Wednesday, April 13, 2011

Constitutional Implications of the Patient Protection & Affordable Care Act

Does the Individual Mandate & Penalty Provision Pass Constitutional Muster?
by Josh Flynn-Brown

Mr. Flynn-Brown is a third-year student at Chapman University School of Law, California. He examines questions raised about the constitutional validity of the Patient Protection and Affordable Care Act. Ultimately, he concludes, the Supreme Court is unlikely to approve the authority of the federal government under the Act to require individuals to enter into contracts with private insurance companies or face monetary penalties.

President Obama signed the Patient Protection and Affordable Care Act[1] (the “Act”) into law on March 23, 2010.  He signed the Health Care and Education Reconciliation Act of 2010 into law on March 30, 2010 (the “Reconciliation Act”) amending the Act.  The Reconciliation Act was used to make financial changes to the original Act, such as amending the amount of the penalty for not purchasing health insurance.

Immediately after becoming law, Attorneys General from 13 states filed suit against the  Federal Government claiming the individual mandate was unconstitutional because it exceeded the scope of Congress’s power to regulate interstate commerce. This complaint was later amended to include 26 states.  A 27th state, Virginia, filed a separate lawsuit.  In addition, private citizens from Michigan also filed a lawsuit against the Federal Government in their individual capacities.

All complaints challenged the constitutionality of the individual mandate of the Act, which is contained in section 1501 “Requirement To Maintain Minimum Essential Coverage.”  This section, which takes effect in 2014, requires every individual to maintain health insurance.  If a person does not obtain insurance by 2016 they will be subject to a penalty of $695 per individual per month or an amount equal to the excess of 2.5% of an individual taxpayer’s household income for the taxable year over the amount of gross income specified in section 6012(a)(1) of the IRS Code.

Recently, federal district court decisions in Virginia and Florida declared the individual mandate to be an unconstitutional provision. The two courts held that Congress exceeded its Article I authority with the creation of the individual mandate provision.  As the recent court decisions illustrate, the opposition questions the constitutionality of the Act.  In particular, it maintains that two provisions violate the Constitution; the individual mandate (which requires individuals to purchase health care) and the penalty imposed for those who do not.

Some constitutional scholars have opined that the law is a constitutional exercise of Congress’s commerce power.  They maintain that the commerce clause is sufficiently broad to allow Congress the power to mandate that every citizen purchase health insurance.  Many elected officials including President Obama, former House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid agree.  Former House Judiciary Committee Chairman John Conyers has declared its constitutionality stating, “All the…constitutional scholars I know…say there’s nothing unconstitutional in this bill.”

However, the Congressional Budget Office is less certain and has questioned the constitutionality of imposing such an individual mandate because it would consist of an unprecedented form of federal action.  The Congressional Budget Office notes that the government has never required people to buy any good or service as a condition of lawful residence in the United States.  This article analyzes the individual mandate and penalty provision by first exploring the history and original intent of the Constitution.  It then examines and discusses the Act in the context of the commerce clause and tax clause and relevant Supreme Court precedent interpreting these two.

[1] For citations to materials listed in this introduction, please download the full paper.

Read the entire paper here.