On March 23, after more than a year of debate, President Obama signed the Patient Protection and Affordable Care Act (H.R.3590) into law (P.L. 111-148). The Patient Protection and Affordable Care Act will ensure that all Americans have access to quality, affordable health insurance. To meet this goal, the legislation includes an individual responsibility policy, requiring individuals who can afford to purchase insurance to maintain minimum essential coverage, providing premium and cost-sharing tax credits to make health insurance more affordable for low- and middle-income Americans, and permitting an exemption for those who would still face a hardship in purchasing health insurance. Individuals who choose to remain uninsured would be subject to a financial penalty.
Within hours of the enactment, 13 state Attorneys General filed a frivolous lawsuit in Florida challenging the constitutionality of the new law. [Available here] Virginia’s state Attorney General has also filed a lawsuit. [Available here] The suits primarily argue that the individual responsibility policy is unconstitutional. However, these opponents of health care reform are merely creating a political sideshow to detract attention from the significant benefits that American families will receive from this new legislation; legal experts generally agree that the suits are without merit.
Article I, Section 8 of the Constitution enumerates the specific but broad powers that provide the basis for Congress’ enactment of the Patient Protection and Affordable Care Act, including the Commerce Clause (Art. 1, Sec.8, cl. 3), the Power to Tax and Spend for the General Welfare (Art. 1, Sec.8, cl. 1), and the Necessary and Proper Clause (Art. 1, Sec.8, cl. 18). Many legal experts, including Simon Lazarus, Erwin Chemerinsky, Robert Shapiro and Jack Balkin have all defended the constitutionality of the Act. [Simon Lazarus, "Mandatory Health Insurance: Is It Constitutional?" 12/09; Politico, 10/23/09; The Atlanta-Journal Constitution, 11/2/09; New England Journal of Medicine, 1/13/10.] Professor Jack Balkin has noted that it would be a “constitutional revolution” if the Court struck down the individual responsibility policy. [New England Journal of Medicine, "The Constitutionality of the Individual Mandate for Health Insurance, 1/13/10]
Article I, Section 8 of the Constitution Grants Congress the Power to Enact the Individual Responsibility Policy
The General Welfare Clause permits Congress to tax and spend for the general welfare. This clause has been the basis for actions by Congress to provide for Americans’ social and economic security by passing Social Security, Medicare and Medicaid, the well-established foundations of its action in enacting the individual responsibility requirements. According to Erwin Chemerinsky, “in the last 70 years, no federal taxing or spending program has been declared to exceed the scope of Congress’ power.” [Los Angeles Times, "The Constitutionality of Healthcare," 10/6/09 ] Instead, the Clause has been interpreted as providing Congress broad latitude in securing the social and economic security of our citizens.
It is within Congress’ discretion to determine what constitutes the “general welfare.” The General Welfare Clause was relied upon to uphold the constitutionality of Social Security in Helvering v. Davis, decided more than 70 years ago. In that case, the Court wrote that the discretion to determine whether a particular matter impacts the general welfare falls “within the wide range of discretion permitted to the Congress.”
A court would have to turn back the clock to a time before the New Deal – and reject well-established policies like taxing to pay for Social Security and Medicare – in order to find that the individual responsibility policy exceeds Congress’ authority to promote the “general welfare” of Americans by enforcing the individual responsibility policy with a tax.
The Commerce Clause permits Congress to regulate matters with a substantial effect on interstate commerce. Congress was acting within its power when it enacted the individual responsibility policy because the policy will have a substantial effect on interstate commerce. The power of Congress to regulate interstate commerce under the Commerce Clause has been well settled since at least the time of the New Deal, when the Supreme Court upheld laws like the Fair Labor Standards Act to rule that Congress had the authority to outlaw child labor. Congress reasonably concluded that spending on health care has a substantial effect on interstate commerce because individuals buy and use health insurance across state borders, national health spending is projected to make up almost 18 percent of our nation’s economy (P.L. 111-148, Sec.10106(a)(2)(B), page 2099), and the costs of providing emergency medical services to the uninsured has a significant impact on health care costs.
When the Senate considered the Patient Protection and Affordable Care Act in December, it explicitly adopted a set of findings, now the law, related to the impact of the individual mandate on interstate commerce. These find that “health insurance and health care services are a significant part of the national economy;” and that the individual “requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased;” and that the “requirement is essential to creating effective health insurance markets.”
The Supreme Court has previously held that the insurance industry constitutes the type of activity that falls within Congress’ regulatory authority under the Commerce Clause. [Simon Lazarus, "Mandatory Health Insurance: Is It Constitutional?" 12/09] In 1944, the Court found in U.S. v. South-Eastern Underwriters Association that Congress was empowered to regulate insurance. The Court noted that “perhaps no modern commercial enterprise directly affects so many persons in all walks of life as does the insurance business.” Upholding congressional regulation of insurance under the Commerce Clause makes clear Congress’ action in passing the Patient Protection and Affordable Care Act was an appropriate use of its Commerce Clause authority.
The Necessary and Proper Clause permits Congress to “make all laws necessary and proper for executing its power.” The Supreme Court settled the meaning of the Necessary and Proper Clause 190 years ago in Justice Marshall’s landmark decision in McCullough v. Maryland. That case established that the Necessary and Proper Clause does not limit the powers of Congress, but is “placed among the powers of Congress.” This clause goes hand in hand with the Commerce Clause to ensure congressional authority to regulate activity with a significant economic impact. Congress is permitted to “make all laws which shall be necessary and proper for carrying into execution the foregoing powers and all other powers vested by this Constitution in the United States.”
Similar cornerstones of the social safety net, like Social Security, Medicare and Medicaid, have long been upheld by the courts. Congress has enacted various requirements throughout the years, such as the requirement to register for the draft, pay minimum wages, and pay taxes, including the taxes deducted from paychecks to pay for Social Security and Medicare. These are the well-established foundations for the individual responsibility policy enacted in The Patient Protection and Affordable Care Act.
 The states include Florida, South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, and South Dakota.