Sixth Circuit Upholds Constitutionality Of Affordable Care Act
The first Court of Appeals ruling on the Constitutionality of the Affordable Care Act results in a victory for the government:
The Obama administration won the first appellate review of the 2010 health care law on Wednesday as a three-judge panel from the United States Court of Appeals for the Sixth Circuit in Cincinnati held that it was constitutional for Congress to require that Americans obtain health insurance.
The ruling is the first of three opinions to be delivered by separate courts of appeal that heard arguments in the health care litigation in May and June. Opinions are expected soon from panels in both the Fourth Circuit in Richmond, Va., and in the Eleventh Circuit in Atlanta.
The appeal, which was heard by the court on June 1, came in a challenge to the law filed by the Thomas More Law Center, a conservative public interest law firm in Ann Arbor, Mich. In a 69-page ruling, the panel upheld Judge George C. Steeh of Federal District Court in Detroit, an appointee of President Bill Clinton, who had concluded that choices to not obtain insurance were commercial decisions that could be regulated by Congress.
The ruling on the merits of the case was 2-1 in favor of the government’s position, which the majority pretty much accepted entirely:
As long as Congress does not exceed the established limits of its Commerce Power, there is no constitutional impediment to enacting legislation that could be characterized as regulating inactivity. The Supreme Court has never directly addressed whether Congress may use its Commerce Clause power to regulate inactivity, and it has not defined activity or inactivity in this context. However, it has eschewed defining the scope of the Commerce Power by reference to flexible labels, and it consistently stresses that Congress’s authority to legislate under this grant of power is informed by “broad principles of economic practicality.” Lopez, 514 U.S. at 571 (Kennedy, J., concurring); see Wickard, 317 U.S. at 120 (explaining that Congress’s power cannot be determined “by reference to any formula which would give controlling force to nomenclature such as ‘production’ and ‘indirect’ and foreclose consideration of the actual effects of the activity in question upon interstate commerce”).
Furthermore, far from regulating inactivity, the minimum coverage provision regulates individuals who are, in the aggregate, active in the health care market. The Supreme Court has stated that “when it is necessary in order to prevent an evil to make the law embrace more than the precise thing to be prevented [Congress] may do so.” Westfall v. United States, 274 U.S. 256, 259 (1927). The vast majority of individuals are active in the market for health care delivery because of two unique characteristics of this market: (1) virtually everyone requires health care services at some unpredictable point; and (2) individuals receive health care services regardless of ability to pay.
Virtually everyone will need health care services at some point, including, in the aggregate, those without health insurance. Even dramatic attempts to protect one’s health and minimize the need for health care will not always be successful, and the health care market is characterized by unpredictable and unavoidable needs for care. The ubiquity and unpredictability of the need for medical care is born out by the statistics. More than eighty percent of adults nationwide visited a doctor or other health care professional one or more times in 2009. Centers for Disease Control and Prevention National Center for Health Statistics, Summary Health Statistics for U.S. Adults: National Health Interview Survey, 2009, table 35 (2010). Additionally, individuals receive health care services regardless of whether they can afford the treatment. The obligation to provide treatment regardless of ability to pay is imposed by the Emergency Medical Treatment and Active Labor Act, 42 U.S.C. § 1395dd, state laws, and many institutions’ charitable missions. The unavoidable need for health care coupled with the obligation to provide treatment make it virtually certain that all individuals will require and receive health care at some point. Thus, although there is no firm, constitutional bar that prohibits Congress from placing regulations on what could be described as inactivity, even if there were it would not impact this case due to the unique aspects of health care that make all individuals active in this market.
In light of the conclusion that the minimum coverage provision is a valid exercise of Congress’s power under the Commerce Clause, it is not necessary to resolve whether the provision could also be sustained as a proper exercise of Congress’s power to tax and spend under the General Welfare Clause, U.S. Const. Art. I, § 8, cl. 1.
Congress had a rational basis for concluding that, in the aggregate, the practice of self-insuring for the cost of health care substantially affects interstate commerce. Furthermore, Congress had a rational basis for concluding that the minimum coverage provision is essential to the Affordable Care Act’s larger reforms to the national markets in health care delivery and health insurance. Finally, the provision regulates active participation in the health care market, and in any case, the Constitution imposes no categorical bar on regulating inactivity. Thus, the minimum coverage provision is a valid exercise of Congress’s authority under the Commerce Clause, and the decision of the district court is AFFIRMED.
Because it upheld the mandate based on the Commerce Clause, the Court declined to rule on the government’s alternative argument that the mandate is a proper exercise of Congresses power under the General Welfare Clause, although it’s worth noting that no Court has accepted that argument to date.
In dissent, Judge James Graham, who had expressed doubts about the mandate’s constitutionality during oral argument, adopted many of the argument’s we’ve seen from the District Court Judges who have struck down the mandate as an improper exercise of the Commerce Clause power:
Congress’s exercise of power intrudes on both the States and the people. It brings an end to state experimentation and overrides the expressed legislative will of several states that have guaranteed to their citizens the freedom to choose not to purchase health insurance. See Idaho Code Ann. § 39-9003; Utah Code Ann. § 63M-1-2505.5; Va. Code Ann. § 38.2-3430.1:1. The mandate forces law-abiding individuals to purchase a product – an expensive product, no less – and thereby invades the realm ofan individual’s financial planning decisions. Cf. Maryland v. Wirtz, 392 U.S. 183, 196 n.27 (1968) (“Neither here nor in Wickard had the Court declared that Congress may use a relatively trivial impact on commerce as an excuse for broad general regulation of state or private activities.”). In the absence of the mandate, individuals have the right to decide how to finance medical expenses. The mandate extinguishes that right.
If the exercise of power is allowed and the mandate upheld, it is difficult to see what the limits on Congress’s Commerce Clause authority would be. What aspect of human activity would escape federal power? The ultimate issue in this case is this: Does the notion of federalism still have vitality? To approve the exercise of power would arm Congress with the authority to force individuals to do whatever it sees fit (within boundaries like the First Amendment and Due Process Clause), as long as the regulation concerns an activity or decision that, when aggregated, can be said to have some loose, but-for type of economic connection, which nearly all human activity does. See Lopez, 514 U.S. at 565 (“[D]epending on the level of generality, any activity can be looked upon as commercial.”). Such a power feels very much like the general police power that the Tenth Amendment reserves to the States and the people. A structural shift of that magnitude can be accomplished legitimately only through constitutional amendment.
Judge Graham’s question about what limits are left on the Commerce power if the mandate is upheld was answered to some degree in a concurring opinion by Judge David Sutton:
That brings me to the lingering intuition—shared by most Americans, I suspect—that Congress should not be able to compel citizens to buy products they do not want. If Congress can require Americans to buy medical insurance today, what of tomorrow? Could it compel individuals to buy health care itself in the form of an annual check-up or for that matter a health-club membership? Could it require computer companies to sell medical-insurance policies in the open market in order to widen the asset pool available to pay insurance claims? And if Congress can do this in the healthcare field, what of other fields of commerce and other products?
These are good questions, but there are some answers. In most respects, a mandate to purchase health insurance does not parallel these other settings or markets. Regulating how citizens pay for what they already receive (health care), never quite know when they will need, and in the case of severe illnesses or emergencies generally will not be able to afford, has few (if any) parallels in modern life. Not every intrusive law is an unconstitutionally intrusive law. And even the most powerful intuition about the meaning of the Constitution must be matched with a textual and enforceable theory of constitutional limits, and the activity/inactivity dichotomy does not work with respect to health insurance in many settings, if any of them.
The very force of the intuition also helps to undo it, as one is left to wonder why the Commerce Clause does the work of establishing this limitation. Few doubt that Congress could pass an equally coercive law under its taxing power by imposing a healthcare tax on everyone and freeing them from the tax if they purchased health insurance. If Congress may engage in the same type of compelling/conscripting/commandeering of individuals to buy products under the taxing power, is it not strange that only the broadest of congressional powers carves out a limiton this same type of regulation?
The Court has basically taken two of the most far-reached Commerce Clause cases — Wickard v. Filburn and Gonalzez v. Raich — and used them to argue that requiring people to purchase health insurance is a proper exercise of Congressional power in the same sense that wheat grown solely for personal use, or marijuana grown solely for a state-approved medical marijuana program, was still subject to Congress’s power under the Commerce Clause. This, as I’ve argued before, is the big problem that opponents of the Affordable Care Act may face when these cases finally make it to the Supreme Court. Historically, the Court has given Congress virtually unlimited power under the Commerce Clause — United States v. Morrison and United States v. Lopez were the first cases in 60 years to limit Congressional power under this clause, and they’ve been eclipsed by Raich — and it isn’t too far of a logical leap for the Court to take those cases and use them to uphold the mandate. In fact, given the inherent reluctance of Courts to overrule long-standing precedent, it seems more likely that SCOTUS will do that than that they’ll strike the mandate down.
This case will be appealed, obviously. The Plaintiffs have the option of appealing to the entire Circuit Court of Appeals, or to appeal to the Supreme Court. Quite honestly, I’m not sure what advantage would be gained by seeking an en banc hearing at this point, so I would suspect that this case will be going to Washington. The Supreme Court could deny to accept the appeal, of course, but given the magnitude of the case that seems unlikely.
There are two more Appeals Court decisions waiting out there, from the Fourth and Eleventh Circuits. We should get those by the end of the summer.
Here’s the opinion: