Most involved in the world of health care are closely following the debate in federal courts about the constitutionality of the new health care law's requirement that all individuals purchase health insurance or pay a monetary penalty.
When a federal district court in Virginia ruled in December that the individual mandate was unconstitutional, it was the first court to so rule. Previously, two district courts have upheld the constitutionality of the individual mandate, stating that it was a valid exercise of congressional power under the commerce clause.
The debate won't end soon; other challenges in other district courts are winding their way through the court system. Inevitably, however, the matter will be decided by the United States Supreme Court, but experts don't expect the high court to hear a challenge on the reform law until 2012. The individual mandate doesn't kick in until 2014.
Reform law opponents say Congress cannot compel people to purchase health insurance against their will. Supporters say an individual's refusal to purchase insurance is an active decision that can be regulated, because every person needs health care at some point. Following are key arguments from those opposing and supporting the constitutionality of the individual mandate.
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Arguments that Congress did not have the power under the U.S. Constitution to enact the individual insurance mandate: Under the commerce clause of the Constitution, Congress has the power to regulate matters dealing with interstate commerce, including intrastate matters that have a substantial effect on interstate commerce. The Supreme Court has held that this power does not extend to regulation of discrete local matters, such as education and local crime, that are not inherently economic in nature.
An individual's decision to purchase health insurance, or rather, the decision not to purchase health insurance, is a matter that is not inherently economic in nature. Rather, the decision not to purchase insurance is a decision to abstain from engaging in economic activity. The commerce clause does not allow Congress to pass laws regulating “inactivity.”
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Arguments that Congress did have the power to enact the individual insurance mandate: Congress' authority to pass the insurance mandate flowed from the “necessary and proper” clause under which it is empowered to make laws necessary or proper to permit other laws to take effect. Congress has the power to regulate the national health care insurance industry and, through that power, to regulate the national health care market. It follows, then, that Congress can regulate anything connected with either of those markets.
The individual mandate is critical to other provisions of the health care law that will not work without it. For example, the individual insurance mandate is necessary to effect provisions that preclude health insurers from taking an individual's health status into account when considering whether to provide them with health insurance or when calculating the amount they must pay. This nondiscrimination provision will not work unless the cost of insuring high-risk or high-cost individuals is spread over the population.
Healthy people can opt not to buy health insurance. In that way, they can avoid subsidizing health costs for people who have serious illnesses. If insurance companies are required to pay costs for high-risk insureds without any subsidization, they will go out of business, and health insurance will not be available for anyone. Therefore, requiring healthy people to buy health insurance will help ensure that the insurance nondiscrimination provision works.
The individual insurance mandate is also compared to Medicare, which has been held constitutional by the Supreme Court. Under Medicare Part A, individuals are required to “purchase” health insurance from the federal government for their senior years. Under the health care law, individuals will be required to purchase health insurance from insurers for their working years.
If one accepts the validity of Medicare, then one must accept the validity of the insurance mandate.
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A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her at 440/329-6226 or cbachenheimer@invacare.com.
