Jack Sartory

2/24/11

Gov

Mr. Sanborn

The Health Care Reform Act is probably the most significant piece of domestic

reform passed in recent history and amongst the most controversial. The most

controversial and constitutionally challenged piece of the Act is the Individual Mandate

that requires every citizen to purchase health insurance after 2014 or pay a penalty. Two

parties, the Commonwealth of Virginia and the State of Florida, have successfully won

cases at the district level that declare the Health Care Reform Act unconstitutional based

on the Individual mandate and mislabeling of a tax. At the same time, the Thomas More

Law Center and Liberty University have been unsuccessful in proving the constitutional

illegality of the Health Care Reform Act on their district levels by arguing it violates

states rights, violates religious freedoms, and again the Individual Mandate is

unconstitutional. The result of these contradicting decisions will bring the case to the

appellate level and eventually the Supreme Court who will, in my opinion, likely declare

the Act unconstitutional as it extends Congress’ power beyond the limits of the

Commerce Clause.

In December of 2010, the Commonwealth of Virginia challenged the

constitutionality of the Patient Protection and Affordable Care Act (ACA). The
Commonwealth claimed that the Minimum Essential Coverage Provision, which states

that “Every United States citizen, other than those falling within specified exceptions,

maintain a minimum level of health insurance coverage for each month beginning in

2014. Failure to comply will result in a penalty included with the taxpayer’s annual

return”, is unconstitutional as is does not fall within the limits of the Commerce Clause of

the Constitution. They argue that the Commerce Clause does not extend so far as to

penalize an otherwise unwilling individual to purchase health insurance. Furthermore, the

Commonwealth argues that the provision is mischaracterized as a tax instead of a penalty

and is thus subject to stricter legal constraints. The defendant, in this case the Secretary of

the Department of Health and Human Services, argues that the Individual Mandate

requiring all citizens to purchase health insurance does fall within the Commerce Clause

as it is part of a large scale reform. “A general regulatory statute bears a substantial

relation to commerce...Furthermore the secretary adds, that for the provisions of a

complex regulatory program to fall within Congress’s commerce power, it is enough that

the challenged provisions are an integral part of the regulatory program and that the

regulatory scheme when considered as a whole satisfies the test.” The Secretary also

counters the claim that the ACA is a penalty not a tax by claiming that it is not a penalty

but a tax for regulatory purposes. At the conclusion of both arguments, the District Court

of Richmond ruled in favor of the plaintiffs. The rational behind this decision was, “that

Congress lacked power under the Commerce Clause, or associated Necessary and Proper

Clause, to compel an individual to involuntarily engage in a private commercial

transaction, as contemplated by the Minimum Essential Coverage Provision.” The court

also ruled that the penalty for not purchasing health insurance was indeed mislabeled as a
tax. “The two words taxes vs. penalty are not interchangeable… and if an exaction as

clearly a penalty then, it cannot be converted into a tax by simply expedient of calling it

such.”

The Thomas More Law Center (TMLC), a national public interest law firm,

brought suit against the United States regarding the constitutionality of the Health Care

Reform Act. The TMLC argued, similarly to the Commonwealth of Virginia, that the

Commerce Clause of the constitution does not extend to the Individual Mandate, as

Congress does not have the authority to penalize citizens for not engaging in economic

activity. Alternatively, they contend that the Healthcare Reform Act violates states rights

under the Tenth Amendment, Free Exercise Clause and the Fifth Amendment, Equal

Protection Clause. The TMLC argues its stance by claiming the Act will cause economic

harm to individuals as they attempt to reorganize their affairs. “Plaintiffs’ decisions to

forego certain spending today, so they will have the funds to pay for health insurance

when the Individual Mandate takes effect in 2014, are injuries fairly traceable to the Act

for the purposes of conferring standing. There is nothing improbable about the contention

that the Individual Mandate is causing the plaintiffs to feel economic pressure today.”

The defendants contend that the economic harm must be traceable to the Act and cannot

be argued prior to 2014. They also argue that the Individual Mandate falls within the

Commerce Clause, “it is the last category, which deals with local activities that do not

participate in interstate commerce, but which nonetheless ‘substantially affect’ interstate

commerce, which is the focus of this case.” In addition, the argument is that the
Individual Mandate falls within a larger healthcare reform scheme. The court ultimately

ruled in favor of the defendant; “Having concluded that Congress has the power under the

Commerce Clause to enact the Health Care Reform Act, it is unnecessary for the court to

address the issue of Congress’s alternate source of authority to tax and spend under the

General Welfare Clause.” This decision contradicts many of the rulings of Richmond

District Court, forcing the case to the next level.

In early 2011 the State of Florida again challenged the constitutionality of the

Health Care Reform Act. The plaintiffs argued that the expansion of Medicade in the bill

was unconstitutional, “For this claim, the state plaintiffs object to the fundamental and

‘massive’ changes in the nature and cope of the Medicade program that the Act will bring

about. They contend that the Act violates the Spending Clause [U.S. Const. art. I, sec. 8,

cl. 1] as it significantly expands and alters the Medicaid program to such an extend they

cannot afford the newly-imposed costs and burdens.” The states claimed that spending

condition passed by Congress was coercive in nature and if that was true it would be in

violation of the Spending Clause. Ultimately this argument was rejected. “This claim

cannot succeed and that the defendants are entitled to judgment as a matter of law…

rejecting coercion theory argument based on the claim that while the state joined

Medicaid voluntarily, it has grown to depend on federal funds and now has no choice but

to remain in the program in order to prevent a collapse of its medical system.” The next

argument used by the plaintiff was that the Individual Mandate exceeded Congress’s

power under the Commerce Clause. The current state of the Commerce Clause extends it

to three categories. “Congress may first regulate the use of the channels of interstate
commerce. Second, Congress is empowered to regulate and protect the instrumentalities

of interstate commerce, or persons or things in interstate commerce…Finally, Congress’

commerce authority includes the power to regulate those activities having a substantial

relation to interstate commerce.” The main hinge of the argument surrounds the last

category of the clause. The plaintiffs contend that the Commerce Clause does not give the

Federal Government the power to penalize an individual for not buying health insurance

and that not participating in commerce does not fall under their jurisdiction. The

defendants claim that this inactivity does in fact play a role in interstate commerce and

thus constitutes activity and must falls under the Commerce Clause. The court eventually

ruled in favor of the plaintiff and declared that the individual mandate falls outside of the

Commerce Clause. However, the next issue was whether the Individual Mandate could be

severed form the Act. If the provision could be severed then the Act itself would still be

constitutional. After another round of deliberations the verdict was made on the

severability of the Mandate. “Because the individual mandate is unconstitutional and not

severable, the entire Act must be declared void.”

In November of 2010 another suit was filed against the Department of Health and

Human Services; plaintiff in this case was Liberty University, a Christian University in

Lynchburg Virginia. The plaintiff’s claimed that the Healthcare Reform act violated

several of the Congressional powers stated in the Constitution. “Plaintiffs allege that the

employer and individual coverage provisions are beyond Congress’ Article I powers

(Count One), violate Tenth Amendment (Count Two), violate Establishment Clause of

the First Amendment (Count Three),violate the Free Exercise Clause of the First
Amendment (Count Four), violate Religious Freedom Restoration Act (Count Five),

violate the equal protection component of the Due Process Clause of the Fifth

Amendment (Count Six), violates the right to free speech and association under the First

Amendment (Count Seven), violates Article I, Section 9 prohibition against

unapportioned capitation or direct taxes (Count Eight), and violate the Guarantee Clause

(Count Nine).” The main arguments Liberty was trying to bring forth with their charges

was that the Individual Mandate is unconstitutional, as every other case has alleged, and

that the Health Care Reform Act violates their religious beliefs as some funding may go

to abortion. The plaintiffs claim that, “they are Christians and have ‘sincerely held

religious beliefs’ that abortion is ‘murder and morally repugnant’ and that they should not

be obliged to support abortions in any way or ‘formally associate with’ those who support

abortions in any way.” The district court of Lynchburg rejected this claim stating that,

“free speech rights are not violated where the individual required to subsidize a

government message with which he disagrees. Compelled Support of government

programs, even those that advocate a position on a particular issue, is ‘perfectly

constitutional, as every taxpayer must attest’”. The court also struck down the allegation

that the Individual Mandate is unconstitutional. With both central arguments of the case

declared invalid the court ruled in favor of the defendants.

The result of these contradicting district court decisions is that the case regarding

the constitutionality of the Health Care Reform Act must be heard at the appellate level

and eventually the Supreme Court. The issue that will likely be the deciding factor of the

cause is the same argument that has been used in all four cases surmised so far. This
allegation is that the Commerce Clause of the constitution does not grant Congress to

penalize individuals for not purchasing health insurance. I believe the more conservative

judges on the Court, Scalia and Thomas, will be successful in convincing a majority of

the court that the allowing of Congress to penalize citizens for economic inactivity

extends the power of the Federal Government to new heights never before reached, as

was similarly argued in Lopez v US. This idea combined with the growing desire in the

country for smaller government will convince the court to declare the Individual Mandate

unconstitutional. The mandate itself will also be ruled unseverable from the Act, so the

entire bill will be declared unconstitutional. Given the Republican majority in Congress I

doubt that a new Health Care Reform Act will be drawn up, and this will likely be the

death of attempted health care form in the US at this time.

The Healthcare Reform Act: Examining the Commerce

Clause Once More

Jack Sartory

3/11/11

AP Gov

Mr. Sanborn