Obamacare: The ACA’s Individual Mandate and the Constitution

by: Thomas Cocchi, Staff Writer

The government shutdown, and the impending debt ceiling hit on October 17th, has come with renewed challenges from the Republicans in the House of Representatives and the Senate to the Affordable Care Act (“the Act”), commonly known as “Obamacare,” and, more specifically, to its individual mandate.  While these legislative challenges to the Act have been brought by Republican members of Congress, urged on by their supporters on the right, reactions to these continued challenges by Democrats, and their supporters on the left, have quite often referred to the Act as “settled” law.  Those in favor of the Act and its general policy background rely not only on the Act’s passage through Congress, but also on a Supreme Court decision confirming its constitutionality.  The Supreme Court’s decision in NFIB v. Sebelius established the constitutional argument for the Act, surprisingly relying on an opinion authored by conservative Chief Justice John Roberts.  In the Sebelius majority opinion, Chief Justice Roberts addressed the two main government arguments for the constitutionality of the individual mandate from the ACA.  Chief Justice Roberts began with an acknowledgement that his own argument would seem to stretch the reasoning of the court in favor of the constitutionality of the statute, stating that it is not the Court’s job to “protect the people from the consequences of their political choices.”

The first argument raised in favor of the ACA’s individual mandate was based on the Commerce Clause.  Those familiar with Commerce Clause jurisprudence in recent history are well aware of its expansion to allow Congress to regulate many activities previously left to the states.  However, Chief Justice Roberts declined to expand the use of the Commerce Clause as a basis for legislation any further, and rejected the government’s argument.  The Commerce Clause, Chief Justice Roberts explained, did not give Congress unfettered ability to regulate the economy by any factor they found useful.  Roberts explained that “[c]onstruing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.”[1]  Chief Justice Roberts thereby rejected the government’s Commerce Clause argument, stating that the Affordable Care Act would be unconstitutional under a purely Commerce Clause analysis.  The full significance of Chief Justice Robert’s halting of the stampeding bull that was Commerce Clause jurisprudence is of too much significance to cover effectually in the limited scope of this posting.  Therefore, it must suffice to say that some Constitutional Law scholars have seen Chief Justice Robert’s reigning in of the Commerce Clause power in Sebelius, as equivalent in significance to the actual outcome of the case itself.[2]

Next, Chief Justice Roberts turned to the issue of the individual mandate as being an exercise of Congress’s authority under the taxing power. Chief Justice Roberts admitted that “Congress’s decision to label this exaction a ‘penalty’ rather than a ‘tax’ is significant because the [ACA] describes many other exactions it creates as ‘taxes.’”[3]  Even with this distinction within the law itself, Chief Justice Roberts nevertheless saw room to interpret the individual mandate’s penalty as a tax.  In order to rationalize ignoring the language Congress chose to use, Chief Justice Roberts relied on the Supreme Court’s precedent from Bailey v. Drexel Furniture Co., which found that a “tax” on goods made in factories that employed child labor was actually, in its effect, a “penalty.”  The argument in Drexel is a classic case of the court reigning in Congress’s attempts to expand its power by creative word use.  However, Drexel had not previously been used to make the opposite conclusion in saying that Congress was in fact operating under a power it was not invoking in the language of a bill.  Chief Justice Roberts mirrored the three-part analysis that the Court employed in Drexel to show that the “penalty” Congress had specifically created under the individual mandate of the ACA, could actually be construed as a “tax” in order deem the law as constitutional. Continuing to insist that the penalty for non-compliance under the individual mandate of the ACA was actually a tax for the next several pages, Chief Justice Roberts eventually concluded with a disclaimer regarding the majority decision.

Perhaps to save face with his conservative colleagues, Chief Justice Roberts figuratively washed his hands of the consequences of the decision in his conclusion, asserting that the majority sought only to enforce the limits on the powers of the federal government, and that “the court does so today.  But the Court does not express any opinion on the wisdom of the [ACA].  Under the Constitution, that judgment is reserved to the people.”[4]