Markets and the ACA: Why the Supreme Court Will Uphold the ACA

by Beverly Mann

The link to the ACA litigation blog article I discuss is here .

‘Markets’ and the ACA: Why the Supreme Court Will Uphold the ACA

In my post last week about the activity/inactivity canard on which the challengers to the constitutionality of the ACA claim, I wrote:

In his [blog] post, [high-profile rightwing law professor Randy] Barnett pointed out something that was not in the other reports I’d read about [last month’s oral arguments in the 4th Circuit Court of Appeals]: that in a lengthy exchange with [acting Solicitor General Neal] Katyal, [Judge Diana Gribbon] Motz indicated that she buys the activity/non-activity distinction, because she believes the definition of the word “regulate” means “regulate activity.” She kept insisting that if the failure to buy health insurance is inactivity rather than activity, then, under her understanding of the definition of the word “regulate,” Congress couldn’t regulate it.

Katyal flubbed the response to this. Partly. He noted the Supreme Court’s most recent relevant Commerce Clause/Necessary and Proper Clause decision, Gonzales v. Raich, a 2005 opinion that held that the federal statute enacted under the Commerce Clause powers that criminalizes the growing and use of marijuana applies even to homegrown marijuana that is not sold even intrastate, much less in interstate commerce, and that is just for the personal use of the grower. The rationale: that even those actions impact the interstate market for marijuana. Since the Commerce Clause gives Congress the authority to regulate interstate markets, Congress can, under the Necessary and Proper Clause, regulate things that otherwise cannot be regulated under the Commerce power if those things impact the interstate market.

Motz, though, missed the point. Growing marijuana is an activity, she pointed out, so how is Raich relevant to whether Congress can, under the Commerce Clause together with the Necessary and Proper Clause, regulate inactivity, she wanted to know? Well, um, maybe that what’s relevant isn’t the particular reason why the Commerce Clause alone isn’t enough and must be aided by the Necessary and Proper Clause, but instead that if something—whether activity only within a state’s boundary, or instead inactivity, or instead whatever—impacts a market that Congress has the power under the Commerce Clause to regulate, then Congress has the constitutional authority to regulate it as necessary and proper under the Commerce Clause.
Katyal apparently was too dumbfounded to explain this.

The Commerce Clause gives Congress the power, in the Constitution’s precise words, “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” It’s one of the “enumerated,” or specified, powers that the Constitution gives Congress, and which the Necessary and Proper Clause augments.

Last Thursday, Santa Clara U. law professor Brad Joondeph, who has a blog called “aca litigation blog,” wrote trenchantly as the opening paragraph of a lengthy post titled “The regulated activity”:

Much ink has been spilled over whether Congress–using its commerce power alone, or its commerce power in conjunction with the Necessary and Proper Clause–has the authority to regulate “inactivity.” But there is a logically prior question–a question that is often quite tricky in enumerated powers cases–that must be resolved before reaching the inactivity issue. Namely, one has to define exactly what conduct Congress is regulating in the challenged provision.

[A] critical question that every judge must confront (or at least every judge reaching the merits) is whether the minimum coverage provision (a) regulates conduct in the health insurance market (as the challengers contend), or (b) regulates conduct in the health care services market (as the United States maintains).

In a direct and immediate sense, of course, the individual mandate regulates behavior in the insurance market. But one can easily argue (as with §4306 above) that what it really regulates is the payment for services in the health care service market. Sure, the provision, when examined in isolation, only directly concerns the purchase of health insurance. But the broader scheme, taken as a whole, shows that what Congress was actually regulating–of which the individual mandate is only a part–is the financing of health care services. Congress logically cared whether people carry health coverage not for its own sake, but due to its implications for the financing of services in the health care market, the ultimate object of its regulation.

So which is it? Which market does the minimum coverage provision actually regulate?

The larger point, he says, is that

the relevant “regulated activity”—or, phrased differently, the relevant regulated market—is quite open to debate [and that the] fact that the challenged provision only regulates a particular activity directly (… the decision whether to acquire health insurance in the case of the ACA) does not answer the question. The regulated activity or market, for purposes of evaluating whether the challenged provision is within Congress’s enumerated powers, may well be different than the conduct that the provision directly governs. Answering the critical question is not as simple as examining the empirical realities of the challenged provision by itself.

He’s spot-on. But I think it would be profoundly disingenuous for any judge to say that the relevant market is simply the health insurance market. The purpose and the effect of the ACA, including the mandate provision, clearly is to regulate the method by which healthcare is funded in this country.

Joohdeph ends his post by saying that the distinction between regulation of the market for health insurance and regulation of the market for healthcare is “obviously of enormous importance.” He writes:

For if the relevant market is only that for health insurance, the minimum coverage requirement looks truly unprecedented (and constitutionally problematic). But if the relevant market is that for health care services, then what Congress is regulating is a market in which virtually every American activelyparticipates–and the minimum coverage provision is merely regulating the commercial terms on which thatactive participation occurs. And this framing, of course, makes it seem well within Congress’s authority to regulate interstate commerce.

He’s right, but only if, as he says earlier, the market for health insurance is defined so narrowly that health insurance is viewed as a commodity, a product, independent of the product’s purpose and effect. In the same way, some argue that platforms like online casino paypal blur the lines between entertainment and financial risk, treating them merely as commodities without addressing the potential consequences for consumer protection. And then, the constitutional issue would not, I think, be whether Congress has the authority under the Commerce Clause, aided by the Necessary and Proper Clause, to regulate the health insurance market, but instead whether this violates some other constitutional limitation. You know: the slippery-slope-to-government-compelled-consumption-of-broccoli argument.

Ultimately, the Supreme Court is unlikely, in my opinion, to say that the relevant market is health insurance rather than healthcare. That would pretty much require them to do what they did in Bush v. Gore: pronounce the ruling good for that case only. Which is why I think the ACA will survive the constitutional challenge. But if it doesn’t, it’s likely to be one a 5-4 slippery-slope-to-government-compelled-consumption-of-broccoli ruling.

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The most important of the ACA-case appellate arguments is tomorrow afternoon in Atlanta, at the 11th Circuit Court of Appeals. This is the appeal in the case in which 26 states and one private organization are the plaintiffs, and in which the trial-level judge, Roger Vinson, held the entire ACA unconstitutional because, he said, the mandate is too essential to the entire statute to strike that provision down without also striking down the entire ACA. Paul Clement, who, it was announced today, will be representing Arizona in defending the constitutionality of the most draconian of Arizona’s recently enacted immigration-law statutes, and who is representing six Republican House members in defending the constitutionality of the Defense of Marriage Act, is the states’ lead attorney. (Looks like a pattern here, for Clement.)