Florida v. Health and Human Services, if upheld by the Supreme Court, could go down as an important landmark in the history of American liberty. But that’s a big “if.”
Most people expected Judge C. Roger Vinson of the U.S. District Court for the Northern District of Florida to rule that the individual mandate was unconstitutional, based on his questions and comments during hearings on the case. Less expected was his decision to overturn the 2010 health care law in its entirety.
PPACA supporters, some of whom have yet to finish reading the ruling, are claiming it “ignores facts” and are comparing it to Bush v. Gore, by which they mean it is a baldly political, activist ruling. (Given that Bush v. Gore was a per curiam, i.e., collective, decision on its critical feature, the assertion that it was activist and political is worth debating, but that debate will have to wait.)
Indeed, Judge Vinson has penned a persuasive, well-researched, and tightly-reasoned opinion, one that will surely have some impact on what the Supreme Court eventually ends up doing. Judge Vinson marshals statements from both sides to show that PPACA indeed represents an unprecedented expansion of federal power, one that, if upheld, makes it difficult to argue that the Constitution restrains Congress in any way. Equally importantly, he points out that even the White House believes that the PPACA’s other provisions will destabilize the health insurance market without an individual mandate, thereby making it difficult to uphold the rest of PPACA in the mandate’s absence.
There are four key components to Judge Vinson’s opinion: (1) a ruling that the Patient Protection and Affordable Care Act’s dramatic expansion of Medicaid is not coercive to the states; (2) that the individual mandate exceeds Congressional powers to regulate interstate commerce; (3) that the individual mandate exceeds Congressional prerogatives to enact laws that are “necessary and proper” for executing its delegated powers; (4) that the individual mandate was essential to the functioning of other critical components of PPACA, and therefore the entire law must be overturned.
For a discussion of Virginia v. Sebelius, the other case in which the individual mandate was overturned, please read my discussion posted last December. As a reminder, in that case, Judge Henry Hudson overturned the individual mandate while explicitly leaving the rest of PPACA intact.
1. Medicaid expansion is not coercive to the States
Vinson quickly dismissed of one plank of the PPACA challenge: that PPACA violates the Spending Clause of the constitution, because it “coerces” the states to accept burdensome requirements as a condition of additional Medicaid funding. Vinson simply pointed out that Medicaid is a voluntary program that any state can choose to abandon; hence, there is no instance of federal coercion.
2. Failing to buy health insurance is not an act of interstate commerce
Vinson persuasively dissected the argument that Congress, via its power to regulate interstate commerce, has the ability to force an individual to engage in economic activity. He points out (p. 25) that even supporters of expansive Congressional power concede that the Framers of the Constitution plainly intended the Commerce Clause to ensure that states did not get into trade wars with each other; i.e., the Clause regulates the movement of finished goods across state lines.
After the New Deal, especially in Wickard v. Filburn, the Supreme Court began expansively interpreting the Commerce Clause to regulate even the personal consumption of wheat by a farmer growing the crop on his own farm. Eventually, in United States v. Lopez, the Supremes began to outline limits to Congressional power under the Commerce Clause. Vinson goes on to point out that, if Congress has the power to force individuals to buy private health insurance, “it is not hyperbolizing to suggest that Congress could do almost anything it wanted” (p. 42):
It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause. If it has the power to compel an otherwise passive individual into a commercial transaction with a third party merely by asserting — as was done in the Act — that compelling the actual transaction is itself “commercial and economic in nature, and substantially affects interstate commerce” [see Act § 1501(a)(1)], it is not hyperbolizing to suggest that Congress could do almost anything it wanted. It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place. If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain for it would be “difficult to perceive any limitation on federal power” [Lopez, supra, 514 U.S. at 564], and we would have a Constitution in name only. Surely this is not what the Founding Fathers could have intended.
Vinson minces the arguments that health care is “unique,” and therefore the individual mandate is “uniquely justified.” The defendants argued that the mandate is necessary because (a) all people get sick eventually, and therefore can’t opt out of the health care market; (b) hospitals are required to provide health care services, regardless of a patient’s ability to pay; and (c) patients who obtain uncompensated care shift the cost of that care to others, thereby engaging in economic activity.
On the first point, that people can’t opt out of the health care market, Vinson points out that there are lots of markets people can’t opt out of, like the market for food, or the market for transportation, or the market for housing. Are mandates appropriate in those areas? (p. 46):
There are lots of markets — especially if defined broadly enough — that people cannot “opt out” of. For example, everyone must participate in the food market. Instead of attempting to control wheat supply by regulating the acreage and amount of wheat a farmer could grow as in Wickard, under this logic, Congress could more directly raise too low wheat prices merely by increasing demand through mandating that every adult purchase and consume wheat bread daily, rationalized on the grounds that because everyone must participate in the market for food, non-consumers of wheat bread adversely affect prices in the wheat market. Or, as was discussed during oral argument, Congress could require that people buy and consume broccoli at regular intervals, not only because the required purchases will positively impact interstate commerce, but also because people who eat healthier tend to be healthier, and are thus more productive and put less of a strain on the health care system. Similarly, because virtually no one can be divorced from the transportation market, Congress could require that everyone above a certain income threshold buy a General Motors automobile — now partially government-owned — because those who do not buy GM cars (or those who buy foreign cars) are adversely impacting commerce and a taxpayer-subsidized business.
I pause here to emphasize that the foregoing is not an irrelevant and fanciful “parade of horribles.” Rather, these are some of the serious concerns implicated by the individual mandate that are being discussed and debated by legal scholars. For example, in the course of defending the Constitutionality of the individual mandate, and responding to the same concerns identified above, often-cited law professor and dean of the University of California Irvine School of Law Erwin Chemerinsky has opined that although “what people choose to eat well might be regarded as a personal liberty” (and thus unregulable), “Congress could use its commerce power to require people to buy cars”…When I mentioned this to the defendants’ attorney at oral argument, he allowed for the possibility that “maybe Dean Chemerinsky is right.” See Tr. at 69. Therefore, the potential for this assertion of power has received at least some theoretical consideration and has not been ruled out as Constitutionally implausible.
On the latter two points, that the uninsured take advantage of uncompensated care, thereby engaging in “economic activity,” Vinson points out that the number of assumptions and inferences required to assert this exceed constitutional boundaries (p. 50):
The uninsured can only be said to have a substantial effect on interstate commerce in the manner as described by the defendants: (i) if they get sick or injured; (ii) if they are still uninsured at that specific point in time; (iii) if they seek medical care for that sickness or injury; (iv) if they are unable to pay for the medical care received; and (v) if they are unable or unwilling to make payment arrangements directly with the health care provider, or with assistance of family, friends, and charitable groups, and the costs are thereafter shifted to others. In my view, this is the sort of piling “inference upon inference” rejected in Lopez, supra, 514 U.S. at 567, and subsequently described in Morrison as “unworkable if we are to maintain the Constitution’s enumeration of powers.” Supra, 529 U.S. at 615.21.
Contrary to the assertions of some, Vinson does not ignore the fact that uncompensated care occurs. He simply points out that assuming that a specific individual will seek uncompensated care in the future is inappropriate. This points to the fact that Democrats could have sought a limited enrollment period, instead of an individual mandate, as a way of achieving most of their policy goals.
I do not mean to suggest that these inferences are illogical or unreasonable to draw. As did the majority in Lopez and Morrison, I do not dispute or question their underlying existence. Indeed, while $43 billion in uncompensated care from 2008 was only 2% of national health care expenditures for that year, it is clearly a large amount of money; and it demonstrates that a number of the uninsured are taking the five sequential steps. And when they do, Congress plainly has the power to regulate them at that time (or even at the time that they initially seek medical care), a fact with which the plaintiffs agree. But, to cast the net wide enough to reach everyone in the present, with the expectation that they will (or could) take those steps in the future, goes beyond the existing “outer limits” of the Commerce Clause and would, I believe, require inferential leaps of the sort rejected in Lopez.
3. The Necessary and Proper clause does not allow Congress to impose an individual mandate
Many Constitutional analysts, on both sides of the jurisprudential aisle, were unhappy with Judge Hudson’s exploration of the Necessary and Proper clause in Virginia v. Sebelius. Judge Vinson spends more intellectual energy in this area, pointing out that the Constitution only allows Congress to “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers” that were explicitly laid out in the Constitution (p. 58).
Vinson points out that advocates of the law assert that the mandate is essential because without it, the law’s requirement that insurers take all comers, without regard to preexisting conditions, would “[bankrupt] the health insurance industry.” But that doesn’t rise to the level of Constitutional justification (p. 60):
Thus, rather than being used to implement or facilitate enforcement of the Act’s insurance industry reforms, the individual mandate is actually being used as the means to avoid the adverse consequences of the Act itself. Such an application of the Necessary and Proper Clause would have the perverse effect of enabling Congress to pass ill conceived, or economically disruptive statutes, secure in the knowledge that the more dysfunctional the results of the statute are, the more essential or “necessary” the statutory fix would be. Under such a rationale, the more harm the statute does, the more power Congress could assume for itself under the Necessary and Proper Clause. This result would, of course, expand the Necessary and Proper Clause far beyond its original meaning, and allow Congress to exceed the powers specifically enumerated in Article I. Surely this is not what the Founders anticipated, nor how that Clause should operate.
4. The individual mandate is not severable from the rest of PPACA
First off, PPACA lacked the typical severability clause, which specifies that if any one provision of a law is overturned, the rest of the law should remain intact. He notes (p. 67) that a prior version of PPACA contained a severability clause, and therefore suggests that the omission of such a clause in the final bill was intentional:
The lack of a severability clause in this case is significant because one had been included in an earlier version of the Act, but it was removed in the bill that subsequently became law…In other words, the severability clause was intentionally left out of the Act. The absence of a severability clause is further significant because the individual mandate was controversial all during the progress of the legislation and Congress was undoubtedly well aware that legal challenges were coming. Indeed, as noted earlier, even before the Act became law, several states had passed statutes declaring the individual mandate unconstitutional and purporting to exempt their residents from it.
Vinson points out that it is advocates of PPACA who have repeatedly argued that the individual mandate is necessary for the proper functioning of the law. “In fact, [the defendants] refer to it as an ‘essential’ part of the Act at least fourteen times in their motion to dismiss.”
While Vinson acknowledges the general principle that courts should presume that the remainder of a law should stand, if they find a particular provision unconstitutional, he points out that this is not a “rigid and inflexible rule” (p. 65):
The standard for determining whether an unconstitutional statutory provision can be severed from the remainder of the statute is well-established, and it consists of a two-part test. First, after finding the challenged provision unconstitutional, the court must determine if the other provisions can function independently and remain “fully operative as a law.” See Free Enterprise Fund, supra, 130 S. Ct. at 3161. In a statute that is approximately 2,700 pages long and has several hundred sections — certain of which have only a remote and tangential connection to health care — it stands to reason that some (perhaps even most) of the remaining provisions can stand alone and function independently of the individual mandate.
Clearly, as Vinson goes on to describe, and Peter Suderman pointed out in the wake of Virginia v. Sebelius, the entire structure of PPACA hinges on the individual mandate. Here is the logic: (a) the law requires insurers to cover everyone, regardless of whether or not they have pre-existing conditions; (b) the individual mandate is necessary, so that people don’t opt out of insurance until they get sick, defeating the point of insurance and bankrupting the insurers; (c) it’s unfair to force people to buy an expensive product like health insurance without subsidizing the costs for people with lower incomes; (d) paying for those subsidies requires cutting spending and/or raising taxes elsewhere.
That, in a nutshell, covers about 80 to 90 percent of PPACA’s architecture. Vinson makes the quite plausible case, endorsed not only by the law’s advocates but the text of the law itself, that most of PPACA would not work without the mandate (pp. 68-70):
Moreover, the defendants have conceded that the Act’s health insurance reforms cannot survive without the individual mandate, which is extremely significant because the various insurance provisions, in turn, are the very heart of the Act itself. The health insurance reform provisions were cited repeatedly during the health care debate, and they were instrumental in passing the Act. In speech after speech President Obama emphasized that the legislative goal was “health insurance reform” and stressed how important it was that Congress fundamentally reform how health insurance companies do business, and “protect every American from the worst practices of the insurance industry.” See, for example, Remarks of President Obama, The State of the Union, delivered Jan. 27, 2009.28 Meanwhile, the Act’s supporters in the Senate and House similarly spoke repeatedly and often of the legislative efforts as being the means to comprehensively reform the health insurance industry…
Congress has also acknowledged in the Act itself that the individual mandate is absolutely “essential” to the Act’s overarching goal of expanding the availability of affordable health insurance coverage and protecting individuals with pre-existing medical conditions: “[I]f there were no [individual mandate], many individuals would wait to purchase health insurance until they needed care . . . The [individual mandate] is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.” Act § 501(a)(2)(I) (emphasis added).
In other words, the individual mandate is indisputably necessary to the Act’s insurance market reforms, which are, in turn, indisputably necessary to the purpose of the Act. This is obviously a very different situation than in Alaska Airlines, Inc., supra, 480 U.S. at 694 n.18 and 696 (unconstitutional provision severed from rest of statute where the provision was “uncontroversial,” and the debate on the final bill demonstrated its “relative unimportance”), and is more in line with the situation alluded to in New York, supra, 505 U.S. at 187 (suggesting by implication that the entire legislation should be struck when “the purpose of the Act is . . . defeated by the invalidation” of one of its provisions).
In order to overturn Judge Vinson’s ruling upon appeal, it will be necessary for the government to rebut itself: to disprove its own arguments that the individual mandate is essential to PPACA.
What will happen in the end? It all depends on Anthony Kennedy. Based on Kennedy’s history of splitting the difference, a strong possibility is that Kennedy overturns the individual mandate and other closely related provisions, while upholding other aspects of PPACA. But Judge Vinson has made a persuasive case that we’re better off starting from scratch.