Brief Fact Summary.
Congress enacted the Patient Protection and Affordable Care Act in 2010, which requires most Americans to have minimum essential health insurance coverage. It is argued that Congress does not have the power to enact the Act under the Commerce Clause.
Synopsis of Rule of Law.
The power to regulate commerce presupposes the existence of commercial activity to be regulated.
Medicaid spending accounts for over 20 percent of the average State's total budget, with federal funds covering 50 to 83 percent of those costs.View Full Point of Law
Congress enacted the Patient Protection and Affordable Care Act in 2010 to increase the number of Americans covered by health insurance and to reduce the cost of coverage. The individual mandate demands Americans to have minimum essential health insurance coverage. While some people would receive the coverage from employers or government, others must purchase insurance from a private company to meet the requirement. Those who fail to have essential health insurance coverage must pay penalty to the Internal Revenue Service.
Can Congress require individuals to purchase minimum essential health insurance coverage pursuant to the Patient Protection and Affordable Care Act?
No, Congress does not have the power to require individuals to purchase health insurance because the individual mandate does not regulate existing commercial activity. It only compels individuals to become active in commerce by purchasing a product, on the ground that failure to do so affects interstate commerce. Allowing Congress to regulate individuals because they are doing nothing broadly expands the scope of the Constitution and thus is not allowed.
Congress does have the power to enact the minimum coverage provision under the Commerce Clause. Evidence clearly shows that not all U.S residents have health insurance and as a result, medical-care providers deliver significant amounts of care to the uninsured while receiving no payment. Health care providers, however, do not absorb these bad debts but instead raise the prices, which result in a higher cost for those who have health insurance. States cannot effectively resolve the problem of the uninsured. Congress’ intervention is strongly needed to overcome the collective-action problem.
This case should be compared to Wickard, where the Court recognized Commerce Clause authority over intrastate activity. In Wickard, the farmer was actively engaged in the production and thus the Government could regulate that activity because of its aggregated effect on commerce. In the case at issue, however, the Government is arguing that it may regulate individuals under the Commerce Clause just because they are not doing something the Government would want them to do.
Moreover, while the Government argues that sickness and injury are unpredictable and unavoidable and requiring individuals to have health insurance in advance is thus legitimate, Congress may not anticipate an activity to regulate individuals not currently engaged in commerce. Any police power to regulate individuals as such belongs the the States. Because the individual mandate compels citizens into commerce precisely because they chose to refrain from commercial activity, it shall be unconstitutional.