Layman’s Guide to Obamacare Decision by Josie Wales

Judge Henry Hudson’s recent decision in Virginia v. Sebelius rejected the notion that Obamacare’s individual mandate is constitutionally justified as either a regulation of interstate commerce or a tax for the general welfare.

First we will examine the individual mandate as a regulation of interstate commerce, but some basic background of Commerce Clause jurisprudence is in order. In Perez v. United States (1971), the Supreme Court outlined three kinds of commerce for which Congress could regulate: (1) channels, (2) instrumentalities, and (3) activities which substantially affect interstate commerce. If you have not seen these terms within the confines of the Constitution it is because they do not appear. However, this understanding of the commerce clause has been drilled into the minds of attorneys for the last 40 years. Frankly, Commerce Clause jurisprudence needs a re-examination, regardless of the health care issue.

A century of questionable precedents guides the courts. One of the most egregious examples of government overreach occurred in Wickard v. Filburn (1942). A farmer that grew more than his government mandated allotment of wheat, for personal use, was deemed to have substantially affected interstate commerce. Interestingly, a similar case came up in 2005 involving (pay attention liberals) cultivation of marijuana for personal use in California, and in compliance with state law. In Gonzalez v. Raich (2005), Justice Clarence Thomas dissented from an opinion confirming the federal government’s regulatory power over personal cultivation and use (yes, you read that correctly). He rather presciently penned this statement:

If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything – and the Federal Government is no longer one of limited and enumerated powers.

While the Supreme Court has slightly edged away from the expansive view of the Commerce Clause, limiting interstate commerce regulation to “economic activity” in cases like United States v. Lopez (1995) and United States v. Morrison (2005) , the balance still falls heavily in favor of the federal government when regulating interstate commerce, which brings us to the present case.

The government’s case hinges on the third prong of interstate commerce, substantial affect.

No person can guarantee that he will never incur a sudden, unanticipated need for expensive care; and very few persons, absent insurance can guarantee that they will not shift the cost of that care to the rest of society.

The problem with this statement should seem obvious on its face; one cannot prove a negative. Also of note, the government relies on both Wickard and Gonzales, which tells us where Justice Thomas will stand on the issue (in case anyone was wondering). Virginia Attorney General Ken Cuccinelli brings the issue back home by pointing out that this is about the individual mandate, and not whether Congress has some role in health insurance policy.

Importantly, it is not the effect on individuals that is presently at issue – it is the authority of Congress to compel anyone to purchase health insurance.

The government counters with the Necessary and Proper Clause, otherwise known as the Elastic Clause. Essentially, because the individual mandate is necessary for the overall regulatory scheme imposed by Congress it should be deemed constitutional. This is a rather complicated issue made all the more complex by the numerous inferences utilized over the last century of Commerce Clause jurisprudence (Randy Barnett presents a nice summary at The Volokh Conspiracy). Needless to say, the government’s view would allow imposition of extra-constitutional provisions to otherwise constitutional regulatory schemes.

At any rate, Judge Hudson boils the issue down to the distinction between activity and inactivity. In Wickard and Gonzales, individual economic activity resulted in controversy. Under Obamacare, individual economic inactivity results in controversy. Government regulation of inactivity would be unprecedented. Drawing this distinction, Judge Hudson drives a stake into the heart of Obamacare.

Now we can deal with the individual mandate as a tax. This argument does not hold much water since the government denied the individual mandate was a tax from the beginning. The argument that it was a tax only emerged after the government realized there were serious constitutional issues. Judge Hudson rather amusingly points out that Congress grounded Obamacare in interstate commerce regulation, within the very act!

The individual…[mandate] is commercial and economic in nature, and substantially affects interstate commerce….

Additionally, a delineation is made between a tax and a penalty. Obamacare specifically used the term “tax” for other provisions, but did not for the individual mandate. The courts deem this deliberate, so the government cannot claim the individual mandate is a tax after the fact. Furthermore, the individual mandate does not generate revenue (because everyone follows the law, ideally), but rather exacts a penalty for failure to abide by the regulatory scheme.

The government wraps itself in constitutional language and legalese when presenting its case for Obamacare, but none of this fools the discerning eyes of a competent judge. Consider yourself armed with the fundamental arguments to deflate progressive minds because Judge Hudson’s reasoning will be rehashed by the competent justices on the Supreme Court