument makes two mistakes.  First, it distinguishes a restriction (a regulation) with a requirement (as non-regulation), and, relatedly, it distinguishes action (as economic activity) with non-action (as non-economic activity).  It's not at all clear that the courts view "economic activity" this way.  For example, the Eighth Circuit in U.S. v. Howell, 552 F.3d 709 (2009) recently upheld a federal provision requiring former sex offenders to register as sex offenders under the Commerce Clause.  That court rejected the criminal defendant's argument that Congress lacked authority to regulate non-action under the Commerce Clause.  Similarly, the Second Circuit in U.S. v. Sage, 92 F. 3d 101 (1996), upheld a federal law criminalizing the failure to pay past child support obligations.  The Sage court addressed the question squarely:

Sage argues that the Act is not within the Commerce Clause power and thus invalid on its face because it concerns not the sending of money interstate but the failure to send money.

Such reasoning would mean that Congress would have no power to prohibit a monopoly so complete as to thwart all other interstate commerce in a line of trade.  Yet the Sherman Act . . . is within the Commerce Clause power. . . . To accept Sage's reasoning would disable the United States from punishing under the Hobbs Act . . . making it a crime to "obstruct" interstate commerce, someone who successfully prevented the interstate trade by extortion and murder.  There would be no trade to obstruct.

Sage at 105 (citations omitted).  These cases might be distinguished because they only require activity that is already required under state law, or because they require limits to economic activity.  But they--and Howell--also suggest that the courts do not draw the sharp line between restrictions and requirements, actions and non-actions, that this argument assumes.

And with good reason.  In the health care context, an election not to purchase health insurance is every bit an economic activity as an election to purchase.  It's those significant interstate economic costs associated with individuals' elections not to purchase that in some measure sparked the health care debate in the first place.  Not purchasing, in this context, is an economic activity.

But the argument makes a second mistake.  The Supreme Court has never required only "economic activity" as a subject of regulation under the Commerce Clause.  In Lopez, Morrison, and Raich, the Court was quite clear that Congress can regulate activity that has a substantial effect on interstate commerce (in addition to the channels and instrumentalities of interstate commerce).  Decisions not to purchase health insurance, "economic" or not, surely have such a substantial effect--again, it's that effect that's driving much of the movement for reform.

Whatever the merits of the policy arguments against an individual mandate, these Commerce Clause arguments based on "state sovereignty" and lack of economic activity do not render them unconstitutional.

SDS

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