Analysis Finds Mandate Constitutional
By Joyce Frieden, News Editor, MedPage Today
Published: September 15, 2010
A major sticking point for the new healthcare reform law -- the mandate that Americans purchase health insurance -- does not violate the Constitution, according to an analysis published by a medical ethics organization.
"The pivotal constitutional concern is that the government will penalize individuals for failing to buy health insurance –- for 'doing nothing,'" Lawrence Gostin, professor of global health law and faculty director of the O'Neil Institute for National and Global Health Law at the Georgetown University Law Center, wrote in the September-October issue of the Hastings Center Report, which is published by the Garrison, N.Y.-based bioethics center.
Critics of the new law -- including several states that are mounting legal challenges -- argue that an individual decision not to purchase health insurance has negligible economic consequences, with purely personal and intrastate consequences.
But Gostin challenged that argument writing, "Nothing could be farther from the truth. In terms of health, individuals never really 'do nothing.' Uninsured individuals self-insure, rely on family, and cost-shift to hospitals, the insured, and taxpayers. The cumulative economic effects are vast."
Gostin explained that healthcare currently captures more than 17% of the gross domestic product, and involves many products that move across state lines: pharmaceuticals, medical equipment, insurance claims, and even providers themselves. That makes healthcare a part of interstate commerce, which the federal government is permitted to regulate under the "commerce clause" of the Constitution, he argued.
Earlier this week Obama administration lawyers appeared in a federal district court in Florida to argue that a lawsuit filed by that state and 19 others over the individual mandate be dismissed.
The arguments made by the two sides echoed the points raised in Gostin's article, with lawyers for the administration arguing that overturning the mandate would disrupt the federal government's ability to regulate interstate commerce, and lawyers for the states arguing that the federal government is overreaching by attempting to punish individuals for their inactivity when it comes to purchasing health insurance, according to an article by the Associated Press.
Judge Roger Vinson indicated that he is likely to dismiss some parts, but not all of, the states' lawsuit, the article said. Vinson said he would issue a ruling by Oct. 14. A similar lawsuit filed in Virginia has been allowed to proceed.
The new law enforces the individual mandate though a federal tax, enabling Congress also to rely on its enumerated power to raise taxes for the general welfare, he continued. "The tax will generate revenues to help support healthcare reform. But it will do more than that by creating incentives to purchase health insurance."
Critics claim the tax penalty was devised to avoid the political costs of raising income taxes to pay for social programs.
"But the state frequently and appropriately raises revenue for beneficial activities by taxing risky behaviors like smoking, drinking alcohol, and gambling," Gostin argued. "By doing so, the tax pays for a valuable service while discouraging unhealthy behavior -- exactly what Congress intended with the health insurance mandate."
Lawsuits, including those in the Florida district court, are expected to reach the "conservative-leaning, business-friendly" Supreme Court sometime next year, according to Gostin.
If opponents of the individual mandate prevail there, "comprehensive healthcare reform could unravel," he predicted.
Although the mandate could theoretically be separated from the rest of the law, "the sponsors rightly saw it as integral to reform. Private insurance companies could not, and would not, cover high-risk individuals unless they could spread the costs among a wide pool. And unless young, healthy people were given incentives to join the pool, they would opt out," as many do now.
Gostin concluded that the individual mandate "is not an unjustified limit on freedom, but rather is vital to a decent society."