Critical Condition

The Latest Obamacare Court Ruling: Congress Can Regulate ‘Mental Activity’

On Tuesday, Judge Gladys Kessler of the U.S. District Court for the District of Columbia handed down her decision in the fifth Obamacare court challenge, Mead v. Holder. Kessler upheld the individual mandate, along with the rest of the law, leading PPACA advocates to crow that three judges have upheld the mandate, versus two who have overturned it.

But Judge Kessler’s reasoning is weak, and her ruling demonstrates why there is a real possibility that the Supreme Court will overturn Obamacare.

1. Individuals have the standing to sue.

Kessler spends the first 24 pages of her 64-page ruling examining whether or not the plaintiffs have standing to sue. In this case, the plaintiffs consisted of five individuals: two who state that they will pay for all future medical expenses out-of-pocket, and therefore won’t “free-ride” off of the subsidized health-care system; and three who say that they will refuse all medical services for the rest of their lives.

Kessler ultimately disagrees that the plaintiffs won’t take advantage of free emergency care, but does agree that they have standing to sue, because the individual mandate will impose a financial burden on them that they must begin to address now. On page 46, she favorably cites another pro-Obamacare ruling, Thomas More Law Center v. Obama, in which Michigan judge George Steeh ruled that “as living, breathing beings … [the plaintiffs] cannot opt out of [the health-care services] market.”

2. Health care is special.

Beginning on page 25, Kessler examines whether or not the Commerce Clause allows Congress to impose an individual mandate. She goes through the familiar litany of Supreme Court Commerce Clause jurisprudence, and then gets to the heart of the matter: Are people who choose not to buy health insurance engaging in interstate commerce? On page 39, she writes:

The findings on this subject could not be clearer: the great majority of the millions of Americans who remain uninsured consume medical services they cannot pay for, often resulting in personal bankruptcy. In fact, the ACA’s findings state that “62% of all personal bankruptcies are caused in part by medical expenses.”

It’s truly amazing to see this fraudulent medical bankruptcy figure uncritically repeated in a court document. It comes from a partisan analysis published by members of Physicians for a National Health Plan, and contains numerous methodological flaws that Megan McArdle identified here and here. It included as “medical bankruptcy” anyone who declared bankruptcy who also “lost at least 2 weeks of work-related income due to illness/injury,” or who reported “uncovered medical bills >$1000 in the past 2 years,” among other absurdly broad criteria. For Judge Kessler to cite this article in order to claim that “the findings on this subject could not be clearer” is a bad start.

She then goes on to write:

To put it less analytically, and less charitably, those who choose–and Plaintiffs have made such a deliberate choice—not to purchase health insurance will benefit greatly when they become ill, as they surely will, from the free health care which must be provided by emergency rooms and hospitals to the sick and dying who show up on their doorstep. In short, those who choose not to purchase health insurance will ultimately get a “free ride” on the backs of those Americans who have made responsible choices to provide for the illness we all must face at some point in our lives.

This “free ride,” as I have written about previously, is a consequence of a clumsy 1986 law called the Emergency Medical Treatment and Active Labor Act, or EMTALA, which forces hospitals to provide free care to everyone, regardless of their ability to pay. It is nonsensical to argue that Congress can pass an unconstitutional law in order to solve problems caused by another act of Congress.

And yet, this is precisely what Kessler argues, on page 47 of her ruling. She claims that the health-care market is special, and fundamentally different from other markets; hence, we shouldn’t worry that PPACA’s individual mandate could be used to force people to buy cars, food, or housing:

This second aspect of the health care market distinguishes the ACA from Plaintiffs’ hypothetical scenario in which Congress enacts a law requiring individuals to purchase automobiles in an attempt to regulate the transportation market. Even assuming that all individuals require transportation in the same sense that all individuals require medical services, automobile manufacturers are not required by law to give cars to people who show up at their door in need of transportation but without the money to pay for it. Similarly, food and lodging are basic necessities, but the Court is not aware of any law requiring restaurants or hotels to provide either free of charge.

It should be emphasized that this distinction is not merely a useful limiting principle on Congress’s Commerce Clause power. Rather, it is a basic, relevant fact about the operation of the health care market which is critical to understanding the ACA’s efforts to reform the health care system.

Nonsense. Judge Kessler simply makes this up. There is nothing “basic” about, or inherent to, the operation of the health-care market that required Congress to force hospitals to provide uncompensated emergency care. Congress could repeal EMTALA tomorrow if it wanted to, eliminating the alleged “free rider” problem and obviating the need for the mandate.

3. Congress can regulate “mental activity.”

Judge Kessler then goes on to assert something entirely new in the history of American jurisprudence: that the Commerce Clause allows Congress to regulate “mental activity”:#more#

As previous Commerce Clause cases have all involved physical activity, as opposed to mental activity, i.e. decision-making, there is little judicial guidance on whether the latter falls within Congress’s power. See Thomas More Law Ctr., 720 F.Supp.2d at 893 (describing the “activity/inactivity distinction” as an issue of first impression). However, this Court finds the distinction, which Plaintiffs rely on heavily, to be of little significance…Making a choice is an affirmative action, whether one decides to do something or not do something. They are two sides of the same coin. To pretend otherwise is to ignore reality.

If Congress can regulate “mental activity,” then there simply isn’t anything that Congress can’t regulate, and the Constitution as we know it no longer exists.

4. The mandate is not a “tax,” and can’t be justified by the General Welfare Clause.

The defendants in Mead v. Holder tried to argue that the individual mandate is a tax, and therefore constitutional under Congress’s power to “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.”

Judge Kessler made quick work of this claim, noting that, “to date, every court which has considered whether [the individual mandate] operates as a tax has concluded that it does not.” She pointed out that the text of the law describes the mandate as a penalty, not a tax, and notes the legislative history that proves that this was a deliberate choice by Congress. This “the mandate is a tax” argument, having been rejected by all five lower courts, appears to be the weakest element of the pro-mandate case.

What does Mead v. Holder mean for the next round?

What Mead v. Holder tells us is that the pro-mandate case hinges on believing two things: one, that the “free rider” problem is insolubly inherent to the health-care market, leading to the necessity of the individual mandate; and two, that Congress has the power to regulate “mental activity,” along with essentially everything else. Suffice it to say: It’s not a slam dunk that higher courts will agree.

Avik Roy — Avik Roy is the President of the Foundation for Research on Equal Opportunity (, a non-partisan, non-profit think tank.

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