In the meantime, the ACA has had little idle time to wait and see what happens. Just as the law put some of its provisions into effect as quickly as possible, its opponents stood ready with lawsuits even while the Act was still just a bill on Capitol Hill. It has been rising through the appellate courts ever since, challenged for the constitutionality of its "individual mandate" and destined for the Supreme Court.
In late June, the Sixth Circuit was the first appeals court to rule on a challenge to the Affordable Care Act’s individual mandate. This was the case brought by the Thomas More Law Center and four people who believe that Congress can’t make them purchase health insurance or else face a monetary penalty. (One of them has since purchased health insurance and claims that she can’t constitutionally be made to keep it.) Divided 2-to-1, the judge panel decided the individual mandate is constitutional.
A concurring opinion was written by Judge Sutton, who was described in an ABC News report as "an 'intellectual leader among judicial conservatives' with a long record of supporting the cause of federalism -- and limiting the power of the federal government vis-a-vis the states."
Somewhere in me there's a college kid who misses studying long texts (weirdo), because I read the ruling-- all three opinions-- and I felt a need to summarize for you the incredibly fascinating bits.
From Judge Sutton’s opinion in the Thomas More case, 29 June 2011:
Does the minimum coverage provision unconstitutionally regulate inactivity by compelling some people to enter the medical insurance market?
Health insurance is about financial risk; the risk is that you won’t have enough money to pay for healthcare when you inevitably need it. If you don’t purchase health insurance—or sufficient health insurance—you’re self-insuring. Self-insuring isn’t inaction; it’s a whole lot of action. Of people who previously bought insurance and then dropped it: active. Of availing oneself of barebones insurance (which the ACA might require be upped): activity.
[...] inaction is action [...] when it comes to financial risk.At any rate, the Constitution’s Commerce Clause (U.S. Const. art. I, § 8, cl. 3) doesn’t distinguish between action and inaction in any way that limits Congress’s power, nor has the Court treated the clause as limiting when what the law regulates is "economic and substantially affect[s] commerce." Three things that are economic and substantially affect commerce: private insurance, public insurance, and self-insurance. As Congress is permitted to makes rules for some of these methods of paying for health care, the Commerce Clause doesn’t prohibit Congress from making rules for all three of them.
No one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk.Take an example coercive law, for non-exempt individuals, which regulates their insurance coverage at the point of sale: When a person arrives to receive health treatment, her choice at that moment will be to either pay for the care or purchase health insurance from then on. That law would be constitutional, because Congress may put a federal condition on something that affects federal commerce (a person’s ability to pay affects the federal commerce of medical care), even if the choice comes at a time of crisis. The ACA places your decision before, not at, a time of crisis, and you’ve a choice: the monetary penalty is (for the first seven years, if not longer) cheaper than the insurance.
If one of these laws is legitimate, so it would seem is the other. Requiring insurance today and requiring it at a future point of sale amount to policy differences in degree, not kind, and not the sort of policy differences removed from the political branches by the word “proper” or for that matter “necessary” or “regulate” or “commerce.”
From Judge Martin’s court opinion:
All congressional enactments are entitled to a "presumption of constitutionality," invalidated only upon a "plain showing that Congress has exceeded its constitutional bounds." United States v. Morrison, 529 U.S. 598, 607 (2000).
Why institute a minimum coverage provision? (The federal government’s case...) Without such, people would be incentivized to delay their purchase of health insurance until they need health care. That would "leave a gaping hole" (cf. Raich, 545 U.S. at 22 – regulating marijuana, interstate, for the Controlled Substances Act) in the plan to create "effective health insurance markets" which can sell "improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions." 42 U.S.C. § 18091(a)(2)(I).
Supporting examples: Seven states passed guaranteed issue reforms with no minimum coverage requirement; costs rose and insurance companies left those insurance markets. In Massachusetts, which has a minimum coverage requirement, "despite the economic downturn, the number of workers offered employer-based coverage has actually increased." 42 U.S.C. § 18091(a)(2)(D). The decision on minimum coverage provision: valid.
The vast majority of individuals are active in the market for health care delivery because of two unique characteristics of this market: (1) virtually everyone requires health care services at some unpredictable point; and (2) individuals receive health care services regardless of ability to pay.... Part two includes people who would opt for no health insurance.
Back to Sutton’s opinion:
Penalty, not tax. Darn.
Congress has authority to collect taxes under the Taxing and Spending Clause (U.S. Const. art. I, § 8, cl. 1). Why should the penalty be treated as a penalty instead of as a tax?
(1) Congress said so. (2) The Act explicitly "invoked its commerce power, not its taxing authority." (3) Congress made tax-penalty distinctions throughout the Act. As explained in Judge Martin’s court opinion: sometimes tax and penalty are treated the same; other times not; this reasonably falls under other times. (4) The main function of the individual mandate is not to raise revenue. Sure, revenue will be gotten, but according to the acts findings, the aim is to get more people to participate in health insurance (to broaden the risk pool) before they need medical care instead of after they need it. For the most part, the Act will be getting uninsured people to buy private insurance, a revenue gain of nothing for the government. And, dude, even the Act’s proponents don’t want your penalty money for the government coffers; they want you to carry health insurance. That’s the goal: Get insurance, even if it’s private insurance, so that you don’t pay a penalty. (5) [Even more reasons this penalty isn’t a tax.]
Congress found that providing uncompensated medical care to the uninsured cost $43 billion in 2008 and that these costs were shifted to others through higher premiums. See 42 U.S.C. § 18091(a)(2)(F).The Thomas More case is a pre-enforcement facial challenge against the individual mandate’s constitutionality, meaning it challenges the ACA’s individual mandate in not just some but all settings, which makes the plaintiffs’ particular situations irrelevant. As-applied challenges may come at the appropriate time, and will "have hills to climb."
SCOTUSblog has been on top of the constitutionality of the Affordable Care Act, with assessments from both sides.