Supreme Court Year in Review
Entry 17: The Commerce Clause was clearly enough to uphold the Affordable Care Act.
Dear Walter, Dahlia, and Emily,
I am not surprised that the health care law was upheld (except for the Medicaid provision, and I don't think that ruling will have much effect) by the Supreme Court. I was confident, despite the shellacking given the solicitor general at the oral argument and the Intrade odds that were so strongly predictive of invalidation, that the law would be upheld and that Chief Justice Roberts would write the majority opinion. But I thought the vote would be 6-3, with Kennedy joining Roberts and the liberal wing, and that the ground would be the commerce power. Not that there is anything wrong with upholding the law under Congress' power to tax.
The question of whether an exaction is a tax arises mainly in cases under the Tax Injunction Act, which forbids federal courts to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law,” provided that an adequate remedy is available in the state courts. I happened to write an opinion for my court a few years ago in which the issue was whether a pair of Illinois statutes that required casinos to deposit 3 percent of their revenues in a segregated state fund—the “Horse Racing Equity Trust Fund”—for disbursement to the racetracks, for the purpose of increasing winners’ and runner-ups’ purses and improve the tracks, imposed a tax within the meaning of the Tax Injunction Act, and we held that it did, even though the exaction was not called a tax. We pointed out that it was not called a tax because "tax" has become a dirty word (this I believe is one of the psychological consequences of the economic depression in which the nation finds itself), which is the same reason the tax in the health care law on people who don't buy health insurance is not called a tax.
But it is a tax. The health care case didn't involve the Tax Injunction Act, but a similar statute, the Anti-Injunction Act, applicable to federal taxes (it forbids enjoining the assessment of such taxes, thus relegating the taxpayer to a suit for refund); the court held that Congress didn't intend that act to apply to the health care law. But it upheld the penalty for failing to buy health insurance on the sensible ground, similar to the approach taken under the Tax Injunction Act, that though they called it a penalty, it is functionally a tax rather than a fine or a fee.
I thought the court would uphold the "mandate" (that is, the requirement, backed up by the tax or penalty, of buying health insurance) on the basis of the Commerce Clause because it is obvious, or at least seemed and seems obvious to me, that the requirement is within Congress' power conferred by Article I of the Constitution to regulate interstate commerce, because respected conservative lower-court judges (Judges Silberman and Sutton) had voted to uphold the mandate, and because invalidating it, necessarily on (as it seemed to me) flimsy grounds, and by a 5-4 vote (the five conservatives versus the four liberals) during an election year, would look like taking sides in the campaign. It would give President Obama an opening to run against the Supreme Court. It would confirm the widespread opinion of the "Roberts Court" as being the conservative mirror image of the Warren Court. It would be bad for the court, and a chief justice is by virtue of his position the justice most concerned with the court's power and prestige as an institution. The other justices have a greater incentive than he to trade off the court's power and prestige against their own influence and prestige, which often can be enhanced by an oppositional posture.
The health industry is of course an interstate business; there is a continuous flow of health insurance payments, health insurance reimbursements, drugs, doctors, patients, donations to hospitals, research money, etc. across state boundaries. Congress' regulatory power under the Commerce Clause is not limited to direct control of an interstate transaction; it includes the regulation of activities that affect an interstate industry, with "activities" including inactivity. The public accommodations provisions of the Civil Right Act of 1964 were upheld on the basis of the commerce power, even though the provisions required hotels and other places of public accommodation to do something—namely serve black travelers—that they didn't want to do, to force them, in short, to engage in interstate commerce they didn't want to engage in. And so it is with requiring drivers to be licensed—they would prefer not to have to pay a license fee. Of course they can avoid the fee just by not driving, but tell Americans not to drive and you might as well tell them cut off their feet in order to escape sales tax on shoes.
The young people who refuse to buy health insurance because they don't expect to get sick and if they do go to emergency rooms—and are billed, but just try collecting!—are free riders, like draft dodgers. They increase health costs for the rest of us.
The chief justice, echoing Justice Scalia's "broccoli" comment at the oral argument, rejected (as did the four dissenters, and so that is now the view of a majority of the justices) the Commerce Clause ground for the mandate, saying that to accept that ground would mean that "Congress could address the diet problem by ordering everyone to buy vegetables." This argument, reassuring though it is to our obese population, confuses separate constitutional provisions. The Commerce Clause would empower Congress to order everyone to buy vegetables, because the market for most vegetables is interstate, but the "liberty" protected against the federal government by the Fifth Amendment would doubtless be interpreted to forbid such an imposition, just as it would be interpreted to forbid a federal law requiring everyone to be in bed with the lights out by 10 p.m. in order to economize on the use of electricity and, by doing so, reduce carbon emissions from electrical generating plants.
I am surprised, finally, by the lifelessness of the joint dissenting opinion.
Richard A. Posner is a judge, U.S. Court of Appeals for the 7th Circuit, and a senior lecturer at the University of Chicago Law School.