Various groups, including the Attorneys General of twenty-six states, the National Federation of Independent Businesses, and several individuals, have sued the federal government over parts of the Affordable Care Act. Specifically, they've alleged that the mandate requiring individuals to purchase health insurance is unconstitutional -- it overreaches the enumerated powers of the federal government. The case was recently accepted by the Supreme Court, with oral argument scheduled for March and a decision likely by the end of June. If the Court accepts the plaintiffs' arguments, they could strike down the individual mandate (which could create huge moral hazard problems and be catastrophic for the insurance industry) or strike down the law in its entirety.
As the excitement builds for the coming arguments, Meghan McCarthy of the National Journal issued a call for opinions and predictions on the final fate of the individual mandate. Here's our take:
The final ruling on the individual mandate is tough to forecast, but we're fairly confident that the Court will not strike it down. The challenge is based on whether Congress's power to regulate interstate commerce extends far enough to allow the federal government to require all citizens to purchase health insurance or pay a penalty.
The ruling will depend in part upon how the Court sees uninsurance: is it an active choice for an individual to go bare, in effect to self-insure, or is it due to inaction? The precise definition of action and inaction is a bit murky, but here’s how the argument goes. If going without health insurance is inaction, the Court has to deal with the messy question of whether Congress can regulate inaction when it affects interstate commerce. (Throughout the case, opponents of the Commerce Clause justification for the individual mandate have asked the government just how far Congress's power stretches. Their favorite example has been the purchase of broccoli: can Congress require everyone in the country to buy broccoli? So far, the government has not said "no" -- after all, choosing to buy, or not buy broccoli affects a whole series of interstate markets for leafy green commodities. We won't weigh in on the validity of that argument, but we agree with the Cato Institute's Ilya Shapiro that the government's inability to establish a limiting principle for the Commerce Clause may prove problematic when this argument reaches the Supreme Court.
We actually don't think the case needs to address the issue of action versus inaction at all. In the case of health care and health insurance, there simply is no inactive choice. Going without health insurance is inherently different from going without broccoli, because everyone has some interaction with the health care system at some point. Even if you choose not to buy health insurance, there is a good chance that you will need health care at some point. You are in a car accident, you get brain cancer, you fall down your stairs and break your leg. Since virtually everyone will, at some point, need health care (and must therefore have a way to pay for it), choosing to go without private or public insurance is, in fact, choosing to self-insure. Since choosing self-insurance is an action that affects interstate commerce, it's clearly within Congress's power to regulate.
Alternatively, the Court might just accept the notion that the mandate is a tax (since its only enforcement mechanism is a penalty), in which case it is unambiguously within Congressional power. That might be more palatable to Justices uncomfortable with striking down the law, but who also don't believe in the expansive Commerce Clause power that the government's position implies.