December 1, 2010

New health care decision

By New health care decision

Author: Timothy Sandefur

Yesterday, a federal judge Norman Moon in Virginia dismissed a lawsuit challenging the Obama Administration’s health insurance law. This makes the sixth decision rendered (after federal judges in Florida, Virginia, and Ohio, denied motions to dismiss, and judges in California and Michigan granted motions to dismiss). Yesterday’s decision came in a lawsuit filed by Liberty University, which argued not only that the Individual Mandate exceeded the government’s power to regulate commerce, but also that the Mandate violated the First Amendment’s religion clauses, the right of free association, the principle of equal protection, the Republican Guarantee Clause, and the federal Religious Freedom Restoration Act, among other things.

The decision is a long and important one. First, on the procedural rules, the court rejected the government’s argument that the plaintiffs lacked standing because the penalties for not buying insurance only come into effect in 2014. The government is making the same argument in PLF’s own challenge to the law. The court held that the plaintiffs are injured now, and can sue now, without having to wait. It also rejected the government’s argument that the court was barred from hearing the case by the Tax Anti-Injunction Act—another argument the government is using in our case.

As to the commerce clause argument, the court held that the Individual Mandate is constitutional under the commerce clause, because

there is a rational basis for Congress to conclude that individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market.  The conduct regulated by the individual coverage provision—individuals’ decisions to forego purchasing health insurance coverage—is economic in nature….  Far from “inactivity,” by choosing to forgo [sic] insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance….  Because of the nature of supply and demand, Plaintiffs’ choices directly affect the price of insurance in the market, which Congress set out in the Act to control.

I’ve bolded the last sentence, because it indicates how extreme the federal government’s position is in these cases—and how extreme the legal precedent on this issue.  If Congress can regulate any act which “affects” the “price” of any product through the operation of “supply and demand,” then Congress can regulate absolutely everything, without any limit whatsoever. All decisions—whether apparently economic or not—have some effect, via supply and demand, on the price of products or services in the market.

Under this rationale, Congress really could force every American to eat his vegetables or drink a tall glass of milk, or buy a car from government-owned General Motors, or to buy a book or to attend a preferred church or have an abortion or not have an abortion, because all of these are acts that have some effect, via supply and demand, on the price of products and services in the marketplace. It’s no answer to say that the First Amendment or the Fifth Amendment take some of these things off the table, because the same arguments can be made in the realm of health care—the Ninth and Tenth Amendments, and the principle of limited powers in Article I, also bar Congress from taking over the health care market. If one can ignore these constitutional principles when it comes to Congressional regulation of “supply and demand,” then one might just as easily ignore other principles as well.

There are a number of other interesting elements in Judge Moon’s opinion, and I will blog about them when I have more time.

What to read next