Most involved in the world of health care are closely following
the debate in federal courts about the constitutionality of the new
health care law's requirement that all individuals purchase health
insurance or pay a monetary penalty.
When a federal district court in Virginia ruled in December that
the individual mandate was unconstitutional, it was the first court
to so rule. Previously, two district courts have upheld the
constitutionality of the individual mandate, stating that it was a
valid exercise of congressional power under the commerce
clause.
The debate won't end soon; other challenges in other district
courts are winding their way through the court system. Inevitably,
however, the matter will be decided by the United States Supreme
Court, but experts don't expect the high court to hear a challenge
on the reform law until 2012. The individual mandate doesn't kick
in until 2014.
Reform law opponents say Congress cannot compel people to
purchase health insurance against their will. Supporters say an
individual's refusal to purchase insurance is an active decision
that can be regulated, because every person needs health care at
some point. Following are key arguments from those opposing and
supporting the constitutionality of the individual mandate.
Arguments that Congress did not have the power under the U.S.
Constitution to enact the individual insurance mandate: Under
the commerce clause of the Constitution, Congress has the power to
regulate matters dealing with interstate commerce, including
intrastate matters that have a substantial effect on interstate
commerce. The Supreme Court has held that this power does not
extend to regulation of discrete local matters, such as education
and local crime, that are not inherently economic in nature.
An individual's decision to purchase health insurance, or
rather, the decision not to purchase health insurance, is a matter
that is not inherently economic in nature. Rather, the decision not
to purchase insurance is a decision to abstain from engaging in
economic activity. The commerce clause does not allow Congress to
pass laws regulating “inactivity.”
Arguments that Congress did have the power to enact the
individual insurance mandate: Congress' authority to pass the
insurance mandate flowed from the “necessary and
proper” clause under which it is empowered to make laws
necessary or proper to permit other laws to take effect. Congress
has the power to regulate the national health care insurance
industry and, through that power, to regulate the national health
care market. It follows, then, that Congress can regulate anything
connected with either of those markets.
The individual mandate is critical to other provisions of the
health care law that will not work without it. For example, the
individual insurance mandate is necessary to effect provisions that
preclude health insurers from taking an individual's health status
into account when considering whether to provide them with health
insurance or when calculating the amount they must pay. This
nondiscrimination provision will not work unless the cost of
insuring high-risk or high-cost individuals is spread over the
population.
Healthy people can opt not to buy health insurance. In that way,
they can avoid subsidizing health costs for people who have serious
illnesses. If insurance companies are required to pay costs for
high-risk insureds without any subsidization, they will go out of
business, and health insurance will not be available for anyone.
Therefore, requiring healthy people to buy health insurance will
help ensure that the insurance nondiscrimination provision
works.
The individual insurance mandate is also compared to Medicare,
which has been held constitutional by the Supreme Court. Under
Medicare Part A, individuals are required to “purchase”
health insurance from the federal government for their senior
years. Under the health care law, individuals will be required to
purchase health insurance from insurers for their working
years.
If one accepts the validity of Medicare, then one must accept
the validity of the insurance mandate.
Read more Washington Wit & Wisdom
columns.
A specialist in health care legislation, regulations and
government relations, Cara C. Bachenheimer is vice president,
government relations, for Invacare Corp., Elyria, Ohio.
Bachenheimer previously worked at the law firm of Epstein, Becker
& Green in Washington, D.C., and at the American Association
for Homecare and the Health Industry Distributors Association. You
can reach her at 440/329-6226 or cbachenheimer@invacare.com.
