The key to barring health insurers from denying applicants with pre-existing conditions, as Democrats and a fair number of Republicans in Congress say they would like to do, is to mandate health-insurance coverage. Otherwise, a large number of Americans might make the calculation that it would be cheaper to forgo insurance until they contracted a disease that was expensive to treat. This is one part of the health-reform debate that transcends the public option question, because it’s unlikely that either private insurers or the government could afford to accept customers with pre-existing conditions if there were no mandate.
But can Congress lawfully issue such a mandate? David Rivkin and Lee Casey, two former Justice Department officials from the Reagan era, argue here that it can’t. Rivkin and Casey speculate that Congress would cite its (often misused) power to regulate interstate commerce to justify issuing a mandate — or, more precisely, a high excise tax on uninsured Americans designed to coerce them into buying insurance:
But Congress cannot so simply avoid the constitutional limits on its power. Taxation can favor one industry or course of action over another, but a “tax” that falls exclusively on anyone who is uninsured is a penalty beyond Congress’s authority. If the rule were otherwise, Congress could evade all constitutional limits by “taxing” anyone who doesn’t follow an order of any kind—whether to obtain health-care insurance, or to join a health club, or exercise regularly, or even eat your vegetables.
Since the 1930s, the Supreme Court has been reluctant to invalidate “regulatory” taxes. However, a tax that is so clearly a penalty for failing to comply with requirements otherwise beyond Congress’s constitutional power will present the question whether there are any limits on Congress’s power to regulate individual Americans. The Supreme Court has never accepted such a proposition, and it is unlikely to accept it now, even in an area as important as health care.
Rivkin and Casey may or may not be correct about what the Supreme Court might do — which would of course depend heavily on which justices are serving at the time of any future legal challenge to any future insurance mandate; that’s a lot of conditionals. But they are correct that the Court cannot uphold such a mandate without also agreeing to a serious, and probably irreversible, expansion of the federal government’s power.