The Obama administration’s already tortured logic regarding the Constitution’s Commerce Clause and PPACA’s individual mandate has been dealt several body blows so far.
Three of the five federal courts that have ruled on the merits of the constitutional challenges to the law have ruled that Congress does have the authority to compel individuals to purchase private health insurance. Their analysis boils down to the legal propriety of congressional interpretation of the Commerce Clause, which states that Congress has the authority, “to regulate Commerce … among the several States ...”
The arguments in support of PPACA’s individual mandate essentially boil down to the fact that a decision by a person to not purchase insurance is an economic action that impacts “commerce among the states.”
Proponents of PPACA’s individual mandate point out that when millions of people make this economic decision, health care systems face increased strains and millions — if not billions — of dollars are transferred to taxpayers and private purchasers of health care as a result.
This logic reflects the most expansive reading of the Commerce Clause in our nation’s history. As federal judge Roger Vinson pointed out in his opinion striking down PPACA, not purchasing health insurance is, by definition, inactivity and inactivity has never been within the purview of Commerce Clause jurisprudence.
If one deems the activity (or inactivity) taking place between one’s ears as economic action contemplated by the Commerce Clause, then the federal government would have the authority to compel anybody’s thought patterns since such thoughts are what lead to or do not lead to economic decisions and the actions that follow.
Recently, as if this strained reading permitting Congress to regulate mental activity were not on thin enough ice, a new element of analysis has emerged from professors at Stanford and Columbia University and senior fellows from the Hoover Institute.
They conclude that there is no credible evidence of cost shifting of any significant consequence, either intrastate or interstate, when individuals refuse to purchase health insurance. Furthermore, PPACA is more likely to enhance cost shifting than if no law were passed at all. As they state, in part: “A study conducted by George Mason University Prof. Jack Hadley and John Holahan, Teresa Coughlin and Dawn Miller of the Urban Institute, and published in the journal Health Affairs in 2008, found that so-called cost shifting raises private health insurance premiums by a negligible amount. The study’s authors conclude: 'Private insurance premiums are at most 1.7 percent higher because of the shifting of the costs of the uninsured to private insurance.’ For the typical insurance plan, this amounts to approximately $80 per year.
“The Health Affairs study is supported by another recent peer-reviewed study that focused exclusively on physicians. That 2007 study, authored by Massachusetts Institute of Technology economists Jonathan Gruber and David Rodriguez and published in the Journal of Health Economics, found no evidence that doctors charged insured patients higher fees to cover the cost of caring for the uninsured.” (Wall Street Journal, March 11, 2011.)
PPACA proponents now find themselves in a rather precarious situation. They are being effectively outflanked on three significant fronts:
1) Likely voters now favor repeal of the law by a 29% margin (Rasmussen poll, March 14, 2011).
2) They must rely on the most expansive reading of the Commerce Clause in the nation’s history by arguing that a person’s mental activity falls within congressional purview.
3) Experts in the field are shining light on the fact that the linchpin of their argument, that not purchasing insurance dramatically impacts health care costs to all Americans, has no significant factual basis.
Gottwals is general counsel for Liberty Benefit Insurance Services and teaches employee benefits at the University of California. He can be reached at
