In its decision today upholding the constitutionality of the Affordable Care Act, the Supreme Court, by a five-to-four vote, held that the individual mandate provision (requiring uninsured individuals who can afford to buy health insurance to do so) was justified by the Congress' power to tax, but not by its power to regulate interstate commerce. In the end, the difference may seem insignificant. When all the dust settled, the individual mandate is constitutional. But it is nonetheless worth understanding the disagreement about the reach of the Commerce Clause, because this was the primary focus of most of the public debate leading up to the decision and was also the subject of the wildly popular broccoli hypothetical.
Only one justice thought the Act was constitutional under the taxing power but not the commerce power -- Chief Justice Roberts. The other eight justices thought the Act was either constitutional (Ginsburg, Breyer, Sotomayor, Kagan) or unconstitutional (Scalia, Kennedy, Thomas, Alito) under both provisions.
To understand why Ginsburg, Breyer, Sotomayor and Kagan were right about the constitutionality of the Act under the Commerce Clause (even though they lost five-to-four on that issue), I have reprinted below a heavily-edited and abridged (by me) excerpt from Justice Ginsburg's dissenting opinion on the Commerce Clause issue. In my view, it absolutely shreds the opposing view and, in any event, is an excellent primer on the question:
By any measure, the health care market is immense, accounting for 17.6 percent of our Nation's economy. Moreover, unlike the market for almost any other product or service, the market for medical care is one in which all individuals inevitably participate. Moreover, on average, an individual in the United States incurs over $7,000 in health-care expenses each year. To manage the risks associated with medical care -- its high cost, its unpredictability, and its inevitability -- most people in the United States obtain health insurance.
Not all U. S. residents, however, have health insurance. In 2009, approximately 50 million people were uninsured, either by choice or, more likely, because they could not afford private insurance and did not qualify for government aid. As a group, uninsured individuals annually consume more than $100 billion in health-care services.
Unlike markets for most products, the inability to pay for care does not mean that an uninsured individual will receive no care. Federal and state law, as well as professional obligations and embedded social norms, require hospitals and physicians to provide care when it is most needed, regardless of the patient's ability to pay. As a consequence, medical-care providers deliver significant amounts of care to the uninsured for which the providers receive no payment.
Health-care providers do not absorb these bad debts. Instead, they raise their prices, passing along the cost of uncompensated care to those who do pay. In response, private insurers increase their premiums, shifting the cost onto those who carry insurance. The net result: Those with health insurance subsidize the medical care of those without it.
The size of this subsidy is considerable. Congress found that the cost-shifting just described "increases family [insurance] premiums by on average over $1,000 a year." Higher premiums, in turn, render health insurance less affordable, forcing more people to go without insurance and leading to further cost-shifting. Congress therefore passed the individual mandate provision of the ACA to address an economic and social problem that has plagued the nation for decades.
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The Commerce Clause was the Framers' response to the central problem that gave rise to the Constitution itself. What was needed was a "national Government ... armed with a positive & compleat authority in all cases where [national] measures are necessary." (Quoting James Madison.) The Framers' solution was the Commerce Clause, which, as they perceived it, granted Congress the authority to enact economic legislation "in all Cases for the general Interests of the Union." (Quoting Alexander Hamilton.)
Consistent with the Framers' intent, we have repeatedly emphasized that Congress' authority under the Commerce Clause is dependent upon "practical" considerations. Until today, this Court's pragmatic approach to judging whether Congress validly exercised its commerce power was guided by two familiar principles. First, Congress has the power to regulate economic activities "that substantially affect interstate commerce." Second, we owe a large measure of respect to Congress when it frames and enacts economic and social legislation. When appraising such legislation, we ask only (1) whether Congress had a "rational basis" for concluding that the regulated activity substantially affects interstate commerce, and (2) whether there is a "reasonable connection between the regulatory means selected and the asserted ends."
Straightforward application of these principles would require the Court to hold that the individual mandate provision is proper Commerce Clause legislation. Beyond dispute, Congress had a rational basis for concluding that the uninsured, as a class, substantially affect interstate commerce. Not only do those without insurance consume billions of dollars of health care each year, but their inability to pay for a significant portion of that consumption drives up market prices, foists costs on other consumers, and reduces market efficiency and stability. Given these far-reaching effects on interstate commerce, the decision to forego insurance is hardly inconsequential or equivalent to "doing nothing."
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Rather than evaluating the constitutionality of the minimum coverage provision in the manner established by our precedents, THE CHIEF JUSTICE relies on a newly minted constitutional doctrine. The commerce power does not, THE CHIEF JUSTICE announces, permit Congress to "compe[l] individuals to become active in commerce by purchasing a product." THE CHIEF JUSTICE's novel constraint on Congress' commerce power gains no force from our precedent and for that reason alone warrants disapprobation.
But even assuming that Congress lacks authority under the Commerce Clause to "compel individuals not engaged in commerce to purchase an unwanted product," such a limitation would be inapplicable here. Everyone will, at some point, consume health-care products and services. Thus, if THE CHIEF JUSTICE is correct that an insurance purchase requirement can be applied only to those who"actively" consume health care, the minimum coverage provision fits the bill. More than 60% of those without insurance visit a hospital or doctor's office each year, and nearly 90% will do so within five years.
THE CHIEF JUSTICE draws an analogy to the car market. An individual "is not 'active in the car market,'" THE CHIEF JUSTICE observes, simply because he or she may someday buy a car. The analogy is inapt. The inevitable yet unpredictable need for medical care and the guarantee that emergency care will be provided when required are conditions nonexistent in other markets. That is so of the market for cars, and of the market for broccoli as well. Although an individual might buy a car or a crown of broccoli one day, there is no certainty she will ever do so. And if she eventually wants a car or has a craving for broccoli, she will be obliged to pay at the counter before receiving the vehicle or nourishment. She will get no free ride or food, at the expense of another consumer forced to pay an inflated price.
Underlying THE CHIEF JUSTICE's view that the Commerce Clause must be confined to the regulation of active participants in a commercial market is a fear that the commerce power would otherwise know no limits. As an example of the type of regulation he fears, THE CHIEF JUSTICE cites a Government mandate to purchase green vegetables. One could call this concern "the broccoli horrible." Congress, THE CHIEF JUSTICE posits, might adopt such a mandate, reasoning that an individual's failure to eat a healthy diet, like the failure to purchase health insurance, imposes costs on others.
Consider the chain of inferences the Court would have to accept to conclude that a vegetable-purchase mandate was likely to have a substantial effect on the health-care costs borne by lithe Americans. The Court would have to believe that individuals forced to buy vegetables would then eat them (instead of throwing or giving them away), would prepare the vegetables in a healthy way (steamed or raw, not deep-fried), would cut back on unhealthy foods, and would not allow other factors (such as lack of exercise or little sleep) to trump the improved diet.
When contemplated in its extreme, almost any power looks dangerous. The commerce power, hypothetically, would enable Congress to prohibit the purchase of all meat, fish, and dairy goods, effectively compelling Americans to eat only vegetables. Yet no one would offer the "hypothetical and unreal possibilit[y]" of a vegetarian state as a credible reason to deny Congress the authority ever to ban the possession and sale of heroin. THE CHIEF JUSTICE accepts just such specious logic when he cites the broccoli horrible as a reason to deny Congress the power to pass the individual mandate.
For the reasons explained above, the minimum coverage provision is valid Commerce Clause legislation.