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The Supreme Court’s ACA Decision: Reaffirming Broad Congressional Power



June 29th, 2012

The vote may only have been 5-4, and a majority may have rejected the government’s Commerce Clause argument, but the Supreme Court’s decision on the Affordable Care Act was a strong verdict for the power of Congress to regulate on behalf of the public welfare.

The taxing power’s breadth. First, the Court reminded us about the breadth of the taxing power. In previous cases, the Court had held that as long as a tax serves the general welfare and will raise some revenues, it is valid. It doesn’t matter if the tax is primarily designed not to raise revenue but to encourage desirable behavior that the government might not be able to mandate directly (like buying insurance or quitting smoking). Rather, the tax only has to have revenue-raising as a secondary purpose.

The individual mandate easily satisfies the two requirements of the taxing power. It will raise revenue because an estimated four million people will pay four billion dollars in mandate taxes every year rather than purchase insurance. The mandate also will serve the general welfare by protecting against the free rider problem created by the ban on preexisting conditions clauses. Without the mandate, many people would wait until they became sick to buy their health care insurance.

To be sure, the Court was careful to indicate that not all mandates can be justified under the taxing power. What is critical about the health care mandate is the fact that it operates like many other tax incentives. Functionally, the mandate is the same as an income surcharge that everyone has to pay unless they can show that they carry a health insurance policy. Moreover, there is no penalty for failing to carry health care coverage other than the tax. Once people pay the tax, they are deemed, as Chief Justice John Roberts, Jr., wrote, to “have fully complied with the law.” They are not prosecuted, nor are they viewed as lawbreakers.

What about the fact that Congress intentionally relied on its Commerce Clause power rather than its taxing power to pass the individual mandate? As the Court had held previously, Congress is not required to correctly identify the power upon which a law rests. If a power can authorize a statute, it does authorize the statute.

Limits on the commerce power that in practice leave Congressional regulatory authority intact. Ostensibly, the Court imposed some limits on the Commerce Clause power. Congress had justified the individual mandate under that power, and most of the debate over the individual mandate had centered on the Commerce Clause argument. According to the Court, mandate critics were correct to assert that Congress may use its commerce power only to regulate people who have chosen to buy or sell something, Congress may not force people into the marketplace to buy insurance or other products that they do not want to buy.

As a practical matter, however, Congress still enjoys broad authority to make us buy things we might not want to buy. And in fact, Congress has done so many times on behalf of public health and safety. You cannot buy a car without seat belts and air bags, and you cannot buy a mobile home without smoke alarms. If Congress really wanted to make us buy broccoli, it could require groceries to include broccoli with every checkout and restaurants to include broccoli with every order. Of course, Congress would never pass such a law, but the barriers to doing so are political, not constitutional. The Court’s decision on the Affordable Care Act does not change that fact.

In the final analysis, the Supreme Court followed the principle established nearly 200 years ago in a key decision about limits on the exercise of congressional power. In Gibbons v. Ogden, the Court recognized that the Constitution leaves control of Congress largely to the voters. If we do not like the mandates that Congress passes, we can vote our elected officials out of office. And in fact, that is exactly what happened in November 2010 in response to the individual mandate.

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