Parsing “Populism” in Resistance to Reform

Today the NYT leads with a story on a growing resistance to the individual mandate to purchase health insurance. The mandate is a key part of virtually all the reform bills now being discussed. A “growing group of lawmakers are pressing for state constitutional amendments that [they believe] would outlaw” the mandate in their states. Law professors have a dim view of the effort:

“States can no more nullify a federal law like this than they could nullify the civil rights laws by adopting constitutional amendments,” said Timothy Stoltzfus Jost, a health law expert at Washington & Lee University School of Law.

Mark A. Hall, a law professor at Wake Forest who has studied the constitutionality of mandates that people buy health insurance, said, “There is no way this challenge will succeed in court,” adding that the state measures seemed more “sort of an act of defiance, a form of civil disobedience if you will.”

Even Randy E. Barnett, a Georgetown Law professor who has written about what he views as legitimate constitutional questions about health insurance mandates, seemed doubtful. “While using federal power to force individuals to buy private insurance raises serious constitutional questions, I just don’t see what these state resolutions add to the constitutional objections to this expansion of federal power,” Professor Barnett said.

What I find so depressing about the new Orval Faubuses of health care is their failure to address funding mechanisms for purchasing health that would make the mandates much less onerous. As I blogged earlier this summer, the House Tri-Committee Bill tries to shift the burden of paying for health care from the already strapped lower-middle class to wealthier citizens who have disproportionately benefited from globalization and other economic trends. At that post, attorney David S. Miller commented:

A mark-to-market tax on the publicly-traded securities of the highest-income and wealthiest individuals would achieve [even more progressivity]. This proposal would also raise significantly more revenue than the [proposed House] surtax, would not require any increase in tax rates, would affect far fewer taxpayers, and would be more in line with the consensus view that the tax base must be broadened. It would also level the playing field between wage and income earners (who are currently subject to tax at ordinary income rates on all or virtually all of their economic income) and with investors (who defer tax indefinitely on appreciation and, when taxed, pay it at reduced long-term capital gains rates).

Unfortunately, the ballyhooed Baucus Bill appears to be far less redistributive than even the House Bill (which I have criticized for failing to distinguish between the merely well-off and the truly wealthy–a very important distinction in an era of fractal inequality). The new state resistance to a mandate should be seen as less a defense of the middle class than it is a sad example of classically self-defeating resistance to equitable distribution of social benefits and burdens.

Health reform financing must rely not merely on redistribution from the healthy to the sick, but also from the rich to the rest. A just society is committed to the universal destination of human goods-–especially those essential to the preservation of human life. Perhaps we will eventually reach a point at which taxation of those at the top to provide for the care of those at the bottom truly threatens the well-being of our economy. But when “the increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceed[s] the total income of the poorest 20 percent of Americans,” we’re a long way from that point on the Laffer Curve.

Reform Rodeo

Photo by David Monniaux

1. The HITECH Act’s Breach Notification rules are now in effect. As is noted in the article, many are questioning some of the limitations in the act– which may reduce the Act’s impact on protecting privacy.

2. Eugene Volokh’s blog discusses the constitutionality of an individual mandate.

3. A persuasive article from Fortune Magazine describing how Baucus’ Finance Committee bill will raise taxes on the middle class, and in dong so violate the core tenets of the Obama administration.

4. A nicely compiled listing of the amendments that have been put forward during the Finance Bill’s mark up.

5. A FiveThirtyEight post questions those who presume that health reform is inevitable, raising some sobering thoughts.

6. Under the Obama administration, The FDA has provided a black box warning for the anti-nausea drug Phenergan, presumably in light of the Supreme Court’s recent rejection of the drug manufacturer’s claim that federal regulations preempt state court’s from suing drug manufacturers for defective warnings.

7. In case you missed it: A post from Health Reform Watch by Professor Timothy S. Jost on Health Care Cooperatives was cited by Jacob S. Hacker in an article over at the New England Journal of Medicine’s web site. Hacker’s article, “Poor Substitutes–Why Cooperatives and Triggers Can’t Achieve the Goals of a Public Option,” is well written and well read.

Is it Unconstitutional to Mandate Health Insurance?

Mark A. Hall

Is it unconstitutional to mandate health insurance? It seems unprecedented to require citizens to purchase insurance simply because they live in the U.S. (rather than as a condition of driving a car or owning a business, for instance).  Therefore, several credentialed, conservative lawyers think that compulsory health insurance is unconstitutional.  See here and here and here. Their reasoning is unconvincing and deeply flawed.  Since I’m writing in part for a non-legal audience, I’ll start with some basics and provide a lay explanation.  (Go here for a fuller account).

Constitutional attacks fall into two basic categories:  (1) lack of federal power (Congress simply lacks any power to do this under the main body of the Constitution); and (2) violation of individual rights protected by the “Bill of Rights.”  Considering (1), Congress has ample power and precedent through the Constitution’s “Commerce Clause” to regulate just about any aspect of the national economy.  Health insurance is quintessentially an economic good.  The only possible objection is that mandating its purchase is not the same as “regulating” its purchase, but a mandate is just a stronger form of regulation.  When Congressional power exists, nothing in law says that stronger actions are less supported than weaker ones.

An insurance mandate would be enforced through income tax laws, so even if a simple mandate were not a valid “regulation,” it still could fall easily within Congress’s plenary power to tax or not tax income.  For instance, anyone purchasing insurance could be given an income tax credit, and those not purchasing could be assessed an income tax penalty.  The only possible constitutional restriction is an archaic provision saying that if Congress imposes anything that amounts to a “head tax” or “poll tax” (that is, taxing people simply as people rather than taxing their income), then it must do so uniformly (that is, the same amount per person).  This technical restriction is easily avoided by using income tax laws. Purists complain that taxes should be proportional to actual income and should not be used mainly to regulate economic behavior, but our tax code, for better or worse, is riddled with such regulatory provisions and so they are clearly constitutional.

Arguments about federal authority deal mainly with states’ rights and sovereign power, but the real basis for opposition is motivated more by sentiments about individual rights - the notion that government should not use its recognized authority to tell people how to spend their money.  This notion of economic liberty had much greater traction in a prior era, but it has little basis in modern constitutional law.  Eighty years ago, the Supreme Court used the concept of “substantive due process” to protect individual economic liberties, but the Court has thoroughly and repeatedly repudiated this body of law since the 1930s.  Today, even Justice Scalia regards substantive due process as an “oxymoron.”

Under both liberal and conservative jurisprudence, the Constitution protects individual autonomy strongly only when “fundamental rights”  are involved.  There may be fundamental rights to decide about medical treatments, but having insurance does not require anyone to undergo treatment.  It only requires them to have a means to pay for any treatment they might choose to receive.  The liberty in question is purely economic and has none of the strong elements of personal or bodily integrity that invoke Constitutional protection.  In short, there is no fundamental right to be uninsured, and so various arguments based on the Bill of Rights fall flat.  The closest plausible argument is one based on a federal statute protecting religious liberty, but Congress is Constitutionally free to override one statute with another.

If Constitutional concerns still remain, the simplest fix (ironically) would be simply to enact social insurance (as we currently do for Medicare and social security retirement) but allow people to opt out if they purchase private insurance.  Politically, of course, this is not in the cards, but the fact that social insurance faces none of the alleged Constitutional infirmities of mandating private insurance points to this basic realization: Congress is on solid Constitutional ground in expanding health insurance coverage in essentially any fashion that is politically and socially feasible.

Mark Hall
Professor of Law and Public Health
Wake Forest University School of Law

[UPDATE: 03/26/10 http://www.healthreformwatch.com/2010/03/26/are-the-attorneys-generals-constitutional-claims-bogus/]