*1 FLORIDA, through AT of State GENERAL, of State South
TORNEY Attorney through
Carolina, by and Nebraska, by and
General, of State General, Attorney of
through State Attorney
Texas, through Gen by and through Utah, by
eral, State General, al., Plaintiffs-
Attorney et
Appellees-Cross-Appellants,
v. OF DEPARTMENT
UNITED STATES SERVICES, AND
HEALTH HUMAN Depart
Secretary the United States Services, Human Health and
ment of Department of the Trea
United States Secretary
sury, of the United States Treasury,
Department United Labor, Department of Secre
States Department
tary of the United States Labor, Defendants-Appellants-
Cross-Appellees. 11-11021, 11-11067.
Nos. Appeals, States Court
United
Eleventh Circuit.
Aug. *4 Evans, Walsh,
FL, R. & Joseph Evanns Hills, CA, Beverly Plaintiffs-Appellees. for NE, Lincoln, Spohn, Jean for Katherine State of Nebraska. Austin, TX, Cobb, III,
William James for of Texas. State Beckenhauer, Kaersvang, Dana Eric B. Kennedy, Katyal, Kumar Brian G. Neal Klein, Chaifetz, L. B. Alisa Samantha Justice, Stern, Dept, B. Civ. Mark DC, Div., Staff, De- Washington, App. fendants-Appellants. Bobroff, Law Nat. Citizens
Rochelle Sr. Ctr., Wydra, B. Elizabeth Constitutional Ctr., Millhiser, Accountability Ian For Ctr. *5 Horton, Philip Arnold & Progress, Am. Porter, LLP, Cohen, R. AARP Stuart Lit., Mayer Kimberly, Michael B. Found. Brown, LLP, Bland, Jr., Frank Pub. Paul Justice, PC, Stetson, Hogan E. Catherine LLP, Lovells, Dellinger, Walter Estes US Lamken, MoloLamken, III; Jeffrey A. Blalack, LLP, II, O’Melveny K. Lee & Gates, LLP, Suda, Molly K&L Myers, Jaffe; Klukowski, Kenneth Alan Erik S. Council, Cory L. An- Family Research P., drews, Found., El- Legal Wash. John wood, Vinson, Elkins, LLP, F. & Hans Inst., Bader, Ilya Competitive Enterprise Inst., David Cato Shapiro, Rittgers, Kirk, Cooper, & Steven Cooper J. Charles Dechert, LLP, Bradbury, Engel, Steven Rosman, E. for Individual Michael Ctr. Severino, Lynn Judicial Rights, Carrie Peterson, Network, Michael D. Crisis DC, Yager, Geof- Washington, McGuiness Dean, Hobbs, Strauss, Strommer, frey D. Dubanevich, Walker, Dept, of Keith S. Or. Rohlfs, Vilhauer, Justice, Kurt Chernoff PLLC, Clement, Bancroft, Lee D. Paul Portland, OR, Hirth, J. Andrew Jefferson Grossman, Baker & Casey, Andrew Alfred MO, Weissglass, Altshuler City, Jonathan Rivkin, Hostetler, LLP, Michael David B. LLP, Francisco, CA, Berzon, San John Katsas, Carvin, C. Kevin Anthony Gregory Boston, MA, John Stew- Stephan, Michael Marshall, Mooppan, Hashim Jones M. Mills, PA, Firm, Gregory Mills J. art DC, Ma- Washington, Douglas Scott Day, Annino, Philo; Giuseppe FSU Col- David Paolo kar, Timothy Joseph Jacquot, W. Law, Tallahassee, FL, Per- Tallahassee, Osterhaus, Jane Winship, lege Blaine H. kins, Program, Found., Law Daniel A. Pac. Chapel Himebaugh, Legal Nat. Health Hill, NC, Berger, Bellevue, WA, J. Adam Schroeder for Amici Curiae. Bender, Seattle, WA,
Goldmark Melissa Sch.,
Hart, University of Colorado Law White, CO,
Boulder, Lawrence Edward III, Justice, Law & Ann Am. Ctr. for DUBINA, Judge, Before Chief Arbor, MI, Lechner, J. Mountain Steven MARCUS, Judges.1 HULL and Circuit Found., Lakewood, CO, Legal States Deb- Dewart, Swansboro, NC, orah E. George DUBINA, Judge, HULL, Chief Tragos, Office of Tragos The Law & Judge: Circuit Clearwater, FL, Sartes, Richard Peter passed Soon after the Patient Hutchison, Found., Legal Landmark Kan- Act, Protection and Affordable Care MO, Sandefur, City, Timothy sas A. Luke 111-148, Pub.L. (2010), No. Stat. Found., Wake, Sacramento, Pac. Legal amended Health Care and Education CA, Bordlee, Dorinda C. Bioethics Defense (“HCERA”), Reconciliation Act of 2010 LA, Fund, Metairie, Christina, Thomas M. 111-152, Pub.L. No. Stat. 1029 NAsh, Ogletree, Deakins, Smoak & Stew- (the “Act”), plaintiffs brought this ac art, PC, Greenville, SC, Victor L. Moldo- tion challenging Act’s constitutionality. van, Woods, LLP, McGuire Rebekah N. states, plaintiffs private are 26 individ Plowman, Nelson, Mullins, Riley & Scar- Mary Kaj uals Brown and Ahlburg, and LLP, Strickland, borough, B. Frank Anne the National Federation of Independent Lewis, Bryan Tyson, Strickland, Ware P. *6 (“NFIB”) (collectively Business “plaint the Lewis, LLP, Atlanta, GA, Brockington, iffs”).2 The defendants are the federal Houston, TX, Karen Bryant Tripp, James (“HHS”), Health and Human Services Blumstein, Professor, Law, F. Sch. of Treasury, Departments and Labor and Nashville, TN, Kopel, David B. Indepen- their (collectively Secretaries the “govern Inst., Golden, CO, dence Deborah Nirmala ment”). Misir, Lally, Lally Misir, Grant Martin & Mineóla, NY, Caso, Anthony granted T. The summary Ctr. for district court (1) judgment Const. Jurisprudence, Chapman government Univ. Sch. the on the Law, CA, Orange, Loyola, plaintiffs’ Mario state Texas claim that the expan Act’s Found., Austin, TX, Policy (2) Pub. Geoffrey sion of Medicaid is unconstitutional and Talmon, Office, PLLC, D. Talmon Law to the plaintiffs on their claim that the Boise, ID, Ramos-Mrosovsky, Carlos Bak- Act’s individual mandate —that individuals Hostetler, LLP, er purchase & New City, continuously York and maintain health Huffstetler, III, Nelson, Mullins, Noah H. private insurance from companies3 un —is Riley LLP, NC, & Scarborough, Raleigh, constitutional. The district court eonclud- Kansas, Indiana, Iowa, Louisiana, opinion jointly Maine, 1. This by Judges written was Thomas, Nebraska, Nevada, Dubina Michigan, and Hull. Waters v. Mississippi, 46 Cf. (11th Cir.1995) (authored Ohio, Dakota, F.3d Pennsylvania, North South Carnes, J.J.) Carolina, Dakota, Texas, Utah, (citing Anderson and Peek v. South Wash- (11th Cir.) (en banc) Wisconsin, Kemp, ington, Wyoming. F.2d 1479 and (authored Anderson, J.J.), by Vance and cert. denied, later, explained person 3.As unless the is cov- (1986)). L.Ed.2d 371 by government-funded program, ered Medicare, Medicaid, others, such as and the Alabama, Alaska, plaintiffs The 26 are purchase pri- state mandate insurance is to from a Arizona, Colorado, Florida, Idaho, Georgia, vate insurer. matter, initial As an to know whether a mandate exceeded the individual 'ed that act legislative requires is constitutional I of authority under Article congressional knowing Accordingly, what in the Act. enact- because was not Constitution the figure sweep- is to out what this our task tax and it Congress’s pursuant ed Act ing comprehensive actually says and power under the Congress’s exceeded that, To does. do we outline the Necessary Clause and Commerce findings identify congressional court also Clause. The district Proper addresses, the Act’s problems Act pro- mandate that the individual concluded structure, response and overall legislative from the rest was severable vision Titles and encompassing nine hundreds invalid. declared the entire Act the Act and Next, subjects. array laws on a diverse district government appeals the in greater depth set forth the contents we ruling individual mandate that the court’s five components of the Act’s most relevant severability and its is unconstitutional appeal: industry to this the insurance re- plaintiffs cross-appeal holding. state forms, new Exchanges, state-run ruling on Medicaid district court’s their mandate, employer penal- claim. For reasons expansion ties, expansion. and the Medicaid follow, part we affirm and reverse that, analyze After we the constitutional- part.4 ity expansion explain of the Medicaid that the why we conclude Act’s Medicaid INTRODUCTION expansion constitutional. Legal concerning issues constitution then review the We Court’s ality legislative present important of a act Congress’s power, decisions on commerce the courts. questions but difficult the individual mandate —which discuss Here, difficulty importance requires purchase an ex- Americans heightened because the Act itself is product private pensive from insurance published in the format in the Public pages from company expli- birth to death —and court, Laws;5 with agreeing district cate how exceeded its com- un plaintiffs, held all of Act was *7 enacting power merce its individual constitutional; appeal, gov on why We outline mandate. next Con- argues all of the Act is constitu ernment power gress’s provide tax does an tional. up- alternative constitutional basis for We, courts, as all federal must be this holding unprecedented presumption constitutionality, with a of gin Lastly, mandate. because of the Su- invalidate a meaning congression “we strong of preme presumption Court’s plain showing only upon al enactment severability judicial matter and as a of constitu restraint, has exceeded its we conclude the individual bounds.” v. Morri tional United States from the mandate severable remainder 1740, son, 120 opinion organized 529 S.Ct. of the Act. Our (2000). 1748, 146L.Ed.2d 658 follows: 111-148, (2010), grant No. 124 Stat.
4. We review the district court’s of sum 5. Pub.L. 119 Mobile, 111-152, mary judgment Sammy’s (2010). de novo. Stat. Pub.L. No. 124 1029 of Mobile, (11th City F.3d Ltd. v. 140 995 yet of the Act have not Some of sections 1998). review de novo a constitution U.S.Code, Cir. We been codified in the and for those challenge v. al a statute. United States provi- we to the future sections cite U.S.Code (11th Cir.), Cunningham, F.3d sion, along applica- effective date if with the denied, — U.S. -, cert. ble. (2010). L.Ed.2d 305 I. STANDING I.STANDING II. THE ACT matter, As a threshold we consider Findings
A. Congressional government’s challenge to plaintiffs’ B. of Nine Titles Overall Structure this standing bring lawsuit. III “Article jurisdiction the Constitution limits the C. Terms and Definitions of federal to ‘cases’ courts and ‘controver- D. Health Insurance Reforms ” Party Leahy, sies.’ Socialist Workers v. Exchanges E. Health Benefit (11th Cir.1998) (cita- 145 F.3d F. Individual Mandate omitted). tions explained: As we have Employer Penalty G. case-or-controversy constraint, H. Expansion Medicaid turn, imposes a dual limitation on feder- III. CONSTITUTIONALITY OF commonly al “justi- courts referred to as MEDICAID EXPANSION ciability.” Basically, justiciability doc- History A. Program of Medicaid prevent trine seeks to the federal courts B. Congress’s Power under from encroaching powers on the Spending Clause government other branches and to TV. COURT’S SUPREME COM- only ensure that the courts consider MERCE CLAUSE DECISIONS presented those that are an matters V. CONSTITUTIONALITY OF IN- judi- adversarial context. Because the DIVIDUAL MANDATE UNDER ciary unrepresentative, is unelected and THE COMMERCE POWER the Article III case-or-controversy limi- A. First Principles tation, as embodied doc- justiciability B. Dichotomies and Nomenclature trine, presents important restriction Unprecedented C. Nature of the In- of the federal courts. dividual Mandate (citations omitted). Indeed, there are D. Aggregation Wickard “three justiciability strands of doctrine— E. Scope Congress’s Broad Regu- standing, ripeness, go and mootness—that lation to the heart Article III case F. Proposed Government’s Limiting controversy requirement.” Harrell v. The Principles Bar, (11th Fla. 608 F.3d Cir. G. Congressional Findings 2010) (quotation marks and alterations H. Areas of Traditional State Con- omitted). cern strand, As first for the “[i]t is I. a Larger Essential Regulatory *8 now plaintiff axiomatic that a must have Scheme standing jurisdiction to invoke the the of J. Conclusion Outdoor, federal City courts.” KH LLC v.
VI. CONSTITUTIONALITY OF IN- Trussville, 1261, (11th 458 F.3d 1266 of DIVIDUAL MANDATE UNDER Cir.2006). “In question essence the of THE TAX POWER standing is the litigant whether is entitled A. Repeated ofUse the Term “Pen- to have the court decide the the merits of alty” in the Individual Mandate dispute particular or of issues.” Primera B. of Designation Numerous Other Raton, Iglesia Hispana Bautista Boca of Provisions in the Act as “Taxes” Cnty., 1295, Inc. v. Broward 450 F.3d 1304 C. Legislative History (11th of Cir.2006) omitted). the Indi- (quotation marks
vidual Mandate To standing, plaintiff demonstrate must “(1) VII. suffered, SEVERABILITY show that has immi- he or
1243
(2)
suffer,
they
impermissibly suing
are
the
cause
injury-in-fact;
nently will
statute];
parens patriae
rep
as
fairly
government
[the
traceable to
injury is
—or
likely to
is
their
violation
judgment
a favorable
of
citizens—in
resentatives
Harrell,
injury.”
608 F.3d
articulated in
v.
redress
of the rule
Massachusetts
1253;
Lujan
447,
597,
v.
Wild Mellon,
485-86,
also
see
262 U.S.
Defenders of
555, 560-61, 112 S.Ct.
life,
(1923).6
L.Ed. 1078
The state
67
(1992).
plain
351
“The
L.Ed.2d
respond
they
are not
vio
plaintiffs
establishing
of
each
tiff
the burden
bears
rule,
the Mellon
but rather have
lation of
Basham, 471
of
Elend v.
these elements.”
man
standing
challenge
to
the individual
(11th Cir.2006).
And
F.3d
first,
independent
for three
reasons:
date
for each
must be established
standing
the increased enrollment Med
because
Harrell, raises. See
plaintiff
claim a
by mandate
spurred
individual
icaid
standing
1253-54. “We review
F.3d at
cost the states millions of dollars
will
v.
de novo.” Bochese
determinations
second,
funding;
Medicaid
be
additional
Inlet,
964, 975
Ponce
405 F.3d
Town of
injured
they
provisions
cause
other
Cir.2005).
(11th
expan
the Act—such as the Medicaid
which the individual mandate
sion—from
fact,
a threshold
“[sjtanding
In
is
severed;
finally,
because
cannot
must be ad
jurisdictional question which
upon
individual mandate intrudes
their
of the
prior
independent
dressed
sovereign
enacting
interest
and enforc
at 974
party’s
of a
claims.” Id.
merits
statutes
their citizens
ing state
that shield
omitted).
(quotation marks and alteration
requirement
purchase
from the
obliged
questions
“we are
consider
And
States’
Br. at 67-69.
Opening
insurance.
par
standing regardless
of whether the
raised them.” Id. at 975.
ties have
Although the
of the state
question
con-
Notably,
government
does not
standing
challenge
individ
plaintiffs’
standing
plaintiffs
of the
test the
individual
an interesting
ual mandate is
and difficult
challenge
the NFIB to
case,
one,
posture
purely
in the
this
is
fact,
government
ex-
mandate.
confront
and one we need not
academic
concedes
one of the individual
pressly
clear that so
today.
abundantly
The law
standing to
plaintiffs Mary Brown—has
standing
long
plaintiff
as at least one
has
—
challenge the individual mandate. See
case here—
to raise each claim—as is the
(“De-
Opening Br. at 6 n.l
Government’s
not address
the remain
we need
whether
dispute
plaintiff
do not
fendants
See, e.g.,
have
ing plaintiffs
standing.
minimum cover-
challenge
Brown’s
Found.,
Energy
v.
Action Educ.
Watt
age
justiciable.”).
Nor does
provision
151, 160,
dispute
plaintiffs’
the state
government
(1981)(“Because
find
we
Cali
L.Ed.2d
challenge
provi-
standing to
the-Medicaid
standing,
has
we do not consider
fornia
sions.
other
Vill.
standing
plaintiffs.”);
Dev.
Heights v. Metro. Hous.
Arlington
govern-
only question
raised
9,n.
Corp., 429 U.S.
264 &
have
plaintiffs
whether the state
ment is
*9
9,
n.
man-
562 &
L.Ed.2d
challenge
standing to
the individual
(“Because
plaintiff,
presence
of the
of this
government claims that
date. The
not consider
the other
standing
do not have
be- we need
whether
plaintiffs
state
Mellon,
federal
was many recognized also Id. economy.10 national the uninsured desire insurance but have 18091(a)(2)(B). Thus, in billion § $43 coverage denied or cannot afford it. been about 1.7% of total represents shifted costs findings emphasize Its the barriers created expenditures. Of that health care $2.5 by private underwriting practices insurers’ spending in national health care trillion Id. related administrative costs. 2009, federal, state, governments local 18091(a)(2)(J). Private insurers want trillion, paid or 44%.11 $1.1 try to healthy protect insureds and them against unhealthy through entrants selves paid for 32% of Private insurers still underwriting, especially medical in the in id., 2009,12 spending care health dividual market. As a result of medical private employer- through: primarily underwriting, many uninsured Ameri private plans, insurance based ranging from 9 million to mil 12.6 cans — private market. The individual insurance voluntarily sought coverage health lion — employer-based health system covers 176 the individual market but were denied cov 18091(a)(2)(D). million Americans. erage, charged higher premium, or of insurance market private only coverage limited that excludes a fered people.13 Undisputed- preexisting condition.14 covers 24.7 million CMS, Expenditure surcharge family premi- $1017 11. National Health Web and a for See Tables, USA, govern- supra note at tbl.5. The Families Hidden ums in 2008.” See Pay spending health care in 2009 included ments’ Health Tax: Americans Premium (2009), $503 $374 billion for Medicare and billion for http://familiesusa2.org/ available at (cited Medicaid and the Children’s Health Insur- assets/pdfs/hidden-health-tax.pdf ("CHIP”). Program ance government). plaintiffs both the Projected spending $723.1 Medicare bil- $891.4 2016 and billion in 2019. lion in 'hidden tax’ on health insurance ac- "[A] 9. CMS, Projections Expenditure Health Nat’l roughly average counts 8% tbl.2, http://www.cms. "[tjhis 2009-2019 available premium” cost-shift insurance gov/NationalHealthExpendData/Downloads/ $1,100 added, average, family pre- each NHEProjections2009to2019.pdf. $410 about to an mium in 2009 and individu- expansion With the Act’s Medicaid and oth- premium.” al Br. of Amici Curiae Am. Ass’n factors, projected and CHIP er Medicaid Disabilities, al., People Support with et spending $737.5 $896.2 billion in 2016 and (citing the Government at 15 Ben Furnas & billion in 2019. Id. Progress Harbage, Peter Fund, Ctr. for Am. Action the Uninsured 1-2 The Cost Shift from CMS, Expenditure 12. See National Health Web (2009), http://www.american available at Tables, (derived supra note at tbl.3 from progressaction.org/issues/2009/03/pdPcost_ calculations). (calculations analy- shift.pdf based on a 2005 USA)). sis Families Report, supra 13. See Census note 22-25 (derived calculations). & 23 tbl.8 from Centers for Medicare & Medicaid Ser- See HHS, ("CMS”), Expenditure Coverage the Current Health Denied: How vices National tbls.l, 5, 11, System http:// Health Insurance Leaves Millions Be- Web Tables available at hind, http://www.healthreform.gov/reports/ www.cms.gov/NationalHealthExpendData/ (derived deniecLcoverage/index.html (citing Common- downloads/tables.pdf from calcula- tions). wealth Fund Biennial Health Insurance Sur- *11 findings, Congress prehensive determined industry its insurance reforms private private that the costs for which alter underwriting “[a]dministrative insurers’ 2006, practices, guarantee coverage, health insurance” were billion issuance of $90 percent products, overhaul their health insurance comprising premiums “26 to 30 and restrict premium pricing their struc- group the current individual and small (2) ture; creation of state-run “Health findings markets.” Id. The state that Exchanges” Benefit as new marketplaces Congress seeks to create health insurance individuals, families, through which and not require underwriting markets “that do employers, pooled small now together, can and eliminate its associated administrative competitively purchase the new insurance requires private costs.” Id. The Act in- products and obtain federal tax and credits applicants surers to allow all to enroll. 42 (3) so; subsidies do a mandate that § 300gg-l(a). Congress U.S.C. stated purchase individuals must and continuous- Act, by eliminating underwriting that the ly maintain pay health insurance or annual costs, premi- will lower health insurance (4) penalties; penalties private employ- on ums. Id. ers who do not type offer at least some S. Congress’s Solutions (5) health plan employees; to their and expansion of eligibility Medicaid and subsi- uninsured, Given the 50 million bil- $43 dies. costs, lion in uncompensated bil- $90 costs,
lion underwriting deter- The Act’s Medicaid expansion alone will problems mined these affect the national cover 9 million of the 50 million uninsured economy and interstate commerce. Id. by 2014 and 16 million 2016.15 The 18091(a)(2). § congressional The findings Act’s health insurance pri reforms remove (1) identify Act regulates: what the vate insurers’ coverage barriers to (2) market,” “health insurance “how and restrict their pricing coverage to make ac for,” paid when health care is cessible to the 9 to million uninsured purchased.” “when health insurance is coverage who were denied or had their (H). 18091(a)(2)(A), findings also preexisting conditions excluded.16 The signifi- state the Act’s reforms will Act’s Exchanges, significant with new fed cantly reduce the number of the uninsured subsidies, eral tax credits and are predict and will lower health premiums. insurance ed to make insurance to 9 available million 18091(a)(2)(F). §Id. in 2014 and million 2016.17 To uninsured, reduce the number of the Congress’s findings state that the Act’s employs the Act main five tools: com- multiple provisions, together:18 combined 2007); Collins, al., vey, rector, Office) Cong. Sara R. et The Com- Budget [hereinafter Fund, CBO, Help monwealth on the Analysis\, How http://www.cbo. Horizon: available at the Recession Has gov/ftpdocs/12 Millions Workers lxx/doc 12119/03-30-Health Left Insurance, Without Health CareLegislation.pdf. How Health (2011), Bring Will xi available Reform Relief HHS, Denied, Collins, http Coverage 16. ://www.commonwealthfund.org/~/ See supra note 14. media/Files/Surveys/2011/1486_Collins_help_ on_the_horizon_2010_biennial_survey_ CBO, Analysis, supra note at tbl.3. report_FINAL_31611 .pdf. Analysis Major 15.CBO's congressional Health Care findings refer six times Legislation in March 2010: "requirement, Enacted Before to the individual mandate to- Comm, the Subcomm. on Health of the H. gether provisions with the other of this Act.” Energy Cong. 18091(a)(2)(C), (E), & (F), (G), (I), Commerce 112th tbl.3 42 U.S.C. (J). (2011) (Statement Elmendorf, Douglas Di- *12 contain, on, rely additional data and indeed (1) consumers millions of new “will add turning Before about the uninsured. and “will market” insurance to the health Act, review that data.19 we share of Ameri- the number and increase insured”; who are cans and Data about the Uninsured Un- I. (2) the unin- number of reduce the will compensated Care sured, health insurance will broaden are the uninsured? As to health So who healthy indi- include additional pool to risk the uninsured do not fall into usage, care scale, of viduals, increase economies will Many of the uninsured single category. insurance reduce significantly will and year. care each Of do not seek health costs, all of administrative companies’ course, In of the 40 many do. 57% premi- insurance lower health which will year million uninsured that used some ums; services; 56% of the 41 medical year million uninsured that used some strengthen and upon will build medical services.20 health insurance employer-based private services, 50% of uninsured As to medical “176,000,000 already covers system, which in the people checkups past had routine Americans”; and years; people 68% of uninsured had two cover- “near-universal” will achieve years.21 checkups past routine five the uninsured. age of In uninsured made more than 20 rooms,22 emergency million visits 18091(a)(2). The medi hospitalized.23 2.1 million were findings Although congressional' by person each uninsured cal care used uninsured,” $2,000 to “the summarily average refer cost about on $1,870 the 52 amici briefs average on in 2008.24 briefs and parties’ Health, Emp’t evidentiary objection and Their no 19. There has been Institute, Policies (2009), http://epionline.org/ cited in the available at any party to the data and studies tbl.9 studies/oneill_06-2009.pdf. of the amici briefs. parties’ briefs or in fact, parties cite the same data. In at times Hosp. et al. 22. of Amici Curiae Am. Ass’n Br. HHS, Agency for Healthcare Research (citing Support of the Government Survey, Quality, Expenditure Panel Medical Release, HHS, Say New Data Unin- Press Summary Component Tables Household Nearly One-Fifth of Emer- sured Account for Tables”), ("MEPS Summary 1: Total Table 2009), (Jul. 15, gency available at Room Visits Expenses and Mean Services-Median Health http://www.hhs.gov/news/press/2009pres/07/ Expense per with and Distribution Person 20090715b.html). Payment: United Expenses Source of States, http://www. & available at hospitals reported more than meps. ahrq. gov/mepsweb/data_stats/quick_ hospitalizations of the uninsured. 2.1 million (follow Component tables.jsp "Household Planning Sec’y for Office of the Assistant summary hyperlink; then select 2007 tables” Evaluation, HHS, Value Health Insur- “year” and follow the "search” or 2008 for Adequate the Uninsured Have ance: Few of hyperlink hyperlink; next to then follow Pay Hospital Bills 5 Potential Resources 1”). “Table (2011), http://aspe.hhs.gov/health/ available at Survey Expenditure Panel The Medical reports/2011/valueofinsurance/rb.shtml. ("MEPS”) large-scale surveys set individuals, provid- their medical families and Tables, Summary supra note 20. 24. MEPS doctors, pharma- (including hospitals, and ers brief, filed in Economic Scholars' amici An cies), employers across the United States. government, "The med- support of the states: auspices of HHS. It conducted under the person by each uninsured costs ical care used O’Neill, average.” per year, Br. of $2000 M. Who about 21. June E. O’Neill & Dave Support of the Curiae Economists in Analysis America's Amici Uninsured? An Are the (citing “Agency Health at 16 Government Population, Their Characteristics Uninsured care, do seek health on health When the uninsured based status.30 Some are volun pay in full. happens? what Some Some tarily uninsured and self-finance because pay nothing. Data partially pay. Some they pay can for their medical care or have *13 paid average on 37% show the uninsured modest medical care needs. Some pocket costs out of in of their health care not have considered the issue. There is no 2008,25 2007, in while third and 46.01% why people one reason are uninsured. It another 26% on their behalf.26 parties pay therefore, surprising, also not that Con uninsured, poorer on surprisingly, Not gress has problem attacked the uninsured more health care average, consume for through multiple reforms and numerous they pay.27 Even in do house in avenues the Act that we outline later. the median income holds at or above level problems, Given these identified con- ($41,214) paid, the uninsured gressional findings, and data as back- average, than half their medical care less ground, we now turn Congress’s legisla- costs.28 response tive in the Act. It undisputed people is also are variety uninsured for a wide of reasons. B. Overall Structure Nine Titles spread
The uninsured are across different income brackets: sweeping comprehensive and nature $25,000: less than 15.5 million unin- of the Act is evident from its nine Titles: sured, 31%; or about Quality, I. Affordable Health for Care (2) $25,000 $49,999: 15.3 million unin- All Americans 30%; sured, or about II. Role of Public Programs $50,000 $74,999: 9.4 million unin- sured, 18%; or about III. Improving Quality Effi- (4) $75,000 or more: 10.6 million unin ciency of Health Care sured, or about 21%.29 IV. Prevention of Chronic Disease and show, As many the data of the uninsured Improving Public Health have low to simply moderate incomes and V. Health Care Workforce cannot afford insurance. Some of the Transparency uninsured can VI. Program Integ- afford insurance and tried it, to obtain coverage but denied rity were Research, Quality Expendi- Care Bradley Herring, Medical 27. the Avail- Effect of Tables, Survey, Summary ture Panel Data Ta- ability Charity Care Uninsured on the (see Tables, Summary ble 1” supra MEPS Insurance, Demand Private Health 24 J. for 20); al., Hadley, "Covering note Jack et (2005). 229-31 Health Econ. Costs, Uninsured in 2008: Current Sources of Costs,” Payment, 27(5) and Incremental ("[Tlhe Herring, supra 28. note at 231 me- (2008)). Health Affairs W399-415 dian income for all in the U.S. household^] contrast, points this same amici brief roughly poverty, poverty and the 300% average person out: "In used US$13,738 family threshold was for a of three $6,186 personal health care services.” Id. 2000.”); id. at see 230 tbl.l. (citing at 11 "Center for Medicare and Medic- Services, Expenditure aid National Health Ac- Report, supra 29. See Census note at 23 tbl.8. counts”); CMS, Expenditure see National Web Tables, supra note at tbl.l. HHS, Denied, Collins, Coverage 30. See Tables,
25. Summary supra See MEPS note 20. supra note 14. USA, Tax, 26. See Families Hidden Health su- (cited pra plaintiffs note at 2 both the government). and the expands Title VII extends and certain Access to Innovative Improving
VII. in health care Therapies drug discounts facilities Medical patients. §§ serving low-income Id. 7001- Community Living Assistance VIII. national, Title VIII establishes Supports Services voluntary pro- long-term care insurance IX. Revenue Provisions31 purchasing community living gram as- spread through- provisions The Act’s and support persons sistance services many statutes and different titles out §§ functional with limitations. 8001- Appendix As our States Code. United provi- Title IX contains revenue demonstrates, con- A the Act’s nine Titles *14 §§ Id. sions. 9001-9023. about hundreds tain hundreds of new laws areas of health insurance and of different A it Appendix We include because docu-' (1) A most Appendix health care. details scope ments the breadth and of the (2) of the Act with section numbers. parts Act; the multitudinous reforms enacted Here, merely subject the broad (3) we list uninsured; to reduce the number of the in Title. matter each large number array and diverse new, expanded, federally-funded or pro- components I these four Title contains studies, commissions, grams, grants, and (1) earlier: the insurance indus- mentioned (4) Act; councils the extensive new (2) reforms; the new state-run Ex- try requirements regulations federal and on (3) mandate; and changes; the individual (5) subjects; myriad many and how (4) §§ Act 1001— employer penalty. provisions operate sepa- Act’s on their face II focus to Title shifts Act’s rately independently. and programs designed pro- publicly-funded uninsured, such health care for the vide depth parts now examine in the five We CHIP, Medicaid, and initiatives under largely designed of the Act to reduce the Act. Improvement Health Care Id. Indian number of the uninsured. Because of the §§ Title II contains the Med- 2001-2955. comprehensive complex regula- Act’s and at issue here. Title II’s expansion icaid scheme, tory critical to examine what create, expand, or other provisions also actually the Act does and does do. We Id. publicly-funded programs. start with some terms and definitions. addresses Medicare. primarily Title III C. Terms and Definitions §§
Id. 3001-3602. Title IV concentrates §§ of illness. Id. 4001-4402. prevention on regulates aspects The Act three supply to increase the Title V seeks (1) “markets,” insurance: the out- health through health care workers education may purchase lets where consumers insur- loans, training grants, programs. and other (2) products; “plans,” ance the insurance §§ Id. 5001-5701. (3) “benefits,” themselves; products and the health care services or items covered transparency Title creates new VI plan. an insurance under requirements physician- anti-fraud in Medicare hospitals participating owned 1. Markets nursing participating facilities and for making §§ its focus on health insur- or Medicaid. Id. 6001-6801. Given
Medicare uninsured, Act, Act ance available to the Title includes the Elder Justice VI abuse, regulates four markets for neglect, recognizes elder designed ehminate (1) products: the “indi- health insurance exploitation. amendments to these nine Titles. 31. There is also a tenth Title dedicated to (2) market”; option open mar- will have the group the “small states vidual (3) market”; ket”; Exchanges large employers. U.S.C. “large group 18032(f)(2)(B). (4) to be created and Exchanges, the new run each state. Package” 2. “Essential Health Benefits means “individual market” The term Term coverage market for health insurance “the key Act are: “es- Two terms than in connec- individuals other offered to package” sential health benefits plan.” health 42 U.S.C. group tion with a coverage.” Although “minimum essential 18024(a)(2). 300gg-91(e)(l)(A), §§ similar, they sound each has different market” means “the “group The term meaning. market under which indi- health insurance The term “essential health benefits coverage obtain health insurance viduals package” comprehensive refers to the ben- (directly through any arrangement) package provided by efits must be (and depen- their of themselves behalf plans group the individual and small dents) main- through group plan (effec- § 300gg-6(a) markets 2014. Id. *15 18024(a)(1). § employer.” an Id. tained 18022(a). 1, 2014); § The Act tive Jan. id. market,” “group the Act dis- Within impose does not the essential health bene- “large group between the mar- tinguishes package plans large fits offered the “small market.” The group ket” and group employers employees. to their “large group term market” refers to the package” An “essential health benefits purchase market under which individuals (1) provide coverage must: for the “essen- coverage through group “large a of a plan tial benefits” described §§ employer.” 300gg-91(e)(3), Id. 18022(b); § limit the insured’s cost- 18024(a)(3). “large employer” A is an em- 18022(c); provided § sharing, and ployer employees. with over 100 Id. silver, bronze, provide gold, “either the or 18024(b)(1). 300gg-91(e)(2), §§ platinum coverage” level of described in The term “small market” refers group 18022(d). 18022(a). § § Id. pur- to the market under which individuals Act leaves it to The HHS to define the coverage through group plan chase a of a term “essential health benefits.” Id. employer,” employer “small or an with no 18022(b). However, § that definition of employees. §§ more than 100 300gg- Id. “essential health benefits” must include at (b)(2). 91(e)(4),(5), 18024(a)(3), least these ten services: “Exchanges” The term refers to the (A) Ambulatory patient services. exchanges that health benefit each state (B) Emergency services. 18031(b). operate.32 § must create and Id. (C) Hospitalization. Companies (profit nonprofit) partici (D) Maternity and newborn care. pating in the Exchanges will offer insur (E) Mental health and substance use purchase by ance for individuals em services, including disorder behavioral id.; ployees employers. of small See id. health treatment. § can signifi 18042. The uninsured obtain (F) Prescription drugs. cant federal tax credits and subsidies (G) through Exchanges. See 26 U.S.C. Rehabilitative and habilitative ser- 36B; § § 42 U.S.C. 18071. In vices devices. tractor) Exchange. opt Act allows state to out of creat- will establish the ing operating Exchange, 18041(c). in which case § U.S.C. (or government nonprofit the federal con-
(H) Laboratory gardless of level of benefits or cover- services. age. The requirement of the “essential (I) and wellness services and Preventive package” directly health benefits tied to management. chronic disease reforms, product some the insurance (J) services, including oral and Pediatric but not the individual mandate. care. vision component: turn to the first We Act’s 18022(b)(1).33 bronze, silver, § the insurance reforms. platinum coverage levels of re gold, and (or cost-sharing actuarial flect the levels D. Health Insurance Reforms benefits) plan in a and do not value of uninsured, To reduce the number of the type the level or of services. Id. represent heavily the Act regulates private insurers 18022(d)(l)-(2). example, § For a bronze prod- and reforms their health insurance costs, plan covers 60% the benefits’ examples major ucts. We list re- pocket; out of pays the insured 40% forms. 90%, plan covers with insured platinum 1. Guaranteed issue. Insurers must (D). 18022(d)(1)(A), 10%. Id. paying every permit employer or individual who S. Individual Mandate’s “Minimum applies group the individual or markets Coverage” Term Essential (effec 300gg-l(a) to enroll. U.S.C. 2014). However, tive Jan. insurers wholly The Act uses a different term— “may coverage restrict enrollment in de coverage” “minimum essential connec- —in (a) open spe scribed subsection [in ] mandate. “Mini- tion with the individual *16 § periods.”34 300gg- cial enrollment Id. coverage” type mum is the of essential 1(b)(1) (effective 2014). Jan. satisfy the individual man- plan needed variety plans date. A wide of health renewability. 2. Guaranteed Insur- coverage”: “minimum essential considered group ers in the individual and markets (1) (2) government-sponsored programs, coverage must renew or continue at the employer-sponsored plans, health eligible plan sponsor’s option individual or in the (3) (4) plans, individual market health exceptions, absence of certain as pre- such (5) grandfathered plans, health health fraud, mium nonpayment, or the insurer’s for, in, and are offered plans qualify coverage discontinuation of in the relevant Exchange. state-run U.S.C. § 300gg-2(b). market. Id. (f)(1). 5000A(a),
§ Waiting periods. 3. group Under types satisfy plans, may impose will health Many plan waiting of these insurers they periods up days potential mandate even if do not have the of to 90 before package” eligible health and re- enrollee is to be covered under the “essential benefits benefits,” (effective defining 300gg-l(b)(3) § 33. “essential health U.S.C. Jan. In scope 2014). HHS must ensure that the of essential "special Insurers must establish en- ” “equal scope to the of bene- health benefits is periods 'qualifying rollment for events.' Id. provided typical employer plan.” fits under (b)(2). 300gg-l "Qualifying § events” in- 18022(b)(2). § take ad- 42 U.S.C. HHS must clude, (1) example: death of the "[t]he consideration, into such as ditional elements (2) employee”; termination "[t]he covered benefits, among categories balance dis- (other employee’s than reason of such age disability, and crimination based on hours, misconduct), gross or reduction segments popula- the needs of diverse employee's employment”; the covered 18022(b)(4). § tion. Id. (3) legal separation divorce or "[t]he employee’s employee from the covered regula- promulgate 34. The Act directs HHS to spouse.” § respect periods. 42 29 U.S.C. 1163. tions with to enrollment (effective 300gg-7 prevents varying premi- §§ Jan. rule insurers from plan. Id. 2014), geographic The Act no ums within a area on 300gg-3(b)(4). places based status, gender, health periods for or other factors. waiting ap- limits on insurers’ individual market. plications package. 7. Essential health benefits preexisting group The individual and small market Elimination of condi 4. plans comprehensive must contain cover may long limitations. Insurers no tions age known as the “essential health benefits coverage to an deny er or limit due individ package,” §§ defined 300gg- above. Id. medical conditions. The preexisting ual’s 6(a) (effective 18022(a). 2014), Jan. prohibits preexisting Act condition exclu impose Act does not this requirement on sions for children under 19 within six large group plans.37 market enactment, months of the Act’s and elimi preexisting nates condition exclusions for coverage. 8. Preventive service In- § beginning 300gg-3. in 2014.35 Id. adults provide coverage surers must for certain preventive enumerated health services eligi 5. Prohibition on status deductibles, any without copays, or other bility may rules. Insurers not establish cost-sharing requirements. § 300gg- Id. eligibility rules based on of the health 13(a). status-related factors listed the Act.36 (effective 2014). § 300gg-4 Id. Jan. Dependent coverage. Insurers dependent must allow children to remain Community rating. the individ- on parents’ policies their until age 26. Id. ual group and small markets and the Ex- § 300gg-14(a). changes, may vary insurers premium rates (1) only plan based whether the covers 10. Elimination of annual and life (2) area”; family; an individual or a “rating time limits. may longer Insurers no es (limited ratio); age to a 3-to-l tablish lifetime dollar limits on essential (limited ratio). tobacco use to a 1.5-to-l § health benefits. 300gg-ll(a)(l)(A), Id. (b). Each 300gg(a)(l). Id. state must estab- Insurers retain annual dollar rating subject lish one or more areas limits on essential health benefits until § 300gg(a)(2)(B). HHS review. 300gg-ll(a). This 2014.38 Id. *17 (9)Any 35. For dates effective as to children and then other health status-related factor adults, 111-148, I, appropriate by determined § see Pub.L. No. Title Sec- [HHS] retary. 1253), (2010) (formerly (re- § 124 Stat. 162 (effective § 300gg-4(a) 42 U.S.C. amended, Jan. § numbered 1255 and Pub.L. No. 2014). X, 111-148, 10103(e), (f)(1), § Title 124 Stat. (2010), and codified in note to 42 U.S.C. Rather, large group subject market is 37. 300gg-3). § only coverage-reform requirements to a few apply broadly to either all insurance
36. Health status-related include: factors plans group plans particular. or health See Schwarcz, Amy & Daniel Monahan Will Em- (1) Health status. ployers Undennine Health Care Reform (2) (including phys- Medical condition both Dumping Employees?, Sick 97 Va. L. Rev. illnesses). ical and mental (2011). (3) experience. Claims (4) Receipt of health care. 38. HHS shall determine what restricted an- history. Medical permitted nual are limits on the dollar value (6) Genetic information. of essential health benefits until 2014. 42 insurability (including Evidence of con- 1(a)(1), (2). (a) 300gg-l § U.S.C. "Subsection arising ditions out of acts of domestic vio- prevent group shall not construed to lence). plan coverage health or health insurance (8) Disability. placing per from annual or lifetime beneficia- cost-sharing HHS, in 14. Premium increases. along 11. Limits on states, all “Cost-sharing”39 annually includes out-of- with shall review sureds. “deductibles, coinsurance, copay in premiums “unreasonable” increases pocket ments, “qualified beginning § in 2010. charges” 300gg-94(a)(l). or similar Id. 18022(c)(3)(A). justify any § Issuers expenses.”40 Id. must unreasonable medical § apply group premium 300gg-94(a)(2). limits increase. Id. cost-sharing Annual plans health sold the indi plans, health coverage 15. Prohibition on rescis- market, plans qualified vidual coverage sions. Insurers not rescind Exchange.41 an Id. through offered for or except misrepre- fraud intentional (effective 1, 2014), §§ 300gg-6(b) Jan. § sentation of material fact. 300gg-12. Id. (c). 18022(a), Single pool. risk Insurers must any for 12. Deductibles. Deductibles consider all individual-market enrollees in group market plans offered the small plans their health (except enrollees in $2,000 plans capped covering for grandfathered plans) to be members of a $4,000 other single individuals and (whether single pool risk privately enrolled adjusted §§ plan, 300gg- after 2014. Id. through or Exchange). Id. 6(b) (effective 18022(c)(2). 1, 2014), Jan. 18032(c)(1). § group Small market enroll- apply do not The deductible limits indi- ees must be considered the same risk plans large group plans. vidual See id. 18032(c)(2). pool. §Id.
13. Medical loss ratio. Insurers must Temporary high pool pro- risk premium maintain certain ratios reve- gram. many To cover of the uninsured medical spent nue on insureds’ care immediately, the Act directs HHS es- § expenses. 300gg- versus overhead Id. a “temporary high tablish risk health in- (b)(1). 18(a), market, large group In the pool program” surance coverage offer spend premium insurers must 85% of their preexisting uninsured individuals with con- patient on care and no more than revenue until prohibition preexisting ditions on § 300gg-18(a), 15% on overhead. Id. condition exclusions for adults becomes ef- (b)(1)(A)®. In the individual and small 18001(a). § fective in 2014. pre- Id. markets, must group spend insurers 80% persons preexisting miums for with a con- patient of their revenue on care and no healthy person dition remain what a would 300gg~ than 18001(c)(2)(C), more 20% overhead. Id. §§ pay. 300gg(a)(l). Id. (b)(l)(A)(ii). 18(a), This medical-loss ratio Act allocates billion to HHS to $5 requirement applies plans (including to all high-risk pool. cover this When this tem- grandfathered plans). 300gg-18(a), porary program ends in such individ- *18 (b)(1). report Insurers must to HHS their coverage uals will be transferred 18001(a)-(d), § premi- through Exchange. ratio of incurred claims to earned Id. § 300gg-18(a). (g). ums. Id. ry specific cost-sharing equal limits on covered benefits 41.Annual limits on are essential health benefits....” Id. out-of-pocket spending the current limits on 300gg-ll(b). § high-deductible plans for health under the (for 2011, $5,950 Internal Revenue Code for “Cost-sharing” “premi- does not include
39. $11,900 self-only coverage family cov- ums, billing balance amounts for non-network erage), adjusted by "premium after 2014 providers, spending or for non-covered ser- , adjustment percentage.” 42 U.S.C. 18022(c)(3)(B). § 42 U.S.C. vices.” (effective 2014), 300gg-6(b) §§ Jan. "Qualified 18022(c)(1); 223(c)(2)(A)(ii), (g); § expense” 26 U.S.C. medical is defined in (2010). 223(d)(2). § 26 U.S.C. I.R.S. Pub. at 3 may 18081-83. create and run States regulation maintained.
18. State Exchanges through governmental and enforce will license insurers States nonprofit entity. laws. Id. or U.S.C. federal and state insurance both 18031(d)(1). 18021(a)(1)(C). § provides § The Act for the au operation regulatory of state continued interstate, may regional, States establish respect to interstate thority, even with 18031(f). § Exchanges. or Id. subsidiary compacts,” choice which en “health care government provide The federal fund- will plans to be offered qualified able health 1, 2015, Ex- ing January until to establish 18053(a). § than one state.42 Id. more 18031(a). § changes. Id. Insurers reforming products In health insur- offer their inside or these addition outside 18032(d). requires § the Act the cre- products, Exchanges, ance or both. Id. the uninsured Exchanges ation of where Importantly, Exchanges upon draw examine buy products. can the new We significant experience regulat- the states’ Act, also component this second ing industry. the health insurance id. See designed to make insurance more accessi- § 18041. The Act allows states some flexi- and thus reduce the ble and affordable enforcement, bility operations number of the uninsured. though directly states either must adopt requirements the federal set forth Exchanges E. Health Benefit HHS, adopt regulations state 1. Establishment State-Run Ex- effectively implement the federal changes standards, as determined Id. HHS. 18041(b). entitled, 1, 2014, § By January all es- a subsection “No states must regulatory Ex- interference with tablish “American Health Benefit State authori- changes” ty,” provides and “Small Business Health the Act “[njothing this Options Program Exchanges,” chapter which are shall be construed to preempt any individuals, marketplaces insurance where prevent appli- State law that does not families, employers can shop small provisions chapter.” cation of the of this 18041(d). products. for the Act’s insurance § new Id. 18031(b). § compare
Id. Consumers can Qualified Employ- Individuals and prices buy coverage one of the from Exchanges ers in the (c). 18031(b), § Exchange’s issuers. Id. Exchanges centralize fa- Act provides “qualified information and individ significant cilitate the use of the Act’s uals” “qualified employers” may pur through federal tax credits and other subsidies to chase insurance the Exchanges. 18031(d)(2). purchase § Although “qualified insurance. See 26 Id. in 36B; 18031, 18071, defined,43 §§ broadly “qualified U.S.C. U.S.C. dividuals” is compacts quali- required 42. Health care choice allow and "would be chaser resides” to be plans fied health to be offered in the individu- licensed in State in which it each offers states, multiple yet plans al markets of such plan compact.” under "only subject regula- will to the laws and 18053(a)(l)(B)(i)-(ii). *19 plan tions of the State in which the was written or issued.” U.S.C. "qualified legal 43. A individual” is a resident 18053(a)(1)(A). qualified § The issuer of such (1) "qualified in a health who seeks to enroll plans through health offered health care plan” through the individual market in compacts choice "would continue sub- (2) Exchange, and resides in the state that conduct, ject practices, to market unfair trade Exchange. established 42 U.S.C. adequacy, protection network and consumer 18032(f)(1), (3). illegal § pur- standards ... of the State in which the Prisoners and benefits,” initially limited to small addition to “essential health employers” but defray the state must the costs of addition- may in but states allow employers, coverage through al payments directly to in Ex- employers participate their large 18031(d)(3)(B). § patients or insurers. Id. (B). 18032(f)(2)(A), Quali- § changes. Id. plans employers purchase group can fied significant One exception to the “essen- 18032(d)(1). § Id. Exchanges. in or out of package” requirement tial health benefits catastrophic plan is the in the individual Qualified Health Plans in the Ex- 3. only. market and outside the Ex- changes may changes, catastrophic insurers offer provide plans no benefits until a prescribes types plans The Act $5,950 certain level of out-of-pocket Exchanges, known as available costs— $11,900 self-only for coverage and for fami- “qualified plans.” health Id. ly coverage in 2011—are incurred. Id. 18031(d)(2)(B)®. § A “qualified health 18022(e); § 18022(c)(1), § see id. (1) plan” plan is a health that: is certified (e)(1)(B)®; § 223(c)(2)(A)®), 26 U.S.C. plan health in each Ex qualified as a (2010). (g); I.R.S. Pub. at 3 The level offered; through plan which the change of out-of-pocket equal costs is to the cur- (2) an “essential health benefits provides rent limits on out-of-pocket spending for (3) and is offered an issuer package”; high adjusted deductible health plans after (a) good standing is licensed and in (c)(1). 18022(e), § U.S.C. (b) coverage, each state where offers and catastrophic plan exception applies This complies regulations with and HHS (1) only plan: if the in the is sold individu- requirements Exchange. Id. (2) market; al restricts enrollment to those 18021(a)(1). agree, § in issuer must age under certain persons exempted or alia, plan ter to offer at least one in the (3) mandate; from the individual provides “gold” “silver” level and one in the level in the essential health benefits coverage after Exchange in which it participates, each as met; (4) the out-of-pocket level is and 18022(d). § described Id. provides coverage for at least three pri- 18021(a)(1)(C). § charge The issuer must (2). 18022(e)(1), § mary care visits. Id. premium regardless the same rate a plan Exchange whether is offered in an 5. Federal Premium Tax Credit directly.44 or Id. uninsured, To reduce the number of the the Act also establishes considerable feder Package” “Essential Health
h- Benefits al tax credits for individuals and families Catastrophic Plans (1) with household incomes between 1 and package” The “essential health benefits (2) level; poverty 4 times the federal who required qualified plans of all health sold do not receive health through insurance an 18021(a)(1)(B). Exchanges. § in the employer; purchase who health may require qualified States that a health through Exchange.45 insurance an (c)(l)(A)-(C). 36B(a), (b), in that plan offered state cover benefits U.S.C. (in purchase through plan Exchange aliens insurance health offered in an accor- 18032(f)(1)(B),(3). standards) Exchanges. certify §Id. dance with federal plans “qualified plans.” health as health See
44. HHS establishes the criteria for certifica- 18031(e). §id. plans "qualified insurance tion of health plans” develops rating system Specifically, to "rate the amount of the federal tax qualified plans through given equal health offered an Ex- credit for month is an amount change monthly premiums in each benefits level on the basis of to the lesser of quality price." qualified plan plans, the relative 42 U.S.C. offered in 18031(c)(1), (3). through Exchange, must rate each market States *20 credit, an eligible purchased through Exchange.46 individuals See 26 the To receive 36B(b)(2). § U.S.C. through an plan in a offered must enroll their income to the Exchange report Cosi^Sharing 6. Federal Subsidies 18081(b). § If the 42 U.S.C. Exchange. variety provides The Act also a of feder- qualifies, level the income individual’s cost-sharing al subsidies to reduce the out- tax credit Treasury premium the pays (1) for who of-pocket expenses individuals directly to the individual’s insur- amount qualified plan enroll in a sold through Exchange an in the level of silver 18082(c)(2)(A). § Id. plan ance issuer. a coverage, and have household income only the dollar differ- pays The individual poverty between 1 and 4 times the federal tax credit and premium the ence between § level. 42 U.S.C. charged. Id. premium total the earlier, Exchanges, As noted the with 18082(c)(2)(B). The credit amount § significant federal tax credits and subsi second-cheapest plan the cost of the tied to dies, predicted to make insurance Ex- through offered the silver level to 9 million in 2014 and 22 million available resides, change where the turn by 2016.47 We now to the Act’s third any plan for the though component: the credit be used individual mandate. taxpayer exchange required and the members of that the states are cover the household, create will receive a refundable taxpayer's credit the the excess of: purchase subsidizes their of that (a) insur- monthly premium taxpayer the would According Security ance .... Social charged second lowest-cost silver be for the Administration, poverty the current level (b) taxpayer’s yearly plan over 1/12 $10,830; single for a individual is thus a multiplied by "applica- household income single individual can have household in- percentage,” percentage ranges a ble $43,320 quali- come of as much as and still 9.5%, depending on income. 26 from 2.0% fy by to have his insurance cost subsidized 36B(b)(3)(A)-(C). U.S.C. four, government. family aFor helps family example An translate. For a $22,050; poverty current level is such a $33,075 per year, four with an income of family large can have household income as assuming premium in the second $88,200 qualify subsidy. and still for a plan covering family lowest-cost silver Kahn, Douglas Jeffrey A. Kahn & H. Free $4,500 ($375 month), per year per the federal Mandatory Rider: A Medical Justification for $3,177 ($264.75 per year tax credit would be Reform, Insurance Under Health Care month). USA, Taxes, per See Families Lower Impressions (2011). L.Rev. First Mich. Lower Premiums: The New Health Insurance poverty HHS has since raised the level for (2010), http://www. Tax Credit 8 available $22,350 family 2011 to for a of four and familiesusa.org/assets/pdfs/health-reform/ $10,890 single Fed.Reg. a for individual. 76 Premium-Tax-Credits.pdf. Without the federal Thus, (Jan. 2011). single a credit, month; family pays per $375 tax a individual can have household income of as credit, family pays per $110.25 with the $43,560 eligible much as a still be for month, $1,323, or a total of instead of the full family federal tax credit. A of four can have $4,500 premium. Id. The federal tax credit $89,400 income household of as much as provides major incentive for the uninsured eligible still be federal tax credit. (in market) purchase the individual insur- 18071(b). See 42 U.S.C. through private ance from a but insurer CBO, Analysis, supra note at 18 tbl.3. Exchange. predicts The CBO 24 million explained opera- 46. Commentators have through Exchanges, will be insured with tion of the tax credit for households between receiving at least four-fifths “federal subsidies poverty one four times the federal level as substantially purchasing reduce the cost of follows: coverage,” average health insurance $6,460 per person. years 18-19 tbl.3. For taxable after certain low- pur- who moderate-income individuals The CBO estimates that this 9 million in- partially a health will offset a 3 chase insurance under insurance crease *21 Treasury. man- dination with Id. The Mandate F. Individual § specify in 5000A do not provisions date penalty mandate and its The individual plan. what benefits must be in that in the Internal Reve- entirely are housed instances, many satisfy in plans, listed D, Code, labeled “Miscella- in subtitle nue regardless of mandate the level benefits § 5000A Excise Taxes.” 26 U.S.C. neous coverage. or that, after The Act mandates seq. et (1) shall main- “applicable all individuals” Govemmenb-Sponsored Programs coverage” for tain “minimum essential example, variety government- For a (2) or dependents, and their themselves sponsored satisfy will the indi- programs 5000A(a)- § monetary penalty. a Id. pay vidual mandate. For individuals 65 or (b). penalty must include the Taxpayers over, in enrolling Medicare Part A will federal tax return. Id. on their annual 5000A(f)(l)(A)(i). § suffice. Id. Individu- 5000A(b)(2). taxpayers filing a § Married may satisfy als and families the mandate jointly any penal- for joint return are liable Medicaid, by enrolling eligible. in if Id. 5000A(b)(3)(B). § ty. Id. 5000A(f)(l)(A)(ii). § Qualifying children can age satisfy by
under the mandate Coverage” 1.“Minimum Essential enrolling CHIP. Id. 5000A(f)(l)(A)(iii). § Government-spon- “minimum es- glance, At the term first veterans, programs sored active and as used in the Internal coverage,” sential military personnel former and their fami- Code, like it refers to a Revenue sounds lies, volunteers, active Peace Corps level of benefits or services: Howev- base Depart- active and retired civilian Defense er, the Act uses a different term' —the personnel dependents ment and their sat- package” in Title “essential health benefits 5000A(f)(l)(A)(iv), § isfy the mandate. Id. benefits and 42—to describe health care (vi). (v), (effec- § 300gg-6(a) services. U.S.C. 2014). contrast, “minimum tive Jan. Eligible Employer-Sponsored Plans coverage” array refers to a broad essential n Individuals satisfy also the mandate satisfy that will the individual plan types by purchasing coverage through any “eligi- 5000A(f)(l). mandate. 26 U.S.C. employer-sponsored plan.” Id. ble 5000A(f)(l)(B). An satisfy “eligible employer- An can the mandate’s plan “minimum a or coverage” requirement sponsored plan” “group essential health (1) any government-funded group coverage” health insurance offered through: A, “by an plan employer employee,” health such as Medicare Part Med- to the (2) (1) CHIP; icaid, TRICARE, broadly governmental “eligi- or is defined as: (3) federal, state, by or employer-sponsored plan”; any plan established ble (4) (2) market; government employees; in the individual local for its plan health “any any grandfathered plan; plan coverage health or as a other or offered catch-all, market large group “such other health benefits cov- small or within State”; plan erage” recognized by grandfathered that is HHS coor- through purchase policies in individual-market cover- and otherwise—to million decrease Exchanges. Similarly, age Exchanges. the 22 million in- outside the Id. The number Exchange-based coverage obtaining coverage in 2016 in the individual market crease partially Exchanges projected to de- will be offset a 5 million decrease outside the policies Act individu- in those covered individual-market crease because the incentivizes subsidies, credits, Exchanges. through premium tax obtained outside als— *22 However, market, in the individual insur- group market. Id. in offered catastrophic plans persons can offer ers 5000A(f)(2). plans large Health em § age persons exempted under 30 or certain mandate satisfy the individual ployers 18022(e). § the mandate. Id. from of the benefits offered the nature whatever employee.48 to the Plans Grandfathered plan” health “self-insured Whether already-insured An fulfill individual can employers satisfies the mandate is large by being the individual mandate covered story.49 The mandate’s another by any “grandfathered plan,” health 5000A(f)(2) plans refers to in the “small § 5000A(f)(l)(D), § U.S.C. which is group Id. large or market.” group plan health or health insurance cov added). 5000A(f)(2)(emphasis § A “self- erage individual was enrolled definition, plan,” by health is not insured on March 2010.50 42 U.S.C. (e). 18011(a)(1), § offered in a “market.” It is thus sold or large employers’ clear self- not whether subject many While Act’s plans “eligible insured will constitute em reforms, product grandfathered plans 5000A(f)(2) §in plans” ployer-sponsored comply provisions, must with among some thereby satisfy the mandate. It dependent coverage them the extension of age later until recognize require HHS will “self- medical-loss ratio ments, (1) prohibitions preexist and the on coverage” under the “other plans” insured (2) exclusions, ing condition lifetime limits “grandfathered plan” categories or (3) coverage, waiting on periods, excessive 5000A(f)(2). § mandate’s (4) unfair coverage. rescissions of Id. (e). 18011(a)(2)-(4), § Under the “interim Ip. Plans in the Individual Market HHS, regulations” by final plans issued satisfy Individuals can also the mandate grandfathered they will lose their status if by purchasing insurance the individual (1) significantly choose to cut or eliminate Exchanges directly or through market (2) benefits; copayments, increase deduct 5000A(f)(l)(C). § from issuers. ibles, out-of-pocket or costs for their en imposes Act the “essential health benefits (3) rollees; premi decrease the share of package” requirement plans sold in the employers ums contribute for workers in group (4) individual and small markets. 42 plans; group or decrease annual limi (effective 2014). § 300gg-6 § U.S.C. 147.140(g). Jan. ts.51 C.F.R. restrictions, 48. Because of these looser 50. The Act some also allows the enrollment of fami- ly newly employees members and surprising have hired commentators found grandfathered plans losing plans’ without employer-sponsored coverage qualifies 18011(b), grandfathered § status. 42 U.S.C. coverage” "minimum essential under the Act. (c). regulations” Under the "interim final Schwarcz, supra & See Monahan note HHS, group plan issued health "[a] ("Surprisingly, appears ... [the Act] group coverage health insurance does not employer-provided coverage define as auto- grandfathered plan cease to be health cover- matically constituting minimum essential cov- (or all) age merely because one or more even individuals, erage despite the minimal re- individuals enrolled on March 2010 cease quirements applicable plans.”). to such covered, provided plan to be has continuously covered since March someone "applicable 49. The Act defines an self-insured (not necessarily person, the same but plan” plans pro- to include self-insured person).” at all times at least one 45 C.F.R. viding coverage "any por- health care where 147.140(a)(1)(f). coverage provided of such tion other than through policy.” an insurance HealthReform.gov, 26 U.S.C. 51. See also Fact Sheet: 4376(c). Keeping the Health Plan You Have: The Af- tribes; Coverage Recognized” by of Indian 6. “Other individuals whose in health insurance gaps coverage last less HHS months; catch-all, than three as a provides The individual mandate even who, HHS, individuals as determined open the door to other catch-all that leaves *23 “hardship” regarding have suffered a their coverage. The “minimum essential health ability coverage qualified to obtain under a by coverage” requirement may any be met 5000A(e).. § plan. health Id. HHS, coverage that in coordination other Treasury, recognizes purposes for with 8.Calculation Individual Mandate meeting requirement. this 26 U.S.C. Penalty 5000A(f)(l)(E). § If applicable an individual fails to pur plan chase an insurance in one the many Exemptions Exceptions to Indi- 7. allowed, ways the individual a pay must vidual Mandate 5000A(b)(l). § penalty. Id. The annual however, mandate, The individual does (1) penalty will be either: a flat dollar per- apply eight categories broad (2) amount, a percentage of the individ sons, exemption virtue of an either if higher ual’s income than the flat rate. exception the mandate or an to the from 5000A(c)(l). However, § Id. the percent The Act out penalty. mandate’s carves age-of-income figure capped is at the na exemptions three from the individual these average tional premium amount for (1) persons religious mandate: with ex- in plans Exchanges.53 bronze-level Id. (2) emptions; legally present aliens not amount, The flat penalty dollar which (3) country; persons. incarcerated floor, equal sets the is $95 $325 5000A(d). §Id. in 2016. Id. $695 (c)(3)(A)-(C). 5000A(c)(2)(A), cat excepts § The Act also five additional Beyond $695, persons except from individual it remains for egories of inflation 5000A(c)(3)(D). (1) adjustments.54 §Id. penalty: individuals whose re mandate premium annual contribution ex quired percentage-of-income The number their for ceeds 8% of household income apply, higher will if than the flat dollar year;52 taxable individuals whose amount, percentage is a set of the taxpay year household income for the taxable is er’s income that is in tax- excess of the filing (defined below the federal income tax thresh filing threshold in 26 U.S.C. 6012(a)(1)).55 5000A(c)(2). 6012(a)(1); § § § old in 26 members In U.S.C. Id. posed year, penalty Care Act and Health to a full for each fordable Plans, “Grandfathered” http://www.healthreform.gov/ coverage equal month of no to one-twelfth newsroom/keeping_the_health_plan_you_ greater figures. of these 26 U.S.C. have.html; USA, 5000A(c)(2)-(3). Families § Grandfathered Plans under the Patient Protection and Afforda- (2010), http://www. Act ble Care available at applies 54. The flat dollar amount to each indi- familiesusa.org/assets/pdfs/health-reform/ dependent taxpayer's vidual and in the house- Grandfathered-Plans.pdf. coverage, hold without minimum essential exceed but will not three times the flat dollar required coverage 52. The contribution for (even persons amount if more than three means, generally, required the amount household). U.S.C. coverage employer- maintain either in an 5000A(c)(2)(A). family’s § penal- A flat dollar sponsored plan or in a bronze-level $2,085 ($695 ty in 2016 would not exceed plan Exchange. offered on an See 26 U.S.C. 3). multiplied by 5000A(e)(l)(A). § percentage taxpayer’s If the individual fails to fulfill the mandate only filing requirement op- certain months as household income exceeds the threshold through Exchange taxable and is allowed event, for the penalty the total subsidy. tax or a average premium credit Id. exceed the national year cannot (c). 4980H(a), § qualified health premium of bronze-level 5000A(c)(l). §Id. plan. is tied to an em- employer penalty failure to offer “minimum essen- ployer’s Individual Mandate 9. Collection of (b). 4980H(a), tial Re- coverage.” Id. Penalty coverage” call that “minimum essential pay penal fails to An who thing not the same as the “essential health or additional subject to criminal ty is not Thus, large employer package.” benefits (B). 5000A(g)(2)(A), penalties. civil penalty long avoid the so as it offers *24 to liens or levies authority use The IRS’s any plan large group in the market in the penalty. to the Id. apply does not state, and plan and is “affordable” interest accrues on § No 5000A(g)(2)(B). provides “minimum value.” Id. (c)(3). The Act contains no enforce penalty. 4980H(b)(l), § IRS, All the See id. ment mechanism. however, employer’s plan, A small must can do is offset practically speaking, pack- include an “essential health benefits taxpaye tax to the uninsured refund owed provide age” and also be “affordable” and r.56 §§ 300gg- “minimum value.” 42 U.S.C. 6(a) (effective 18022(a)(l)-(3). 1, 2014), Jan. compo- the Act’s fourth now review We provides The Act tax incentives for also reducing the number of the nent aimed employers (up employ- small to 25 certain employer penalty. uninsured: ees) purchase to health insurance for their Penalty Employer G. § workers. 26 U.S.C. 45R. imposes penalty, The Act a also housed Penalty 1. Calculation Amount of Code, on certain
in the Internal Revenue penalty depends The amount on whether coverage, if or employers they do offer employee Exchange went to the be- their inadequate coverage, employ- offer to (1) employer’s plan cause the was not (b). 4980H(a), penalty § ees. Id. (2) coverage” “minimum essential or was applies employers average with an of provide either “unaffordable” or did not employees. least full-time Id. penalty value.” The translates “minimum (c)(2). (b), 4980H(a), § employer $2,000 $3,000 per annually. employee (1) a if pay penalty employer: must §Id. 4980H. full-time employees does not offer its in “minimum
opportunity to enroll essen- An “mini- employer that does not offer coverage” “eligible employer- tial under an coverage” mum essential to all full-time sponsored plan” as defined penalty a tax employees faces $166.67 (2) 5000A(f)(2); (one-twelfth § minimum $2,000) or offers es- per month for each (i) “unaffordable,” coverage sential is employees, full-time until the em- of its (ii) of a plan (subject or that consists whose share ployer coverage offers such to an the total of benefits is than exemption employ- cost less for the first 30 full-time (i.e., ees). (c)(2)(D). 4980H(a), (c)(1), provide § 60% does not “minimum val- (3) ue”); employ- particular penalty applies long at least one full-time This for as employee, eligible at least one for a purchases qualified plan ee a health course, always phased years: government can file in over three 56. Of 2% 1% lawsuit, of that suit would in 2016 and thereafter. 26 a civil but cost 2.5% 5000A(c)(2)(B)(i)-(iii). penalty exceed the modest amount. U.S.C. subsidy, employees years enrolls in for even retired tax credit or premium yet are not plan through eligible health an Ex- older who for Medi qualified temporary care. A federal change. Id. reinsurance program employers will reimburse former coverage”57 In the “unaffordable “no early who their retirees and the re allow scenarios, employer minimum value” dependents spouses partici tirees’ (one- penalty per a tax month faces $250 pate employment-based plans. in their $3,000) employee for each who twelfth government The federal will reimburse a (1) employer-sponsored down the turns portion plan’s cost.59 U.S.C. (2) purchases qualified plan plan; (a)(2)(C). 18002(a)(1), Exchange; eligible in an for a premium subsidy tax credit or federal turn to the Act’s fifth component: We 4980H(b)(l). §Id. Exchange.58 expansion, the Medicaid which alone will cover millions of the uninsured. 2. Automatic Enrollment requirement An automatic enrollment H. Expansion Medicaid who have more applies employers *25 expands The Act eligibility Medicaid (2) to employees than 200 elect offer 1396a, § amending subsidies U.S.C. § coverage employees. to their Id. 218a. the section of the Medicaid Act outlining employers automatically Such must enroll what states must offer their coverage employees, new and current full-time who plans. imposes The Act these substantive out, in opt employer’s do not one of the requirements plans, on the states’ starting 90-day plans. waiting Id. The maximum unless otherwise noted: Id.; 42 period applies, rule however. (effective 2014). § 300gg-7 U.S.C. Jan. (1) required States will be to cover (who age pregnant adults under are not Temporary Program 3. Reinsurance covered) already and not up with incomes Early Retirees Employers’ for to of the federal poverty 133% level (“FPL”). 1396a(a)(10)(A)(i)(VIII). uninsured, § To reduce the number of the Id. provides coverage significant change, previ- the Act for immediate This is a because Employer-sponsored coverage offering coverage penalty is not no at all. The for coverage is defined as where the “affordable” capped equal month is an amount employee's required annual contribution to employees during the number of full-time premium than of the is more em- 9.5% $2,000, multiplied by month one-twelfth of (as ployee's household income defined for (subject exemption $166.67 to the for the first purposes premium of the tax credits in the employees). 30 full-time See 26 U.S.C. 36B(c)(2)(C)(i). Exchanges). § 26 U.S.C. 4980H(b)(2), (c). § percentage employee’s This of the income is per capita growth premiums indexed to the plan 59.The submit shall claims for reim- market determined for the insurance as HHS, 36B(c)(2)(C)(iv). bursement and HHS shall reimburse § HHS. Note that Id. purposes of “unaffordable” for the plan definition for of the costs of claims in 80% obtaining subsidy tax credit or $15,000 federal is greater excess of but not than not the same standard is used deter- $90,000. 18002(c)(2). § 42 U.S.C. The reim- exempt mine whether is from January bursements will be available until mandate the individual because individu- 18002(a)(1). federally-sub- § Id. This coverage. Compare al cannot afford id. temporary program gap sidized closes be- 36B(c)(2)(C)(i), 5000A(e)(l). § with id. Exchanges, when the tween now and subsidies, instance, tax with their federal credits employer's penalty, 58. The in this penalty operational. not exceed the maximum does for become Having major covered the Act’s five did not set a base- Act Medicaid ously the mandatory eligibility. for components, compo- line income level we examine the two currently provide do not Thus, (1) many states challenged nents as unconstitutional: par- adults and cover Medicaid to childless (2) expansion the Medicaid the individ- lower income levels. at much only ents ual mandate. required provide States will III. CONSTITUTIONALITY OF children whose families
Medicaid to all
MEDICAID EXPANSION
FPL,
including
up
earn
to 133%
currently
through sepa-
covered
children
plaintiffs challenge the district
The state
Id.
programs.
rate
CHIP
summary
in fa-
grant
judgment
court’s
1396a(i
1396a(a)(10)(A)(i)
)(1)(D),
(VII),
§§
government
plain-
vor of the
on the state
1396a(£)(2)(C).
currently
pro-
must
States
expansion
tiffs’ claim that the Act’s
age
to children under
6 with
vide Medicaid
program,
pursuant
Medicaid
enacted
up to 133% of the FPL and
family income
Clause,
Spending
unduly
coercive
family
through 18 with
ages
children
Dole,
under South Dakota v.
Id.
of the FPL.
up
income
to 100%
2793, 2798,
97 L.Ed.2d
(VI),
1396a(a)(10)(A)(i)(IV),
(VII),
§§
(1987).
below,
given
For the reasons
we
1396a(Z)(2)(A)-(C).
1396a(i )(1)(B)-(D),
is not.
conclude
to at
main-
required
States are
least
eligibility
tain
Medicaid
levels
existing
History
Program
A.
the Medicaid
(that
in place
children
were
adults and
long-standing partnership
Medicaid is a
2010)
Exchange
March
until a state’s
sovereigns
between the national and state
1396a(gg)(l).
fully operational.
*26
place
nearly
been in
for
half a
has
previously
option
had the
Whereas states
1965,
century.
“In
enacted the
levels,
eligibility
to raise or lower their
Act,
seq.,
1396 et
§
42
Medicaid
U.S.C.
as
more restrictive eli-
states cannot institute
Security
XIX of the
Act.”
Title
Social
gibility
policies
until
the new
standards
Reese,
Moore ex rel. Moore v.
637 F.3d
Id.
place.
take
(11th
1220, 1232
Cir.2011); see also Harris
age
under
26 who were re-
Children
McRae,
v.
297, 301,
448 U.S.
100 S.Ct.
ceiving
“aged
were
out” of
Medicaid but
(1980).
2671, 2680,
1263
Reese,
Congress’s
Spending
B.
Power under the
of care and services.”
categories
Clause
(citing
U.S.C.
F.3d at 1232
1396a).
categories
these
§
“Some of
Spending
provides
Clause
mandatory
others are
discretionary, while
“Congress
have
...
to pay
shall
Power
provide
Debts and
for the
(citing 42
common De
states.”
participating
for
general
fence and
Welfare of the United
1396a(a)(10)).
U.S.C.
Const,
I,
8,§
art.
cl. 1.
States.” U.S.
Act,
program
the Medicaid
Under the
Spending
permits Congress
“fix
Clause
expanded
selves as a cornerstone
the terms on which it
disburse
shall
feder
explained
coverage.
health care
As
above
money
al
to the States.” Pennhurst State
11(H),
expands
the Act
Medicaid
Halderman,
Section
Hosp.
&
v.
Sch.
1531, 1539,
significant Medic
eligibility
provides
L.Ed.2d 694
(1981). “[L]egislation
pursuant
enacted
impoverished.
to the
As a
aid subsidies
spending power
much in
the nature
expansion, an
result of the Act’s Medicaid
funds,
of a
in return for
contract:
federal
million unin
9 million of the 50
estimated
agree
comply
federally
the States
with
by
for health care
sured will be covered
imposed conditions.” Id. at
101 S.Ct.
(and
million
16 million
2016 and 17
at 1540.
2021).62
primary
There are four
restrictions on
government
pay
will
100%
The federal
legislation
pursuant
Spend
enacted
to the
with the increased
of the fees associated
First,
ing Clause.
the exercise of the
begin-
eligibility
Medicaid
and subsidies
spending power
pursuit
must be
2016;
Davis,
percent-
general
ning
Helvering
in 2014 and until
welfare. See
v.
619, 640,
904, 908,
301 U.S.
year
drop gradually
then
each
age will
(1937). Second,
L.Ed. 1307
the conditions
in 2020. 42
reaching
until
90%
U.S.C.
receipt
on the
of federal funds must be
government
The federal
1396d(y)(l).
reasonably
legislation’s
related to the
stat
expenses as-
will not cover administrative
Dole,
goal.
ed
implementing
with
the new Med-
sociated
Third, Congress’s
at 2796.
intent to condi
policies.
id. Under 42
icaid
See
U.S.C.
*27
particular
a
tion funds on
action must be
1396c,
§
plan
a state whose
does not com-
unambiguous and must enable the states
ply
requirements
with the
under
1396a
knowingly
exercise their choice whether
by
noncompli-
HHS of its
will be notified
Pennhurst,
17,
at
participate.
451 U.S.
ance,
not
payments
and “further
will
be
Finally,
Rather,
argue
plaintiffs
the state
violates an addi
expansion
the Medicaid
Supreme
length
cussed
Court
spending
limitation on the use of
tional
C.
Machine Co. v. Davis.
Charles
Steward
encourage
legislation,
state
one
case,
corporation challenged
In that
spending power
not from the
that derives
employment
an
tax
imposition of
under
alone,
the Tenth Amend
from
but also
newly
Security Act. Ad-
enacted Social
powers
of certain
to the
reservation
ment’s
dressing
corporation’s argument
Const,
X;
amend.
see Charles
states. U.S.
government
improperly
federal
Davis,
v.
301 U.S.
Mach. Co.
C. Steward
in the
participation
coerced states into
So-
883, 890,
548, 585,
ble
related
at
was
apply
never devised a test to
it
Court has
Dole,
the state
Dakota v. Dole.
South
many
has left
circuits with the conclusion
challenged
Dakota
23 U.S.C.
of South
doctrine,
recognized by
that the
twice
158,
Secretary
which directed
Court, is not a viable
defense to
percentage
withhold a
Transportation to
See,
Spending
legislation.
e.g.,
Clause
highway funds otherwise allocable
federal
Bd.,
v. Bogalusa City
Pace
Sch.
403 F.3d
if
to maintain a
to the states
states failed
(5th Cir.2005)
(“It
(en banc)
272,
goes
drinking-age requirement of
minimum
that,
saying
without
because states have
at 2795.
years. 483 U.S. at
independent power
lay
and collect
Congress may
attach
The Court noted
taxes, they
ability
retain the
to avoid the
of federal funds
receipt
conditions on the
imposition
regulation
of unwanted federal
objectives,
policy
including
to meet certain
simply by rejecting
funds.”);
federal
A.W.
could not otherwise
those
Schs.,
Jersey City
v.
Pub.
341 F.3d
Id. at
through
regulation.
meet
direct
(3d Cir.2003)
(noting
243-44
206-07,
After ana-
1267
noted,
so it is not without
“The reluc
And
serious
court
the district
As
thought
this
and some hesitation
we con
circuits to deal with
of some
tance
legal
expansion
and clude that the Act’s
Medicaid
potential
of the
because
issue
unduly
to a
is not
coercive under Dole and
is not entitled
complexities
factual
Machine. There are several fac
courts deal Steward
weight,
deal of
because
great
tors, which,
us,
are determinative.
complexities of
day
the difficult
every
with
First,
Medicaid-participating
set forth
states
principles
Constitutional
applying
beginning
were warned from the
Supreme
Court.”
and defined
HHS,
program
716 Medicaid
reserved
v.
Florida ex rel. McCollum
(N.D.Fla.2010).65
1120,
right
changes
program.
If
to make
to the
1160
F.Supp.2d
(“The
alter,
§
right
42
1304
See U.S.C.
government is correct
amend,
repeal
provision
all condi
of this
place any
able to
should be
chapter
hereby
is
reserved to the
money
gives
on the
it
Con
tions wants
McRae,
301, 100
states,
448
at
gress.”);
must be
U.S.
then the
(noting “[a]lthough participation
at
say it.
the one to
entirely
program
optional,
the Medicaid
now,
find it a reasonable conclu-
For
we
participate,
once a State elects to
it must
instructs that
the Tenth
sion that Dole
comply
requirements”
with the
that Con
certain limitations on
places
Amendment
Indeed,
gress
impose).
sees fit to
Con
namely, that Con-
congressional spending;
gress has made numerous amendments to
so burden-
place
cannot
restrictions
gress
program
inception
since its
funds
and threaten the loss of
so
some
(listing
Note
U.S.C.
1396a
amendm
integral
great
important
state’s
ents).66
previous
In each of these
that the state
function as a state —funds
amendments,
given
the states were
rely
heavily
part
come to
of its
has
with the
option
comply
changes,
or lose
to its citizens—as to com-
everyday service
part
funding.
all or
of their
1396c.
participate
“option-
in the
pel the state
None of these amendments has been
point
is the
where
legislation.
al”
This
unduly coercive.
struck down as
”
“
Dole,
compulsion.’
‘pressure turns into
Second,
211,
government
(quoting
the federal
will
at
1268
costs asso
at
at
pay
(finding
incidental administrative
S.Ct.
no coer-
2016;
expansion until
ciated with the
after
“all
cion when
South Dakota
if
would lose
which,
increasing per
they will bear
she adheres to her chosen course as to a
cost, capping at 10% in
centage of the
drinking age
suitable minimum
is 5% of
1396d(y)(l).
§
If states
2020.67 Id.
bear
spec-
the funds otherwise obtainable under
expansion, the idea that
little of the cost of
highway grant programs”).
ified
being
spending
states are
into
coerced
together,
Taken
these factors convince
money
ever-growing program
in an
seems
Medicaid-participating
us that
states
to us to be “more rhetoric than fact.”
just
theory
have a real
choice—not
but
Dole,
who choose not to
participate
expan-
provisions
Two constitutional
govern our
sion will lose all of their
funding,
Medicaid
analysis
of whether
acted within
nothing in the Medicaid Act states that
authority
enacting
its commerce
in-
foregone
Indeed,
this is a
conclusion.
dividual mandate:
the Commerce Clause
Act provides
Medicaid
HHS with the dis-
Necessary
Proper
and the
Clause.
merely
cretion to withhold all or
a portion
Const,
I,
3,18.
U.S.
art.
els.
funding
noncompliant
from a
state. 42
1396c;
see
Virginia
U.S.C.
also West
v.
Seven words in the Commerce Clause—
HHS,
291-92; Dole,
F.3d
regulate
Commerce ... among
“[t]o
argument,
plaintiffs
participate.
At oral
the state
argument
ex-
choose to
This
is not
however,
pressed a
persuasive,
concern that Medicaid
expan-
costs would
as to whether the
coercive,
larger
be even
because the
man-
sions themselves are
because
greatly
date would
increase the number of
increase in enrollment would still occur if the
persons
currently eligi-
in Medicaid who are
upheld,
mandate were
even if the Medicaid
ble but for one
expansions
or another do not
reason
were struck down.
*32
I,
8,
States,”
principal
art.
cl. 3—have We therefore review the
several
id.
Com-
200-year
per-
over the
spawned
precedents
debate
merce
that
Clause
inform our
scope
power.
of this enumerated
analysis
missible
of the difficult question before us.
many years,
Supreme
Court de-
extensive,
For
Although
survey
this
is neces-
power
commerce
as
Congress’s
scribed
sary to
understanding
rudiments of the
“buying
“traffic”—the
and sell-
regulating
Supreme
existing
Court’s
Commerce
interchange
commodities”—
ing, or the
we,
Clause doctrines that
as an inferior
states,
among
including
“intercourse”
and
court,
III
apply.
Article
must
Ogden,
v.
transportation. See Gibbons
Wheat.)
(9
1, 189-90,
Darby, 312 U.S.
61 S.Ct.
85 shortages,
price instability,
attendant
(1941);
L.Ed. 609
NLRB v. Jones &
obstructions
commerce. Id.
Laughlin
Corp.,
Steel
301 U.S.
Plaintiff
operated
Filburn
a small farm
(1937).
615,
pursued
other methods to eliminate
(1995),
the S.Ct.
case.” Id.
The
States v. Morrison
E. United
pointed
“[g]en-
Morrison
out that
Court
not,
der-motivated crimes of violence are
decision,
Supreme
In another 5-4
Morrison,
any
phrase,
in
sense of the
economic activi-
States v.
United
Court
ty.” Id. at
marijuana, while
regu-
found similar
Supreme
Court
locally
provide her with
caregivers to
latory
underlying
concerns
both the CSA
7,
at
marijuana at no cost. Id.
grown
AAA
in
provisions
in Raich and the
wheat
at 2200.
S.Ct.
rising
prices
market
Wickard.
Just as
agents
federal
seized and de
After
grown
draw wheat
for home con-
could
stroyed
plants,
Monson’s cannabis
sumption into the interstate market and
They acknowl
plaintiffs sued.
Id.
Raich
depress prices,
“parallel
making
concern
Congress’s
within
edged that the CSA was
marijuana grown
it
to include
appropriate
authority and did not contend
commerce
consumption
for home
in the CSA is the
of the CSA was unconsti
section
high
likelihood that
demand
at 2204.
Id. at
125 S.Ct.
tutional.
marijua-
market will
interstate
draw such
Instead,
solely that the
they argued
CSA
na into that market.” Id. at
125 S.Ct.
their
applied
was unconstitutional as
cases,
at 2207. In both
there was a threat
manufacture, possession,
consumption
commodity
of unwanted
diversion that
personal
cannabis for
medical use.
Id.
disrupt Congress’s regulatory
could
con-
7-8, 125
at
at 2200.
S.Ct.
trol over interstate commerce. Id.
limit-
rejecting
plaintiffs’ “quite
Court,
According to the Raich
Wickard
as-applied challenge, the Raich Court
ed”
“Congress
regulate
established that
can
“firmly establishes
stated that its case law
activity
intrastate
that is not itself
purely
power
regulate purely
local
Congress’
‘commercial,’
produced
in that it is not
part
of an economic
activities
sale,
regulate
if it concludes that failure to
activities’ that have a substantial
‘class of
activity
that class of
would undercut
on interstate commerce.” Id.
effect
regulation of the
market in that
interstate
Supreme
at 2204-05. The
125 S.Ct.
commodity.”
at 2206.
that, in
emphasized
assessing Con-
Court
Characterizing the similarities between the
power,
commerce
its review was
gress’s
“striking,”
plaintiffs’ case Wickard
“modest one”: “We need not determine
explained
the Raich Court
both
“[i]n
activities,
respondents’
taken
whether
cases,
squarely
regulation
within
substantially
inter-
aggregate,
affect
pro-
Congress’
commerce
because
fact,
only
but
whether
state commerce
commodity
meant for home
duction
concluding.”
a ‘rational basis’ exists for so
marijuana,
be it wheat or
has
consumption,
at 2208. The Raich
Id. at
supply
a substantial effect on
and demand
“[wjhen Congress
Court commented
in the national market for that commodi-
prac-
of a
decides that the ‘total incidence’
18-19,
ty.” Id. at
2206-07.
market,
a national
poses
tice
a threat to
opined that the failure
The Raich Court
class,” and it
may regulate the entire
production
pos-
regulate
intrastate
“legislate
with scientific exacti-
need
marijuana
“gaping
would leave a
session of
(quota-
Id. at
1279
297, 304,
234, 247,
4
80 S.Ct.
L.Ed.2d
35-36,
at 2216-17. U.S.
125 S.Ct.
Id. at
clear.
(1960) (alterations
original) (quoting
Second,
submitted
268
Scalia
Justice
Writings
(Gail-
noneconomic
Madison 383
may regulate even
VI
“Congress
of James
1906)).
ed.,
a neces-
regulation
if that
It
activity
lard Hunt
reaffirms
local
regulation of
general
of a more
sary part
powers
the incidental
neces-
Congress has
125 S.Ct.
commerce.” Id.
interstate
into
sary
carry
powers
its enumerated
question” then be-
2217. The “relevant
effect.
are
the means chosen
“whether
comes
definitive
Supreme
The
Court’s most
the attainment of
‘reasonably adapted’ to
Necessary
Proper
and
statement of the
pow-
commerce
end under the
legitimate
function remains Chief Justice
Clause’s
er.” Id.
v.
Marshall’s articulation
McCulloch
relying
on these Com
In addition
legitimate,
“Let the end be
let
Maryland:
cases,
and the
parties
both
merce Clause
constitution,
scope
it
of the
be within
separate analy
court conducted
district
appropriate,
are
and all means which
Necessary
Proper
and
Clause’s
sis
end,
plainly adapted to that
which are
some
for the Act. We review
implications
prohibited,
which are not
but consist with
to that
principles relating
foundational
constitution,
spirit
the letter and
are
Clause,
focusing our attention
United
(4 Wheat.) 316,
constitutional.”
U.S.
-,
Comstock,
v.
560 U.S.
States
(1819). Thus,
legis
81. The General prisoner must "make all rea- is domiciled or tried to "assume care, sonable responsibility efforts to cause” the state custody, in which for his and treat- mates”). concluded stat final factor —the the fifth and On “ reasonably adapted 4248 is Comstock Court scope narrow ute’s —the pursuing means of narrowly tailored sweeping “too its the statute found legitimate as a fed interest Government’s § 4248 and an link between and the scope” responsible in the adminis eral custodian too atten I “not Article enumerated *43 prison system” and thus did tration of its -, at 1963. at 130 S.Ct. uated.” Id. general police with a not endow that Lo concluded Supreme Court -, at 1965. power. Id. at 130 S.Ct. should not that courts pez’s admonition did not upon inference” inference “pile judgment, in the Although concurring to the respect with any problems present Alito82 did Kennedy and Justice Justice Lo (quoting statute. Id. civil-commitment majority opinion. join the Court’s 1634). at at 115 S.Ct. pez, 514 U.S. Kennedy’s concurring Because Justice discerned the Comstock Court Specifically, and opinion focuses on Commerce Clause that power that “the same enumerated issues, provide we extended federalism criminal creation of a federal justifies the it here. treatment of statute, justifies that the additional Kennedy’s disagree- primary Justice dissent powers that the implied federal majority ap- the concerned its ment with justifies civil commit legitimate, considers rationality” plication of a “means-ends test. at -, § 4248 as well.” Id. ment under ‘rationally that terms “[t]he He advised Supreme Court at 1964. The 130 S.Ct. must be em- related’ and ‘rational basis’ au “Congress’s that rejected the notion care, if particularly with either is to ployed step no more than one thority can be test.” Id. at be used as a stand-alone a enumerated specifically from removed J., -, (Kennedy, 130 at 1966 con- S.Ct. -, at 130 S.Ct. Id. power.” Kennedy curring). Justice observed emphasized
Lastly,
Supreme
typically
the
Court
“rational
em-
phrase
the
basis”
“only
contexts,
a
applied
§
in Due
ployed
4248 had been
Process Clause
prisoners.”
very
Id. at
deferential
adopts
fraction of federal
where the Court
small
-,
(citing
congressional
at 1964
evidence review of
acts.
Id. Under
130 S.Ct.
subject
Optical
applied
Lee
test
such due
have been
that “105 individuals
188,000
settings,
merely
asks
process
in-
§
out of over
federal
at-,
Comstock,
"necessary” need not
1970. While the word
560 U.S.
ment.”
4248(d)).
employed by
that the means
Con-
(quoting
If the
connote
18 U.S.C.
consents,
“absolutely necessary”
gress
or "indis-
prisoner
be
will be released
state
requires
'appropri-
pensable,” "the term
Id. at
appropriate official in that state.
-,
by the
link between a
conferred
If the state de-
ate'
We therefore must refine our under-
ceptualized is not
so
standing of
nature of
clear,
we
categori
nor do
find this sort of
subject
mandate and the
matter it seeks to
cal thinking particularly
helpful
assess
regulate. The uninsured have
amade
de-
ing
constitutionality
cision,
unprec
of such
default,
consciously
either
*48
all,
congressional
edented
action. After
in
direct
their financial resources to some
choosing.not
purchase
insurance,
to
other
health
item need than health insurance.
the
regulated by
individuals
the
Congress
activity”
described “the
sought
hardly
to
in
regulate
“pro
as “economic
mandate are
involved
the
and financial de-
duction, distribution,
consumption
cisions
how
and
about
and when health care
of
is
for,
paid
commodities,” which
and when health insurance
was the
defini
broad
18091(a)(2)(A)
purchased.”
42
provided by
U.S.C.
tion of
the
economics
Raich
added).
(emphasis
25,
It
such
at
deemed
deei- Court.84 545 U.S.
125
at 2211
S.Ct.
may
by
84. The
that
Lopez
fact
conduct
be said to
least
Court.
have
as defined
not,
alone,
by
economic
does
that fact
apparent.
and
make
Morrison
this observation
effects
activity,”
render the conduct "economic
at
omitted).
legal conception,
practical
but a
(citation
technical
marks
quotation
and
business”).
one,
the course of
Rather,
can
drawn from
to the extent
uninsured
Yet,
of
“active,”
activity
though
consists
these dichotomies
confusing
their
to be
said
behavior,
been,
with
they
of
at least
absence
such
doctrinal vacillations have
put,
Simply
to health insurance.85
respect
overarching goal:
one
by
animated
appear
neatly
cannot be
individual mandate
judicial-
provide
meaningful,
to
courts with
activ
the “economic
under either
classified
by
limiting principles
ly administrable
headings.
activity”
“noneconomic
ity” or
of its
Congress’s
to assess
exercise
power.
Clause
Commerce
in the conclu-
confirms the wisdom
This
attempts throughout
the Court’s
sion that
formulated, we
Properly
perceive
by “semantic or formalis-
history to define
before us to be whether the fed
question
that were
categories those activities
tic
government can issue mandate
eral
not” are
and those that were
commerce
purchase and maintain health
Americans
569,
at
Lopez,
to fail.
U.S.
doomed
private
from a
for the
company
insurance
J.,
(Kennedy,
concur-
115 S.Ct.
entirety
types
lives.86 These
their
Compare
v. E.C.
ring).
United States
Every
legion.
decisions are
purchasing
Co.,
1, 13, 15 S.Ct.
Knight
156 U.S.
Americans decide what
day,
products
(1895)
manu-
(approving
L.Ed. 325
save,
buy,
invest or
and how to
where to
dichotomy), with
facturing-commerce
contingencies
such as their
pay
future
States, 221
v. United
Standard Oil Co.
retirement,
education,
their children’s
1, 68-69,
L.Ed.
government
con
their
care.
manufacturing-com-
(declaring
that embedded
the Commerce
tends
“unsound”).
also
dichotomy
See
merce
ordi
power
override these
Clause
572, 115
at 1636
Lopez, 514 U.S. at
nary
and redirect those funds to
decisions
J., concurring)
(noting “the
(Kennedy,
theory,
purposes.
other
Under this
be
of a
recognition
importance
Court’s
money
spend
Americans have
cause
pow-
practical conception of
commerce
inevitably make decisions on where
must
Wickard,
er”);
317 U.S.
it,
gives
spend
the Commerce Clause
(stating
“questions
power
compel
power
direct
refer-
to be decided
in order to further
spending
an individual’s
con-
give
formula which would
ence to
such as
overarching regulatory goals,
its
‘pro-
force to
trolling
nomenclature such
reducing
number
uninsureds
”);
v.
and ‘indirect’
& Co.
duction’
Swift
uncompensated health care.
the amount of
States,
375, 398, 25 S.Ct.
United
gov-
answering
whether the federal
(observing
to Americans 301 U.S. S.Ct. minimum issue a mandate conditions, 100, private working Darby, from com- 312 chase health insurance U.S. 451; examine a of is- limit panies, production number 61 S.Ct. of wheat we next (1) Wickard, consumption, nature for home 317 unprecedented sues: U.S. mandate; 111, 82; Con- S.Ct. regulate individual whether 63 the terms of authority contracts, of its commerce gress’s exercise insurance South-Eastern Un derwriters, and meaningful limiting 533, 1162; affords sufficient 322 64 U.S. S.Ct. far-reaching impli- principles; and prevent discrimination in hotel accommo dations, Motel, cations for our federalist structure. Heart Atlanta 379 U.S. 241, 348, services, 85 S.Ct. and restaurant Unprecedented, C. Nature the Individ- Katzenbach, 294, 377; 379 85 U.S. S.Ct. ual Mandate prevent production home of mari Raich, extensively juana Both have cited to parties purposes, medical 545 1, previous Supreme opinions defining Court 125 U.S. S.Ct. 2195. What the Court scope of the Commerce Clause. Eco- done interpret has never the Commerce nomic such as the one contained mandates Congress Clause to allow to dictate the unprecedented, however, in the Act are so financial decisions of Americans through unable, government that the has been ei- an economic mandate.
ther in or at its oral argument, briefs Both the Congressional Budget Office point this prece- Court (“CBO”) and the Congressional Research constitutionality. dent that their addresses (“CRS”) Service have commented on the Nor independent does our review reveal unprecedented nature of the individual such a precedent. mandate. When of an the idea
The Supreme Court has sustained Con-
to purchase
mandate
health insurance was
gress’s authority to regulate steamboat
first floated
CBO
stated that a
1994,
traffic, Gibbons,
1;
22
trafficking
U.S.
requiring
“mandate
all
pur-
individuals to
lottery
lines,
tickets across state
The Lot-
chase
would
insurance
be an un-
Case,
tery
321,
23
47
S.Ct.
Spec.
precedented form of federal action.”
(1903);
L.Ed. 492
carrying
woman
Drv,
Cong. Budget
Office,
Studies
across state lines for
purposes,” Budgetary
“immoral
Treatment
of an Individual
States,
308, 320,
Hoke v.
227
United
U.S.
Buy
Mandate
Health
1
Insurance
(1913).
281, 283,
In the provide modern the Commerce would a solid constitutional Clause has been used to regulate labor legislation containing foundation for practices, & Laughlin Corp., Jones requirement Steel to have health insurance.
1289 power reason to requirement a would be have believe was such Whether exist.”). not to thought under Commerce constitutional perhaps challenging the most Clause Traditionally, Congress sought to has a as it posed proposal, such question it favors encourage activity commercial Congress novel whether is a issue discouraging while what does not. This require an individual this clause to use only prior instructive. Not have con- a good a service. purchase to gressional actions asserted Cynthia Brougher, Staman Jennifer & claimed, “contain indication they now some Cong. Serv., Requiring R. Research precisely opposite assumption.” of Id. A to Health Individuals Obtain Insurance: 910, 117 at 2372. Instead of re- at S.Ct. Analysis (2009). 3 Constitutional action, has to en- quiring Congress sought Congress has before The fact that never courage it. encour- The instances such is tell supposed authority this exercised ubiquitous, example but the agement noted, has As ing. provides particularly of flood insurance a obli imposing utter lack of statutes “the how relevant illustration of the individual (notwith on the executive gations States’ departs mandate from exer- conventional course standing the attractiveness congressional power. cises of an ab Congress), suggests assumed to passing In National Insurance Flood Printz, power.” of such sence 1968, Congress recognized Act of 2371; 907-08, 117 see also Va. S.Ct. time flood “from to time disasters have Stewart, Advocacy v. Prot. & Office U.S. -,-, hardships personal created and economic required distress have unforeseen (“Lack of historical L.Ed.2d placed relief measures and have disaster in can a constitutional precedent indicate increasing on re- burden the Nation’s Maine, 527 U.S. firmity.”); Alden v. 4001(a)(1). Despite sources.” U.S.C. 743-44, 144 L.Ed.2d pro- expenditures public considerable (1999). if powers, any, could be Few floods, designed those grams prevent to compel attractive to than more pro- had “not sufficient to programs been products. Yet purchase of certain ling growing exposure adequately against tect era, if we on the modern when even focus 4001(a)(2). future to flood losses.” power under the Commerce congressional however, response In to Con- problem, this height, Congress has been at its Clause everyone did not who owns gress require authority. has not this Even still asserted purchase flood plain house in a flood Depression, a World in the face a Great fact, Congress not even insurance. did shocks, War, War, recessions, oil Cold anyone a new require who chooses to build inflation, unemployment, Congress buy in a insurance. plain house flood sought require purchase never Rather, Congress incen- created series of bonds, savings force a higher or war wheat designed encourage voluntary pur- tives greater consumption of American rate or incentives of flood insurance. These chase require every pur American to goods, or requiring included flood insurance before more See chase a fuel efficient vehicle.87 federal fi- the home owner could receive Printz, at 2370 (“[I]f federally regulated use nancial assistance or Congresses ... avoided earlier 4012a(a), (b)(1). §id. highly power, attractive we would loans. See of this ding activity. Compare legislation compelling the lack of history activity long forbid- *51 mandate,” Without an “individual the the United States. Given the attractive program largely flood insurance has been ness of the power compel behavior Bryant Note, Spann, failure. See J. order important problems, solve we find Going the Third Down Time: Senator have, illuminating histor Americans Kerry’s Bill . Could Save the ically, subject been only to a limited set of Reform Drowning National Flood Insurance personal Pro mandates: serving juries, reg on (1994) (“One gram, L. draft, 28 Ga. Rev. istering for the filing returns, tax of the astounding most facts to surface and responding to the census. These man from the Midwestern flood of 1993 was dates are in the nature of duties owed to that so eligible homeowners few for flood government the attendant citizenship, actually insurance had it. Of the states they contain clear foundations impacted by flood, Illinois had the constitutional text.90 Additionally, all highest percentage eligible households these mandates involve a directly citizen covered, with 8.7%.”). key One reason for interacting government, with the whereas this low participation is not surprising. the individual requires mandate an individ relief, issue, “Disaster a political as is al ual to enter into a compulsory contract most politician invincible. No wants to be private with a company. In these re on record opposing relief, disaster par spects, the individual mandate sharp is a ticularly for his or her own constituents.” departure prior from all exercises of feder Id. at People 602. living in a plain flood al power. know that they even if do not have insur The draft is an example excellent of this ance, they can virtually count on guar sort duty, particularly as it is upon one availability anteed funds.88 federal Nev which the Supreme Court spoken. has ertheless, despite the unpredictability of Cases, Selective Law the Su- Draft
flooding,
inevitability
that floods will preme Court reviewed challenges to the
plains,
strike flood
and the cost shifting
draft
in 1917 upon
instituted
entry
inherent
in uninsured property owners
the United States into World War I. 245
seeking
funds,
disaster relief
Congress has
(1918).
U.S.
1291
so,
doing
In
open
mili-
the
market.
Con-
the
to render
on
of
citizen
obligation
cal
artificially
was
to
right
gress
able
inflate the
in case of need and the
tary service
simultaneously
by
of wheat
decreas-
price
at 161.
compel it.” Id. at
S.Ct.
to
ing supply
increasing
demand. But
very
striking by comparison
how
It
not
striking
similarity
for its
to
Wickard
is from
economic mandate
different
this
case,
but
how different it is.
present
our
First,
represent the
it
not
the draft.
does
Although
represents
zenith of
Wickard
government
duty
a
to the
solution to
owed
under the Commerce
Congress’s powers
Moreover,
citizenship.
of
as a condition
Clause,
regulation
the wheat
therein is
draft,
no
in the
unlike
it has
basis
remarkably
than the
less intrusive
individ-
nation,
history
long
much less a
our
ual mandate.
passed the
Congress
storied one. Until
Act,
Despite
had
the fact that Filburn was a com
to
commerce
power
regulate
far
farmer92 and thus
more ame
authority
to issue an eco- mercial
not included
power
Congress’s
not nable to
commerce
than
Congress seeks
nomic mandate. Now
citizen,
ordinary
legislative
to
a
class of
an
act did
only
reach
new
purchase
him to
more
require
ef- not
wheat.
decisions whose
“activity”—financial
Instead,
had
number of
in the
Filburn
other
fects
felt some time
future —but
are
open
him.
have
options
a
to
He could
decid
through
it
to do so
heretofore
wishes
make
ed to
do with the amount wheat
power:
economic mandate.
untested
grow.
He could have
he was allowed
unprecedented
Having established
agricultural
redirected his efforts to
en
mandate and the
nature of the individual
required less wheat. He
deavors that
any Supreme
case address-
lack
part
farming
have
ceased
of his
could
even
issue,
some
ing
apply
we are left to
this
regulation
wheat-acreage
operations.
principles derived
basic Commerce Clause
though it
imposed
Congress, even
lies
Morrison,
Wickard, Lopez,
largely from
pow
at the outer bounds of the commerce
and Raich.
er,
a
a
was
limitation —not mandate —and
D.
left Filburn with
choice.
Act’s eco
Aggregation
Wickard
insurance,
purchase
on
nomic mandate
Wickard,
It is
surprising
not
no
contrary,
leaves
choice
is more
“perhaps the
Lopez
Court considered
far-reaching.
reaching example of
most far
Commerce
Although
appears,
distinction
at
authority
intrastate
activit
this
Clause
over
blush,
implicate liberty concerns
y,”
at
115 S.Ct. at
first
514 U.S.
it
appeal,93
at
in truth
strikes
perspective
the best
issue on
provides perhaps
Congress’s
at the heart of whether
has act
an economic mandate.
restric
acreage
power.
ed within its enumerated
Individu
tions on Roscoe Filburn’s wheat
subjected
this
purchase wheat
als
economic mandate
potentially forced him to
words,
repre-
Congress's
In
argued
Raich
S.Ct. at 92 n. 30.
other
91. Some have
now
suppliers operating
regulation only applied
high-water
Congress’s
com-
sents the
mark
commerce,
though
authority.
more
in the stream of
even
some
merce
We discuss Raich in
suppliers
those market
also consumed
detail
below.
portion
at
of wheat
home.
enacting
Agricultural Adjustment
counts,
Wickard,
93.Among
dis-
apparently
other
the district court
Act
at issue
process
plaintiffs’
due
sought
reaching
farmers
missed the
substantive
to avoid
subsistence
challenge
Amendment. Flori-
surplus
leave
under
Fifth
production did not
whose
HHS,
Thus,
F.Supp.2d at 1161-62. That
da v.
exempted
sale.
small farms from
Wickard,
ruling
appeal.
is not on
quota.
130 n.
See
],
voluntary
gation principle
choice to enter
the regulat-
have not made
[Wickard
commerce,
activity
instead
apparent
the stream of
but
ed
was of an
commercial
Morrison,
imposed upon
that choice
them
having
character.”
611 n.
government.
suggests
This
the federal
1750 n. The Court there-
*53
they
that
from
traditional
removed
expansion”
resisted “additional
subjects of Congress’s commerce authori-
aggregation
substantial effects and
doc-
ty,
regulated
in the same manner that the
Lopez,
trines.
moved
the traditional
of
question
before us is whether Con
Congress’s
authority
commerce
virtue
gress may regulate individuals outside the
of
cast of their activity.
the noneconomic
commerce,
stream
theory
of
that
departure
power
This
from commerce
those
financial
“economic and
decisions” to
norms is made all the more salient when
substantially
avoid commerce themselves
aggregation,
we consider
of
principles
affect interstate commerce. Applying ag
chief addition of Wickard
the Commerce
an
gregation principles to
deci
individual’s
may
Aggregation
Clause canon.
suffice to
purchase
product
sion not to
would ex
bring
non-regulable,
otherwise
“trivial” in
pand the substantial effects doctrine to one
of
activity
stances
intrastate
within Con of unlimited scope. Given the economic
gress’s reach if the cumulative effect of
reality of our
marketplace, any
national
(i.e.,
activity
this class
the intrastate
person’s
purchase
good
decision not to
activity
together
many
“taken
with that of
would,
aggregated, substantially
when
af
situated”)
similarly
others
substantially af
fect
commerce in
good.95
interstate
that
Wickard,
fects interstate commerce.
317 From
standpoint,
a doctrinal
we see no
127-28,
U.S. at
connect
this conduct to interstate com-
the
factor to be added to
constitutional
require
merce would
“but-for causal
equation.
reject-
the
Court has
Supreme
chain” that
ed,
regulate
example, Lopez
majority
as would allow
For
in
the vast
(firearm
Morrison,
posses
anything.
regulated
of the
behavior
sion)
possess an interstate
S.Ct. at 1752.
did
character.97
case,
jurisdictional
staggering proportion
its
element.
In
such
97. A
of the firearms in
one
expert
transported
government’s
the
have
across state
own
witness testified
America
been
lines,
the
in
possessions
firearms
the United States
and thus the
issue in
95%
transported
Lopez
were
across
state lines.
See
likely did
have
sufficient nexus
Felons, Firearms,
Newton,
thus,
Brent E.
and Fed-
commerce —and
were within
interstate
Reconsidering Scarborough
Light
eralism:
Congress’s regulatory authority.
wake
J.App.
Lopez,
681-82
many
challenged
Lopez,
defendants
their
&
Prac.
Process
(2001).
& n.53
prosecutions
under
felons-with-firearms
1202(a),
Instructively, Congress
its cue
§
later recodified
took
from
statute —18 U.S.C.
Lopez
Supreme
Supreme
922(g)
Court after
amended
as 18 U.S.C.
—that
require
an
distinguished
922(q) by
the Gun-Free School Zones Act to
Court
from
virtue of
However,
Supreme
ultimately
sweeps
The individual mandate
too
broadly
way.
fact insufficient to save the
another
found this
stat
Because the
Rather,
Supreme
prior
Court com
ute.
Court’s
Commerce Clause
interstate-tying
already-existing
an
element in
cases all deal with
mented that
activi
ensure,
ty
through
possibility
itself “would
the mere
statute
—not
future
(in
inquiry,
[activity]
activity
case,
this
case-by-case
health care con
sumption)
affects
question
implicate
interstate
commerce.”98
that could
interstate
Lopez,
mere fact of an individual’s
government’s
problem
first
with
commerce, and
their
stantially
limiting
interstate
factors is
lack
proposed
affects
relevance.102 These five
them at
constitutional
regulate
therefore
EMTALA,
rejected
Supreme
102. Court has
similar
U.S.C.
1395dd.
101. See
reprieve
Commerce Clause
regard,
plaintiffs point
calls for a
from
out that the
this
upon
unique-
the ostensible
to a
restraints based
government's contention amounts
boot-
being
problem
regulat-
government's
gravity
ness
of the
argument.
strapping
Under
instance,
Breyer's
powers
theory,
enlarge
ed. For
Justice
dissent
Congress can
its own
majority’s
Lopez attempted to
focus
by legislating a
deflect
Clause
under the Commerce
existence,
limiting principles specifically,
state-
its
externality into
and then
market
—
922(q)
upholding §
would enable
claiming
fix
ment that
extra-constitutional
is re-
an
government
"regulate any
activ-
the federal
quired.
comprising
govern-
nursing
factual criteria
requirements,
care
and burial
argument
government’s
costs. Under the
“uniqueness”
proposed
ment’s
are not lim-
limiting
there is
any
principles,
why
no reason
iting principles rooted
constitutional
similarly compel
could not
Amer
understanding
power.
commerce
icans to
against
insure
number of un
Rather,
ad
they are
hoc factors that—
foreseeable but
High
serious risks.103
apply
fortuitously happen
the health
—
cost-shifting
premiums
costs and
are
insurance
health care
industries.
simply
care,
not
to hospital
limited
but
They speak
complexity
more to
disabled,
occur when
are
individuals
can
problem
than
being regulated
regulat-
work,
accident,
not
experience
need
ed
decision’s relation
interstate com-
care, die,
nursing
myriad
other insur
They
limiting
merce.
principles,
contingencies.
ance-related
limiting
but
circumstances.
gives
This
problem
rise to second fatal
Apparently recognizing that
these fac-
with the government’s proposed limits:
subjects
appear
many
tors
worthy of
administrability.
are at
We
a loss as to
regulation,
government
acknowledged
how such
criteria can
fact-based
serve as
at oral
argument
presence
mere
“judicially
the sort of
enforceable” limita
of many of
factors is not
these
sufficient.
tions on the
power
commerce
examples
Presented with three
of indus-
repeatedly
Court has
emphasized
tries characterized
some or all of these
as necessary to that
power.
enumerated
care,
market deficiencies—elder
other
Lopez,
1633;
such
itself,
a
argument
upon
sleight
to its utmost ex-
relies
convenient
may be exercised
limitations,
tent,
to
from the
no
oth- of hand
deflect attention
cen
acknowledges
in the
tral issue
the case: what is
nature
prescribed
er than are
constitution.”
Gibbons,
may
being regulated by the
If
of the conduct
indi
mandate,
may Congress
in-
vidual
reach
compel
purchase
individuals to
company,
a
it? Because an individual’s decision to
private
surance from
product
a
so
purchase
forego purchasing
of other
is
incon
similarly compel the
private industry, regardless
gruent
previously
with the “activities”
products from
power,
government
Congress’s
reached
commerce
“unique
conditions”
attempts
limit the
Congress’s regulation
government
to
indi
cites as warrant
implications.
Opening
far-reaching
Br.
vidual mandate’s
here.
Government’s
See
adroitly
Accordingly,
government
narrowly
regulated activity
re-defines the
Moreover,
government’s
insistence
consump
the uninsured’s health care
findings
Congress’s
to
fact
that we defer
cost-shifting,
tion
attendant
en-
any judicially
the lack of
underscores
timing
payment
and method
for such
stopping point
govern-
forceable
consumption.104
Presum-
“uniqueness” argument.
ment’s
similarly
government’s reluctance to define
a future
would be
ably,
being regulated as the
unique problem requir-
a
the conduct
decision
able
articulate
forego
Af-
compel-
a
fix that
insurance
understandable.
ing
legislative
entailed
all,
to forego pm-chasing
certain
ter
if the
ling
purchase
Americans
decision
private company.
product
activity”
“economic
product
from
deemed
(merely
seeks
set the
because it is inevitable that an
government apparently
in the future will consume in a
limiting principles
terms
courts
market),
to pur-
asks
defer
related
then decisions not
apply,
should
then
that we
*58
subject to
product
about
chase a
would be
the
judgment
whether
Congress’s
met.
and such
sweeping
aggregation,
those
have
The Su-
doctrine
conditions
been
rejected
calls
of all Americans
preme
firmly
no-purchase
has
such
decisions
Court
the
fall
the
judicial
for
abdication in
would
within
federal commerce
Commerce
Consequently,
government
the
Lopez,
power.
See
the mandate will reduce the number of the Findings Congressional G. uninsured cost-shifting billion $43 thereby “lower prem health insurance congressional This us to the brings find 18091(a)(2)(F). §Id. iums.” 18091(a)(l)-(3). ings. See 42 U.S.C. We look to congressional findings help us course, Of “the existence of con legislative judgment “evaluate sufficient, gressional findings is it activity question substantially affected self, to sustain the constitutionality of Lopez, interstate commerce.” 514 U.S. at Morrison, legislation.” Commerce Clause 549, 115 at 1632. S.Ct. 614, 120 Rather, U.S. S.Ct. at 1752.
Here, tracking
language
Supreme
Court has insisted that
decisions,
the congressional findings
congressional
courts examine
findings re
begin with the statement that the individu- garding substantial
Lopez,
effects. See
al
insurance mandate “is commercial and 514
at 557 n.
n. 2
(“
economic in nature” and “substantially
‘[Sjimply
af-
because
may con
fects interstate
commerce.” 42
particular activity
U.S.C.
clude that a
substantial-
parties
105. The
and amici use the shorthand
share
enrollees’ costs for health care and
"cost-shifters,”
"cost-shifting,”
terms
provide
slightly
range
wider
of benefits.”
Cong. Budget
problems.
"free-riders”
describe these
Analysis
Office, An
of Health
Premiums
Insurance
Under
the Patient Protec-
USA,supra
106. See Families
note 8.
(2009).
tion and Affordable
Care Act
*59
Experts
107.
debate whether the Act will ac-
The CBO estimates the Act will cause costs
complish
objective.
premium-lowering
its
for health insurance in the individual market
CBO,
According
even
by
to
the
"Under PPACA
to rise
to
over current
levels in
27%
30%
Act,
and
premiums
the Reconciliation
coverage
for
due to the
broadened
achieved
health
in the
by
insurance
individual market will
the insurance market reforms.
Id. at 6.
higher
however,
they
purpose
somewhat
than
analysis,
would other-
For the
of our
we
mostly
average
wise be ...
congressional
because the
accept
finding
insur-
the
that cost-
policy
larger
ance
higher
market will cover a
lead
premiums.
shifters
to
sought,
health conditions
but
preexisting
commerce does
ly affects interstate
”
Hodel,
denied, coverage and
(quoting
up
make it so.’
were
ended
the
necessarily
(Rehn-
20.1%).110
($8.7 billion,
cost-shifting pool
at
1301
(Souter, J.,
562-68,
dissenting);
at
64
see also id. at
at
S.Ct.
1630-
pez, 514 U.S.
(“
632, 120
at 1762
1 million
34.
S.Ct.
‘Over
women in the United States seek medical
govern-
the
The wholesale deference
year
injuries
assistance each
sustained
have
here cannot be
apply
would
us
ment
”
partners.’
husbands or
[from] their
other
the
Court’s
Supreme
with
deci-
squared
101-545,
(quoting S.Rep. No.
at 37
Here,
Lopez.
sions in Morrison and
“Con-
(“
(1990)));
suggest that
substantially
‘[Estimates
id.
gress’ findings are
weakened
heavily
spend
by
they rely
year
fact that
so
on a we
to
billion a
the
$5
$10
reasoning
care,
[courts]
of
that
have
criminal justice,
method
social
and other
”
if
rejected as unworkable we are
already
(quoting
costs of domestic violence.’
to
the
enumeration
maintain
Constitution’s
(1993))).
103-138,
S.Rep.
at 41
No.
Morrison,
529 U.S. at
of powers.”
Morrison,
Supreme
In
the
also
highly
at 1752. It is
instructive
express
Congress’s
finding
recounted
Morrison Courts re-
Lopez
that the
and
substantially
violence
af-
gender-motivated
cost-shifting theory
jected a similar
now
“ ‘by deterring
fected interstate commerce
In
by
government.
the
exam-
propounded
interstate,
potential
from traveling
victims
relationship
gun
actual
between
ining the
engaging
employment
from
in interstate
commerce, the
possession and interstate
business,
from transacting
and
with busi-
accept
refused to
what
Lopez Court
ness,
in places
involved in interstate
of
government’s
to as
“cost
referred
commerce;
by diminishing
...
national
564, 115
theory. 514
at
S.Ct.
crime”
U.S.
increasing
productivity,
medical and other
despite
govern-
at
It did
so
costs,
decreasing
supply
of and the
the “costs of
argument that
violent
ment’s
”
substantial, and,
through
products.’
at
are
the demand for interstate
Id.
crime
insurance,
those
(majority opinion)
mechanism
costs
at 1752
of
added)
at
spread throughout
population.”
(quoting
Rep.
(emphasis
H.R. Conf.
563-64,
(emphasis add-
Similarly,
Morrison
largely
to the
sidered them
extraneous
of
stockpile118 congres
Court considered
subject
question of
threshold
whether
findings attesting to the link be
sional
regulation
matter
had a sufficient
of
and medical costs
tween domestic violence
at
See, nexus to
See id.
interstate commerce.
frequently
by
parties.
borne
third
629-36,
at
1760-
S.Ct. at 1754.
e.g., 529 U.S.
power to
(referring
"overwhelming
without
evidence that
impedes
and motels
discrimination
hotels
regulate.”).
Wickard,
travel”),
interstate
U.S.
("[A]
would have
they
the text of
were removed from
Morrison,
conditions.”), with
and market
placed
report
statute and
conference
(rejecting
leaps
this case are
less attenuated
regulating
role in
insurance
Lopez
than those in
and Morrison. The
care,
fully recognize
we
has
cost-shifting accompanying the criminal
under
Commerce Clause
of
Lopez
acts
violence at
issue
broadly
fact,
regulate
those
arenas.
hospital
bills borne
third
Morrison —
legislated
has
expansively and
parties, property damage and insurance
constitutionally in the fields of insurance
consequences,
law
expendi-
enforcement
See,
and health care.
e.g., Health Insur-
tures and incarceration costs—is at least
Portability
Accountability
ance
Act
apparent
as
as the
multi-step cost-shifting
(“HIPAA”),
104-191,
scenario associated
medically
with the
Pub.L. No.
Meanwhile,
cases,
(1996);
uninsured.
in all three
Stat. 1936
Consolidated Omnibus
119. The dissent identifies an economic
services,
consumption
ef-
of health care
the lan-
cost-shifting—and essentially
guage
defines
only
the mandate
refers
to insurance
fect—
that as the
activity being regulated.
But the
and contains no reference
care
to health
ser-
activity
vices,
dissent’s conflation of
and effect is
much less how health
care services
wonder,
question begging.
sheer
no
It is
paid
for.
consumed
The dissent can find
then,
breathtaking
that the dissent makes the
leap
no inferential
because it
assumed
has
single
assertion that there
is not even
infer-
case,
away
very problem
in this
effective-
step
regulated
ential
needed to link the
activi-
ly treating
operating
the mandate as
at the
ty
impact
here to an
on commerce. As the
point
consumption.
Under the dissent's
issue,
dissent frames the
is no lack
issue,
there
re-framing of the
the VAWA’scivil-rem-
regulated activity
nexus between the
and its
edy provision
regarded
in Morrison could be
they
effects
interstate
because
commerce
regulating
"consumption
care
of health
are one and the same!
services,”
consumption
because such
inevita-
the extent
bly
empirically
To
gender-moti-
dissent describes the con-
flows from
being regulated
uncompensated
duct
as the
vated violence.
(“CO-
Court’s Commerce Clause
Act of 1985
Reconciliation
Budget
that, in
emphasizes
assess
99-272,
jurisprudence
BRA”),
No.
100 Stat.
Pub.L.
constitutionality
Congress’s
ex
ing the
Income Se-
(1986);
Retirement
Employee
*63
authority, a rele
of its commerce
ercise
(“ERISA”), Pub.L. No.
1974
curity Act of
particular
factor is whether a
federal
vant
(1974);
Security
93^406,
Social
88 Stat. 829
trenches on an area of tradition
regulation
89-97,
1965,
79
No.
of
Pub.L.
Amendments
Morrison,
See
529
al state concern.
U.S.
(establishing Medicare
Stat. 286
613, 615-16,
1750-51,
611,
at
120 S.Ct.
at
Food,
Medicaid);
Drug, and Cos-
Federal
564-68,
1753;
3,
Lopez,
With these
in
we exam
signaled
Ferguson
Congress’s recogni
Act
ine whether
insurance
health care
and
tion
states’
regulat
of the
historical role in
as areas of
qualify
traditional state con
ing insurance within their boundaries—
cern. Prior to the
Court’s 1944
unwillingness
and its
to supplant their vi
Underwriters,
decision in South-Eastern
a
tal function as
source
experimenta
of
enjoyed
virtually
“the States
exclusive
tion. Prudential
Ins.
Benjamin,
Co. v.
industry.”
over
domain
the insurance
St.
408, 429,
1155,
1142,
328 U.S.
66 S.Ct.
90
Fire
Barry,
Paul
& Marine Ins.
v.Co.
438
(1946)
L.Ed.
(“Obviously Congress’
1342
531, 539,
2923, 2928,
98
U.S.
S.Ct.
57
purpose
passing
(1978).
McCarran-Fergu
[in
Thus,
L.Ed.2d 932
South-Eastern
broadly
son
was
to give support
Act]
to
“widely
Underwriters was
perceived as a
existing
and
systems
future state
for
power
regulate
threat
state
to tax and
regulating
taxing
and
of in
the business
industry.”
the insurance
United States
surance.”); see
Fabe,
also Ne.
v.
Dep’t
Treasury
491,
Bancorp,
v.
Inc.
508 U.S.
of
499-500,
2202, 2207,
Bd. Governors
Fed.
472
Sys.,
113 S.Ct.
124
Reserve
L.Ed.2d
of
of
179,
(1993);
159,
2556,
2545,
449
see also
U.S.
Cantor v. Detroit Edi
86
(1985)
Co.,
4,
(O’Connor, J.,
428
112
son
U.S.
608 n.
96
L.Ed.2d
S.Ct.
concur
(“The
(1976)
ring)
3126 n.
Although
gov
states
federal
ual mandate exceeds constitutional bound-
play indispensable
ernment both
roles in aries. The inference is particularly com-
health,
matters of
regulating
modern Su
here,
pelling
where
has
used
preme
precedents have confirmed
Court
economic mandate to compel Americans to
health of a
the view that the
state’s citi purchase and continuously maintain insur-
predominantly
a state-based con
zens
ance from a private company.
of health
regulation
safety
cern: “the
recognize
that,
We
argument
if
primarily,
historically,
matters is
mandates,
matter of
concern.”
states can issue
Hillsborough
local
economic
Con
Labs., Inc.,
Cnty. v. Automated Med.
471 gress
Yes,
should be able to do so as well.
707, 719,
2371, 2378,
105 S.Ct.
85 some states have
general
exercised their
(1985).
L.Ed.2d 714
police power to require their citizens to
similarly
has stated
the narrower cat
buy
products
certain
pertinently,
—most
egory of “health care” is an area of tradi
purposes,
our
health insurance itself.123
See,
tional state
e.g.,
concern.
Rush Pru But if anything,
gives
greater
this
us
con
HMO,
Moran,
dential
Inc. v.
536 U.S.
concern,
Indeed,
stitutional
not less.
if the
2151, 2171,
Morrison]
from
authorized
the CSA.” Id. at
challenge respondents
pursue in the
added).
S.Ct. at 2203 (emphasis
By classi-
Here, respondents
case at hand.
ask us to
fying marijuana as a Schedule I drug, Con-
excise
applications
individual
of a eon-
gress sought
to eliminate all
interstate
cededly
statutory
valid
scheme.
In con-
traffic
the commodity. The Supreme
trast,
Morrison,
Lopez
both
Court concluded that “the diversion of
parties
particular
asserted that a
statute
homegrown marijuana tends to frustrate
provision
fell
Congress’
outside
com-
the federal
interest
eliminating commer-
power
entirety.”
merce
in its
Id. at
cial transactions in the interstate market
But accepting even larger this regu- difficulty concluding had a latory fully scheme doctrine applies in fa- rational basis for believing that failure to *68 cial challenges, government’s the argu- regulate the intrastate manufacture and ment still fails here. To why, see we possession marijuana gap would leave a discuss how Supreme the ing Court utilized hole in the CSA.”127 Although Lopez 126. the aggregate, Court was the first substantially affects interstate com- recognize "larger the regulatory Lopez, merce.” scheme" 514 U.S. at doc- 115 S.Ct. at Here, trine, arguable credulity it would they sug- strain actually ap- whether gest it, plaintiffs' that the sense, conduct plied "arises out of real in that case. Rath- or is connected with a er, commercial transac- Supreme summarily Court stated that tion,” very since the nature of their conduct is 922(q) implicate did not that at all doctrine by marked the absence aof commercial trans- "cannot, therefore, be sustained under action. upholding our regulations cases of activities that arise out of or are connected awith "gaping by 127. The hole” identified the Su- transaction, commercial which viewed in the preme Court sharp by was thrown into relief omitted) not, ipso (citation regulatory scheme does (emphasis broader at 2209 S.Ct. added). regulation the Raich Court render that es- Consequently, facto, somehow regulation was Congress’s It non- to that scheme. would be determined sential plain- that the possibility justified that, announcing its suggest sensical to could frustrate activities tiffs’ intrastate doctrine, regulatory scheme” “larger n congressional validly a enacted impede Congress carte Supreme gave interstate commerce. regulating statute regula- to enact unconstitutional blanche long part tions so as such enactments were case, government contends In this broader, regulatory comprehensive is essential of a that the individual mandate of the insurance regulation do not construe the its broader scheme. We example, government market. For “larger regulatory scheme” doc- Court’s indus- Congress’s insurance submits test, where magic trine as words Con- community- its specifically, try gress’s regulation statement that a is “es- reforms — rating guaranteed-issue reforms—will thereby immunizes its enactment sential” delay purchasing individuals to encourage inquiry. from constitutional Such read- acute until an medical private insurance ing would eviscerate Constitution’s Therefore, government need arises. powers enumeration of and vest mandate that unless the individual argues general police power. with a private into the insur- individuals forces Ultimately, we conclude that the Su- they injured, sick or pool get ance before preme “larger regulatory Court’s scheme” industry reforms will Congress’s insurance put forth doctrine embodies observation private insurance unsustainable be government emphasizes Laughlin in the New Deal case of Jones & companies. congressional findings state that the Corp.: “Although Steel activities mandate “is essential to cre- the individual separately when intrastate character markets in ating effective health insurance considered, they if have such close and products health insurance improved substantial relation to interstate commerce issue and do not ex- guaranteed that are appropri- that their control essential or coverage pre-existing conditions clude protect ate to that commerce burdens from 18091(a)(2)©. can be sold.” U.S.C. obstructions, Congress cannot be de- nied the to exercise that control.” mere first note the truism We (emphasis at 624 particular regulation of a a 301 U.S. placement states, though limiting princi- action cannot cir- plaintiffs’ lack of even "state the Raich Congress' plenary pow- commerce ples. not reach intrastate cumscribe If could easy er.” Id. at 125 S.Ct. at It is marijuana purposes, used for medical plaintiffs' arguments see how Raich it must also be true Court reasoned that Raich completely undermine threatened to marijuana used for recreational that intrastate regulation marijuana of the interstate CSA's regulated purposes could not be either. 545 market, Supremacy not to mention “turn the 2212. And if Con- U.S. at 125 S.Ct. at head.” Id. at 29 n. Clause on its marijuana gress could not reach intrastate at 2213 n. 38. law, by state neither could it reach authorized *69 by marijuana state intrastate unauthorized in marked contrast with the This stands Moreover, Congress us, if could not law. before where neither state law nor case marijuana intrastate when it is author- reach plaintiffs’ uninsured status undermine the law, by Congress's ability to Congress regulation ized state then ability of to enforce its marijuana police market would the man- the interstate interstate commerce. Even without date, statutory provi- wholly contingent integrity about of all other on state decisions maintained, Congress's ability marijuana and to use. sions is whether or not to authorize way jeopardized. effectively mercy the Act is in no Congress be at the enforce would added). concurring opin- any way dependent Scalia’s tion on Justice the individu- al suggests interpreta- a similar mandate. ion Raich There, that “larger tion. he stated The individual mandate does not remove regulatory Lopez scheme” statement Congress’s regulation an obstacle to in permitting to those cases “referred companies. surance An unin individual’s activities regulation of intrastate 'which in way sured status in no interferes with way interfere with or ob- a substantial Congress’s ability regulate insurance ” granted power.’ struct the exercise companies. The uninsured and the indi
Raich, at 2217 545 U.S. S.Ct. prevent vidual mandate also do not insur added) J., (Scalia, concurring) (emphasis companies’ ance regulatory compliance Wrightwood States v. (quoting United best, with the Act’s insurance At reforms. Co., Dairy S.Ct. designed individual mandate is not to (1942)). words, L.Ed. 726 In other enable the execution of regula the Act’s Necessary Proper and Clause enables tions, significant but to counteract the reg Congress in some instances to reach intra- ulatory on companies costs insurance markedly state that activities burden or consequences stemming adverse from the Congress’s ability obstruct in- regulate fully executed reforms. That may be a terstate commerce. consideration, political relevant it but does not convert an regulation unconstitutional Raich, plaintiffs’ In intrastate activi- (of an individual’s forego pur decision to growing marijuana— and consuming ties— chasing expensive product) into a con Congress’s obstructed and burdened total stitutional means ameliorate adverse marijuana traffic, on CSA ban interstate consequences private cost insurance fungible both because the nature of mari- companies engendered by Congress’s juana Congress’s ability po- frustrated regulatory broader reform of their health lice the interstate market because evi- insurance products.128 dence marijuana indicated intrastate is often diverted into the interstate mar- government’s assertion that the in- ket. Yet it is evident that the conduct dividual mandate is “essential” to Con- regulated by the individual mandate —an gress’s broader economic regulation is fur- purchase individual’s not to decision ther components undermined of the Act Raich, insurance and the concomitant absence of itself. Congress devised a commercial transaction —in way no “bur- regulatory system,” “closed id. at dens” or Congress’s ability “obstructs” designed to eliminate all regulation enforce its marijuana Here, of the insurance in- interstate traffic. by con- dustry. Congress’s trast, statutory reforms of Congress itself carved out eight products health insurance guar- exemptions exceptions broad to the —such (and community anteed issue and rating individual mandate penalty) its —do not reference or implementa- make their impair scope functionality. its See 26 government argues has der unreasonable searches and seizures of authority broad to select the means corporate documents to ensure that insurance comprehensive regulatory it enforces its companies discriminating against were not hardly scheme. But this entails applicants preexisting with conditions. Sure- choose and all means whatsoever. ly being this action would not cease a Fourth Indeed, Congress might employed have other merely Amendment violation because it unconstitutional means to render its commu- regulatory deemed essential to a broader nity-rating guaranteed-issue reforms scheme. example, might more "effective.” For or-
13H 5000A(d)-(e). It cannot be denied the individual Even if the indi- U.S.C. intact, unprecedented is an exercise of the “ad- mandate remained mandate vidual power. As the CBO congressional ob- by Con- problem identified selection” verse served, required peo- never Congress “has only respect with persist would gress service as a condi- ple buy good to but also exemptions, broad eight to these in tion of lawful residence the United who healthy persons respect to those with Memo, supra p. States.” CBO penalty. mandate pay to choose Mandate Congress has in- Never before year one pay penalty Those who by compel- sought regulate commerce may get insurance still purchasing stead of ling participants non-market to enter into year next and then decide sick the Congress may regulate commerce so that insurance, they could for which purchase statutory language them. The of the man- not be denied. consump- date is not tied to health care hamstrung Additionally, Congress has past, present, or the future. tion — compliance with own efforts to ensure its Rather, buy the mandate is insurance for toothless en- opting the mandate now and forever. The individual mandate Eschewing the forcement mechanisms. entry. does not for market wait tools, the traditional enforcement IRS’s the Commerce Clause is an Because non- penalties all criminal Act waives power, Supreme enumerated Court’s prevents the IRS from compliance judi- emphasize decisions all need for penalty. or levies to collect the using liens cially enforceable limitations on its exer- Thus, 5000A(g)(2). to the extent The individual mandate embodies no cise. ability delay pur- insurance uninsureds’ limitations, recognized none such least hole” in Con- “gaping chases would leave If by extant Commerce Clause doctrine. efforts to reform the insurance gress’s purchase an an individual’s decision not to market, fit to bore the Congress has seen subject sweep- to the expensive product hole itself. ing aggregation, pur- doctrine of then that always decision will almost substan- J. Conclusion chase interstate commerce. The tially affect reasons, that the these we conclude For government’s five factual elements in the Act individual mandate contained proposed as constitutional “uniqueness,” Congress’s enumerated commerce exceeds principles, are nowhere to be limiting scope. power. This conclusion is limited Rath- Supreme precedent. found in has wielded via hoc, er, they are ad devoid of constitutional for the life of this the Commerce Clause substance, judicial incapable of administra- country remains undiminished. and, consequently, illusory. tion— It may regulate commercial actors. would government’s fact-based criteria activity. may commercial It forbid certain by the expansive lead to involvement federally- of new laws and enact hundreds congressional legislation, requir- courts to do in programs, as it has elected funded judgment over when the ing us to sit Act. But what 975-page this massive enough justify situation is serious Congress cannot do under Commerce economic mandate. mandate that individuals enter Clause is im- limiting principles lack of also with insurance com- This private into contracts overarching two considerations purchase expensive plicates for the of an panies until within the Court’s Commerce they from the time are born product jurisprudence: preserving Clause they the time die. *71 1312 449, withholding spending.” balance and excessive Id. at 118
federal-state
S.Ct.
J.,
at
general police power.
(Kennedy,
concurring).
a
2108
Congress
from
Morrison,
617-19,
problem
act
at
120
at
addressed was momen-
529 U.S.
S.Ct.
1754;
566-68,
plunder
tous: “A nation cannot
Lopez,
at
115
its own
514 U.S.
S.Ct.
treasury
1633-34;
putting
without
its Constitution
Laughlin
Corp.,
at
Jones &
Steel
30,
peril.”
and its survival in
1313
branches,
judiciary
for Americans
owes its ultimate
mandate
an economic
issue
to the
private
from a
com- deference
Constitution.129
insurance
purchase
to
lives
duration of their
for the entire
pany
OF IN-
VI. CONSTITUTIONALITY
limits,
cognizable
lacks
unprecedented,
is
DIVIDUAL MANDATE UNDER
our federalist structure. We
imperils
and
THE TAX POWER
for-
precise
are not
recognize
“[t]hese
mulations,
they
nature of things
and in the
government
The
claims in the al
at
115
Lopez,
cannot
514 U.S.
be.”
a
ternative
the individual mandate is
That an economic mandate
at 1634.
validly
pursuant
Taxing
S.Ct.
tax
enacted
to the
purchase
private
insurance from a
com-
Spending
pro
to
and
Clause. The Clause
expedient
pressing
an
solution to
pany
part
“Congress
is
vides
relevant
shall
Taxes,
not sufficient. As the Su-
public
lay
needs is
have Power To
and collect
Duties,
Excises,
York v.
preme
Imposts
pay
Court counseled
New
States,
provide
Debts and
for the common De
United
general
fence and
Welfare of the United
may appear ‘formalistic’
a
The result
Const,
8,§
States.” U.S.
art.
cl. 1.
given
partisans
case to
the measure
government
taxing
claims that
issue,
are typi-
because such measures
comprehensive
is
power
plenary,
product
perceived
of the era’s
cally the
fact
that the individual mandate also
necessity.
protects
But the Constitution
concededly
regulatory purpose
has
is
best
intentions:
It
us from our own
irrelevant, because “a tax ‘does not cease
power among sovereigns and
divides
merely
regulates,
to be valid
because it
precise-
among
government
branches of
discourages,
definitely
or even
deters the
may
temptation
ly so that we
resist
”
Opening
activities taxed.’ Government’s
concentrate
one location as
(quoting
Br. at 50
United States v. San
to the
expedient
solution
crisis
chez,
42, 44,
108, 110,
340 U.S.
95
day.
(1950)).
government
L.Ed. 47
claims
187, 112
Al-
long
“productive
505
S.Ct.
that as
as a statute
revenue,”
it un
though
give
courts must
due consideration
some
enact
policy
political
taxing power.
(quoting
choices of the
der its
Sonzin-
why
principles
of federalism
a Neces-
129. We are at a loss as
the dissent
how
inform
spends
portion
opinion
sary
Proper
analysis.
a considerable
of its
Clause
See Private
on the Fifth and Tenth Amendments. As
Br. at 46.
Plaintiffs'
earlier, the
Accordingly,
mentioned
district court dismissed
we
a free
cannot consider
plaintiffs'
See,
Fifth Amendment claim. Flori-
standing
e.g.,
Tenth
claim.
Amendment
HHS,
F.Supp.2d
da v.
716
at 1161-62. That
Fayette Cnty.,
Grp.,
Adver.
L.L.C.v.
451
Tanner
ruling
appeal.
is not on
(11th Cir.2006) ('"The law
F.3d
legal
now well settled in this Circuit that a
Furthermore,
plaintiffs'
appeal
briefs on
argument
not been briefed
claim
has
free-standing
raise no
Tenth Amendment
and its
before the court is deemed abandoned
Although
the individual
claim as to
mandate.
” (quoting Ac
merits will not be addressed.'
single pass-
plaintiffs'
makes a
the state
brief
Now,
Co.,
F.3d
cess
Inc. v. Sw. Airlines
ing
in the
reference to the Tenth Amendment
(11th Cir.2004)) (brackets
introduction,
omit
Opening
see States’
Br. at
ted));
Jernigan,
United States v.
341 F.3d
fact remains that the Tenth Amendment is not
(11th Cir.2003) (finding issue
1283 n. 8
argued
plaintiffs’
once cited or
in the state
waived, despite
passing references” in
''four
discussion. See States’
individual mandate
brief,
party seeking
Appellant's
because "a
Opening
private plaintiffs'
Br. at 19-47. The
appeal
plainly
a claim or issue
must
single passing
reference to
raise
brief also makes
Amendment,
indicate”).
only
prominently so
the Tenth
but
in relation to
States,
506, 514,
HHS,
sky
Goudy-Bachman
v.
v.
764 F.Supp.2d
United
(1937)).
554, 556,
(M.D.Pa.2011) (“The
Fur-
81 L.Ed.
court finds
thermore,
government
contends our
that the individual mandate itself
is not
*73
“the constitution-
review is limited because
tax....”);
Holder,
Mead v.
F.Supp.2d
766
taxing are
al restraints on
few”
(D.D.C.2011) (“[T]he
“[t]he 16, 41
Court con-
remedy
taxation
in the
for excessive
is
cludes that
did not intend [the
Congress,
hands of
not the courts.” Unit-
operate
tax,
individual
mandate]
as a
22, 28,
Kahriger,
73
ed States v.
345 U.S.
and therefore Defendants cannot rely on
510, 513,
(1953),
any month
Thus, the
of the individual
text
5000A(a) requires
applica-
“[a]n
U.S.C.
provides that
unambiguously
mandate
that the individ-
to “ensure
ble individual”
penalty
encour
imposes
penalty.
minimum
under
essen-
*74
ual ...
is covered
require
the Act’s
ages compliance with
5000A(a).
§
coverage.” 26 U.S.C.
tial
“minimum
cover
ment to obtain
essential
Con-
requirement,
enforce this
order to
monetary
a
sanction on
age” by imposing
is an
taxpayer
that
a
who
“[i]f
stated
gress
requirement.
that
conduct
violates
...
fails to meet the
applicable
carefully
and was
The text is not unclear
(a)
for
or
requirement of subsection
specific meaning.
to denote a
As
selected
months,
hereby
...
there is
then
more
recently recog
most
a
with
taxpayer
penalty
on the
imposed
Reorganized
nized in
States v.
United
CF
failures.”
such
respect
Utah, Inc.,
I
& Fabricators
of
added).
5000A(b)(l) (emphasis
§
116 S.Ct.
ment
is essential
markets that do not re-
“America’s Affordable Choices Act of
health insurance
2009,”
(2009),
Cong.
and eliminate its as-
H.R.
111th
quire underwriting
costs.”).
which was introduced in the
of Rep-
sociated administrative
House
14, 2009,
July
resentatives on
provided
need not
argument
hereby imposed
that “there is
a tax” on
expressly
of “tax” or
in-
employ
label
“any individual who does not meet
Taxing
Spending
voke the
Clause
requirements
of [maintaining minimum
true,
surely
a valid tax is
order to enact
health insurance coverage]
time
v.
goes.
Cloyd
insofar as
See Woods
W.
year.” A
during the taxable
later version
Co.,
138, 144,
Miller
bill,
of the House
the “Affordable Health
(1948) (“[T]he
424,
Mandate (emphasis (quotation marks omit ted). if although Even the text were unclear — government is not—and we were to resort to an The relies on different legislative history, pieces legislative history, particular-
examination of the we thing: ly legislators, would still find more of the same of individual statements Act, impose penalty speaking against intended to both for and who the failure to maintain health insurance. at times referred to the individual various (1941)). That the individual L.Ed. 888 a “tax.” See Government’s as
mandate revenue and produce mandate will some (citing Cong. Rec. Br. at 54 Opening 2010) 21, by the Internal Revenue will be enforced H1854, (daily ed. Mar. H1882 Miller); enough, they say, to transmute (statement Cong. Rec. Service Rep. of 2010) penalty provision the individual mandate’s (daily ed. Mar. H1824, H1826 tax. (statement Cong. into a Rep. Slaughter); 155 of S13,753 (daily S13,751, ed. Dee. Rec. unpersuaded. Even on the remain We
2009) (statement
Leahy);
Sen.
terms,
own
the individual
government’s
S13,581-82
S13,558,
(daily ed.
Cong. Rec.
operation”
in “practical
mandate does not
2009) (statement
Baucus);
of Sen.
Dec.
Nelson,
act
a tax. See
312 U.S.
S12,768
Dec.
(daily ed.
Cong.
Rec.
government specifi
2009)
(statement
Grassley)).
of Sen.
mandate
cally claims
statements of individual
These assorted
character of a tax because it will
has the
value,
precious
little
be
legislators are
produce
argument
revenue. This
—which
plain
they are in conflict with
cause
undisputed projections by the
relies on
the statute and with more reliable
text of
gen
that the individual mandate will
CBO
intent. See
congressional
indicators of
four to five billion dollars in
erate some
Ga.,
Cnty.,
516 F.3d
v. DeKalb
by
annual revenue
the end of this dec
Huff
Cir.2008) (“
(11th
‘The best evidence
ade 131—does little to address the distinc
purpose
statutory
is the
text
[legislative]
penalty
tion between a
and a tax. This is
adopted
both Houses
fines,
penalties,
because
civil
“[c]riminal
submitted to the President. Where
forfeitures,
taxes all
certain
civil
share
unambiguous—
that is
phrase
contains
They generate government
features:
reve
clearly
accepted meaning
that has a
individuals,
nues, impose fiscal burdens on
judicial
legislative
practice'
both
Kurth
and deter
certain behavior.”
—we
con
permit
expanded
do not
it to be
Ranch,
at 1945.
leg
tracted
the statements of individual
recognized,
Court has thus
during
islators or committees
the course
must,
we
that in our world of
as indeed
*77
” (alteration in
process.’
the enactment
perfect compliance, penalties
less than
original) (quoting
Hosps.,
W. Va. Univ.
just
surely
generate revenue
as
as taxes.
98-99,
Casey,
Inc. v.
499 U.S.
111 S.Ct.
reve-
projected
Nor does the amount of
(1991))).
1138, 1147,
1319 sanction on individual who “fails to type of firearms.” 300 certain noxious 511-12, at 554-55. The requirement” at 57 S.Ct. meet the to maintain “mini revenue,” but of some “productive tax was coverage.” mum essential 26 U.S.C. 5000A(b)(l). at & n. 57 S.Ct. at not much. 514 it, As we see such an exac (observing paid that 27 dealers & n. 1 556 appears every important respect tion 1935). 22 That paid tax in “punishment for an unlawful act or up- Court from stop did not omission,” very “concept which defines the a tax. The Su- holding provision as Fabricators, I penalty.” CF & 518 U.S. interpreted Sonzinsky later preme Court 224, 116 2113; Virginia at S.Ct. at see also proposition that “a tax standing as Sebelius, (“The F.Supp.2d v. at 786 merely because does not cease to be valid only generated revenue under the [individ definitely or regulates, discourages, even ual is incidental to a mandate] citizen’s taxed,” prop- the activities deters obey by requiring failure to the law “applies though even the revenue osition coverage. minimum level of insurance obviously negligible.” San- obtained is resulting any revenue is tax ‘extraneous ” (em- chez, at at 110 340 U.S. S.Ct. (quoting Kahriger, at need.’ added). phasis 515)). at views these cases government While the government suggests also argument, because supportive of its individual mandate a tax operates as be- they demonstrate the breadth Con- cause it is housed in the Internal Revenue merely taxing power, the cases gress’s through taxpayers’ and is collected Code Congress “that an Act of which on its hold annual It that the returns. is true individ- purports to be an exercise face ual mandate is located under the section of any is not the less so because taxing power the Code titled “Miscellaneous Excise Tax- or to restrict the tax is burdensome tends es.” Yet the Code itself makes clear that Sonzinsky, suppress thing or taxed.” Congress’s place pro- choice of where to (emphasis U.S. at vision the Internal Revenue Code has no added). Thus, express- has once inference, implica- value: “No interpretive that a ly unmistakably provi- indicated tion, presumption legislative or con- tax, “[i]nquir[e] courts will not sion is struction shall be drawn or made rea- move into the hidden motives grouping son of the location or exercise constitution- particular provision portion section or 513-14, ally upon conferred it.” Id. at 7806(b); see this title....” U.S.C. But that is not this case. HHS, F.Supp.2d also Florida v. Here we confront a statute that is not “on *78 same). (citing 1137 tax, penalty. a its face” a but rather more, correctly court What’s the district significantly, every provision not More government any noted that the lacks case a in the Internal Revenue Code is tax. point. on Florida v. precedent squarely Indeed, Congress placed Chapter 68 of HHS, at 1140. F.Supp.2d 716 a panoply the Internal Revenue Code of penalties, running gamut from civil deliberate ignoring Congress’s
Even tax broadly applicable (filing frivolous re the individual “penalty,” choice of the term 132 errone imposes monetary making face a turns or unreasonable mandate on its 6702(a) (imposing “pen- § either lacks "information on this title” which 132. See 26 U.S.C. $5,000” correctness of the self- alty person on who files “what substantial of may judged” in- imposed by or “contains purports to be a return of a tax assessment 1320 credit133) both, years, together or or claims for a tax refund with the costs
ous (tampering with or highly industry-specific prosecution”). pen- the entire list of While security requirements failing to maintain alties in Internal far Revenue Code is injection systems,134 dye or here, for mechanical long too to exhaust apparent reselling adulterated diesel fuel selling or placement the individual man- standards135). that violates environmental date in the Internal Revenue far Code is addition, penalty is not In the mandate’s from sufficient to convert the individual because, above, a tax as noted treated like value, a “tax” mandate into and has limited liens, levy place not or or the IRS all, any if in determining whether the any prosecution impose initiate criminal or individual mandate is a tax a penalty. or All or criminal sanctions. interest statute, After careful review of the we IRS, speaking, may do is to practically conclude that the individual mandate is penalty against a tax refund. offset regulatory penalty civil and not a tax. As § 5000A(g)(2)(A)-(B). U.S.C. regulatory penalty, the individual man- Although pur- it is irrelevant for our justification date must therefore find in a in the Internal poses precisely where Rev- power. different enumerated See Sun- place enue Code decided to Adkins, shine Anthracite v. Coal Co. mandate, 7806(b), § id. we ob- 381, 393, 907, 912, 84 L.Ed. chapters serve other of the Internal (1940) (“Congress may impose penal- penalty provisions Revenue Code include ties aid of the exercise of of its 5761(a) See, § e.g., (imposing as well. id. powers.”); Virginia enumerated v. Sebeli- $1,000” penalty any person pri- “a — us, 788; HHS, F.Supp.2d at Florida v. manufacturers, marily importers, and re- F.Supp.2d at 1143-44. willfully comply tailers —who fails to with a The individual mandate as written can- variety statutory and taxes under duties supported by power. not be the tax Chapter 52 of the Internal Revenue Code products related to and ciga- tobacco VII. SEVERABILITY rettes). And 75 of Chapter the Internal We now turn to whether the individual Revenue penal- Code sets forth criminal mandate, 5000A, § found in 26 U.S.C. can ties, which permit impose courts to sub- be severed from the remainder of the 975- § stantial fines. (providing page Act. variety those who commit tax fraud in a and,
ways guilty felony “shall be of a upon Governing A. Principles thereof, conviction shall be fined more $100,000 ($500,000 than analyzing the case of a this question, we corporation), imprisoned not more than premise start with the settled that sever- 6715A(a)(l) ("If any per- formation that on its face indicates that the 134. See 26 U.S.C. incorrect”). substantially tampers dye injection self-assessment is son with a mechanical system indelibly dye used to fuel ... such 6676(a) ("If person pay penalty shall in addition to the 133.See 26 U.S.C. a claim for *79 (if any).”). penalty greater tax is the respect of refund or credit with to income tax $25,000 amount, gallon $10 or for each of fuel in- ... is made for an excessive unless it 6715A(b)(l). volved. Id. is shown that the claim for such excessive basis, person amount has reasonable making penal- (imposing "penal- such be liable for a claim shall 135. See 26 U.S.C. 6720A $10,000” violation, ty equal percent ty in an amount to 20 of the of for each "in addition amount.”). [fuel]”). excessive to the tax on such
1321
Indeed,
fundamentally
respect
rooted in a
the Commerce Clause con-
ability is
text,
of
powers
Supreme
and notions
Court struck down an
separation
for
Ayotte
important provision
v. Planned
of a statute and left
judicial restraint. See
320,
the remainder of the
Eng.,
N. New
546 U.S.
statute intact.
Parenthood of
Morrison,
967-68,
329-30,
961,
only
163 L.Ed.2d
Court invalidated
one
126 S.Ct.
(2006).
provision
provision
must “strive to sal-
civil remedies
Courts
812
—the
gender-based
victims of
by severing any
violence. Morri-
vage”
acts of
son,
605, 627,
1747,
S.Ct. at 2434
take-title
invalidating
“refrain from
more of the stat
severable from Low-Level Radioactive
than
necessary.” Regan,
ute
non-severability clause can be “elusive” 932, early that an of Congress’s 103 S.Ct. at sized version enterprise. 462 U.S. severability health reform bill did contain a Congress’s
clause. failure to include such bill, in the final clause the district court B. Invalidation Wholesale reasoned, strong “can be viewed as evi- principles, these we con Applying Congress recognized dence that the Act that the district court erred its clude operate could not as intended without the the entire Act. Ex HHS, to invalidate decision individual mandate.” Florida v. 780 mandate from the Act cising 1301, 285683, the individual F.Supp.2d at 2011 WL remaining provisions prevent does not pushes *36. The district court this infer- being “fully operative as a law.” As from ence too far. myriad our exhaustive review of the Act’s First, legis- both the Senate and House demonstrates, provisions Appendix A that, drafting light lative manuals state nothing of the Act has the lion’s share Supreme precedent Court in favor of insurance, much private do with less severability, severability clauses are un- buy insurance. mandate individuals necessary they unless specifically state wholly provisions unrelated
While such portions that all or some of a statute repeating, represen too numerous to bear Leg- should not be severed. See Office of examples provisions tative include estab Counsel, Senate, islative Legislative U.S. lishing nursing break time for reasonable Manual, (Feb.1997) § Drafting 131 (pro- mothers, 207(r); § epidemiolo 29 U.S.C. “a viding severability clause is unnec- grants, 42 gy-laboratory capacity U.S.C. essary” distinguishing but a “nonsevera- 300hh~31; study § HHS urban clause,” bility “provides if a Medicare-dependent hospitals, id. specific portion of an Act is declared inval- note; § funding 1395ww restoration of id, the whole Act or portion some education, 710; § abstinence id. and an invalid”); Act shall Legisla- Office of salons, tax tanning excise on indoor 26 Counsel, Representa- tive U.S. House of § 5000B. U.S.C. tives, Legislative House Counsel’s Manu- (Nov.1995) al on Drafting Style, Act, In invalidating the entire the dis (stating severability that “a un- clause is placed emphasis trict court undue on the necessary provides unless it in detail severability Act’s lack of a clause. See fall, provisions which related are to HHS, Florida ex rel. Bondi v. No. 3:10- fall, specified key which are not to if a CV-91-RV/EMT, 1256, F.Supp.2d invalid”). provision is held 1300-02, 285683, WL *35-36 (N.D.Fla. 2011). Second, Jan. present early the clause in one precedent confirms that the general “ultimate de version of the Act was a severabili- severability rarely clause, termination of will turn ty non-severability not a clause. presence 111-299, on the Rep. pt. absence of such a See H.R. No at 17 Jackson, (2009), clause.” v. reprinted United States (“If 585 n. any provision 1218 n. U.S.C.C.A.N. (1968). Rather, unconstitutional, 20 L.Ed.2d 138 “Con this Act ... is held to be gress’ just silence is Act provisions that —silence—and the remainder of the of this affected.”). Thus, presumption against does raise a ... sev shall not be accord- Airlines, erability.” manuals, ing Congress’s drafting Alaska 480 U.S. at own 686, 107 severability unnecessary, S.Ct. at 1481. clause was *81 18091(a)(2)(I). § findings Id. The in that should not be read and its removal sev- legislative against paragraph intent add that if indicator of there were no man Rather, date, the removal of the sev- erability. “many pur individuals would wait to clause, short, probative has no erability until they chase health insurance needed severability question on the before impact care.”138 Id.
us. earlier, a significant As discussed num- nature of light of the stand-alone preexisting ber the uninsured with con- provisions and their hundreds of the Act’s voluntarily buy ditions tried to insurance to the individu- manifest lack of connection coverage but were denied or had those mandate, have not met the plaintiffs al excluded, resulting conditions uncom- pre- to heavy burden needed rebut pensated consumption health care sumption severability. We therefore cost-shifting. Congress also found that in- that the district court erred in its conclude surers’ billion in underwriting costs in $90 of the Act. wholesale invalidation identifying unhealthy represented entrants 26% to 30% of premium costs. Mandate Severability C. Individual 18091(a)(2)(J). § The two reforms reduce Two Insurance from Reforms the number of the uninsured and under- severability inquiry is not so sum writing costs guaranteeing issue and answered, however, marily with respect prohibiting preexisting condition exclu- private industry two of the insurance ref consumers, sions. To benefit guaran are: orms.137 The two reforms improved has products health insurance (effective issue, 300gg-l teed U.S.C. required insurers to cover consumers 2014); prohibition Jan. and the who need their products the most. exclusions, preexisting condition id. § 300gg-3. It is not government uncommon that regulations beneficial impose to consumers pause severability
Our
over the
of these
industry
additional costs on the
regulated.
reforms
due to the fact that
two
These
obviously
signifi-
two reforms
have
broad,
findings
gen
congressional
speak
negative
cant
effects on the
states,
business costs
except
place
terms
in one
eral
they
earlier,
require
of insurers because
insurers
man
as noted
that the individual
unhealthy entrants,
accept
raising
insur-
creating effective
date “is essential
mandate,
ers’ costs. The
health
markets
in which im
insurance
part,
mitigate
seeks to
proved
products
health insurance
that are
the reforms’ costs
guaranteed
by requiring
healthy
issue and do not exclude cover
on insurers
age
pre-existing
buy
pay premiums
conditions can be sold.”
insurance and
to insur-
discussion,
coverage,
requirement,
we
137. For ease of
refer to those
insurance
to-
provisions collectively
Act,
two
as the “two re-
gether
provisions
with the other
of this
forms.”
will
this adverse selection and
minimize
pool
broaden the health insurance risk
18091(a)(2)(f) provides,
138. Section
in its en-
individuals,
healthy
include
which will low-
tirety:
premiums.
er health
re-
insurance
Under sections 2704 and 2705 of
Public
quirement
creating
is essential to
effective
(as
Act
added
Health Service
section
health insurance markets
in which im-
Act)
in 42 U.S.C.
[to
1201 of this
be codified
proved
products
health insurance
that are
300gg-3, 300gg-4],
§§
if there were no re-
guaranteed issue and do not exclude cover-
quirement, many
would wait to
individuals
age
pre-existing
conditions can be sold.
purchase
they
until
need-
health insurance
18091(a)(2)(I).
42 U.S.C.
By significantly increasing
ed care.
*82
1324
(2005)
(stating
in
ers
subsidize
3742(e)
Further,
§
if there
unhealthy.
“contains critical
ering the
18 U.S.C.
mandate,
(now-excised)
argument goes,
were no
cross-references
to the
they
until
can wait
sick
healthy people
3553(b)(1)
consequently
§
must be
insurance,
they
knowing
could
to obtain
reasons”);
excised for
severed and
similar
away.139
not then be turned
Airlines,
688-89,
Alaska
At we note that provisions ruled inseverable because it easily have included in the Act a could in require engage quasi- would courts non-severability stating clause that the in- legislative preserve functions order to should not severed dividual mandate See, provisions. e.g., Randall v. Sor legisla- from the two reforms. Under the rell, 230, 262, 548 U.S. manuals, the one drafting tive instance (2006) 2500, 165 L.Ed.2d (declining severability important which a clause is campaign sever Vermont’s finance contri provides where “it detail which related fall, doing bution limits because so provisions are to and which are not to “would re fall, specified key provision quire if a is held to write words into the [the Court] Counsel, statute”); Fund, Legislative invalid.” Office see also Free Enter. Representatives, at -, U.S. House House (cautioning U.S. Legislative Drafting Counsel’s Manual on against courts “blue-peneil[ing]”). 328; § Style, Legislative accord Office of remedial question “[T]he we must ask” Counsel, Senate, Legislative Drafting closely is “which alternative adheres more
Manual, §
did not include
Congress’
objective”
original
passing
any
non-severability
such
clause in the
the Act:
the Act without the individual
Act, however.
intact;
mandate but otherwise
or
It is
telling
also
none of the insur- Act without the individual mandate and
reforms,
including
ance
guaranteed
even
also without these two insurance reforms.
coverage
issue and
of preexisting condi-
Booker,
See
reduc[e]
pendent
mandate,
of the individual
that
Undoubtedly,
the two reforms seek to
also
to
serve
reduce the number of the
All
objectives.
things
achieve those
other
by encouraging
uninsured
or facilitating
then, a
being equal,
version of the Act that
persons (including
healthy)
purchase
the
to
contains
reforms
hew
these two
would
(1)
coverage.
insurance
These include:
Congress’s
closely
likely
more
to
intent
reforms;
the extensive health insurance
than one that lacks them.
(2)
(3)
Exchanges;
the new
premi-
federal
mandate,
But without the individual
not
(4)
credits,
36B;
um
§
tax
26 U.S.C.
feder-
things
equal.
all
We must therefore
subsidies,
cost-sharing
al
42 U.S.C.
look to the consequences of the individual
(5)
18071;
§
requirement
the
that Ex-
mandate’s absence
the two reforms.
changes establish an Internet website to
Booker,
See
543
at
at
U.S.
125 S.Ct.
provide consumers with information on in-
765
of one
(considering whether excision
18031(d)(4)(D);
§
plans,
surers’
id.
the
“pose
prob
of statute would
a critical
part
requirement
that employers offer insur-
lem”);
653, 104
Regan,
U.S. at
at
468
S.Ct.
§
ance
pay penalty,
4980H;
26 U.S.C.
policies
“the
Con
(asking
3269
whether
requirement
the
that certain large
504
gress sought
enacting
to advance
employers automatically enroll new and
pur
can
even though
be effectuated
the
employees
current
in an employer-spon-
unenforceable”).
In
pose requirement
sored plan
opts out,
unless the employee
so,
doing
large.
several factors loom
218A,
just
29 U.S.C.
to name a few.
First,
provi-
many
the Act retains
other
Second, the
mandate
has a
accomplish
that
help
sions
to
some
comparatively
operation
limited
of
field
objectives
same
as
individual mandate.
vis-a-vis
number of the uninsured.
Booker,
at
at
See
543 U.S.
Airlines,
Supreme
Alaska
Court
(“The
found
excision,
system remaining
767
after
legislative
that
the unconstitutional
veto
lacking
mandatory
that
while
features
provision of
Deregulation
the Airline
Act
Congress enacted, retains other features
(permitting Congress to veto the Labor
help
objectives.”);
that
to further
these
regulations)
Secretary’s implementing
States,
York
was
New
v. United
505
at
because,
(“Common
among
things,
severable
other
S.Ct. at
sense
suggests
statute left “little of
Congress
that
substance
be sub
where
has enacted
ject
a veto.”
statutory
for an
480 U.S. at
purpose,
scheme
obvious
S.Ct.
Supreme
and where
has
at 1481. The
noted
Congress
included a series
Court
provisions operating
“ancillary
Secretary’s
of
nature” of the Labor
incentives
that purpose,
obligations
achieve
the invalidation of
and the “limited substantive
ordinarily
one
the incentives should not
Secretary.140
discretion” afforded the
bility
vetoing any
140. The
stated:
of these actions and
Congress
infer
one can
would have
subsidiary
With this
role
Sec-
allotted to the
duty-to-hire provi-
retaiy,
been satisfied with the
provision
only
the veto
could affect
insignificant
might
preserving
opportu-
even
relatively
sions
without
actions he
nity
duty-to-hire
regulations.
take in
veto the DOL’s
connection with the
Airlines,
program.
to be-
There is thus little reason
Alaska
Further, exceeds the individual mandate part in and re- power Accordingly, we affirm enumerated commerce Congress’s judgment of the part in the district economic verse This and is unconstitutional. court. wholly a novel and represents mandate of con unbounded assertion
potentially part in and REVERSED AFFIRMED authority: ability compel to gressional part. in expensive purchase to
Americans
MARCUS,
concurring
Judge,
Circuit
they have
not to
product
elected
insurance
dissenting
part1:
part and
re-purchase that
to make them
buy, and
as
every
Today
for their
Court strikes down
uncon-
product
month
this
insurance
piece
comprehen-
a central
of a
any gen
stitutional
have not found
lives. We
entire
challenges
this
says
despite
massive
dissenting colleague
significant
respected
145. Our
(1)
regulation
spend-
ignored
federal
and
majority:
sweeping
“has
the broad
and
(2)
ignored
prerogative
and
of
Congress”;
ing,
"has
the ambit
power
falls within
reading
power, except
expansive
Congress’s
of the
commerce
Supreme Court’s
broad
however,
Clause”;
section,
do,
(3) "presume[s]
to sit as
We
5000A.
for one
Commerce
(4)
duty
"misapprehends the
superlegislature”;
our constitutional
a
refuse to abdicate
court”;
(5) ignores
reviewing
Congress
beyond its enumer-
of a
has acted
role
when
officers,
mandating
judicial
power
we are
Clause
"as nonelected
ated Commerce
Americans,
grave, pur-
opportunity
to rewrite stat-
cradle to
not afforded
from
Dissenting Op.
private
product
don’t like.” See
from
we
chase an insurance
utes
respond
We
to these
company.
do
contentions,
(1)
especially given
our extensive
(Med-
Act,
(standing),
only in
I
III
I
Parts
exceedingly
of the
concur
careful review
(taxing power) of the
expansion), and VI
parties’
icaid
Supreme
precedent, and the
Act,
opinion.
majority
holding that the
arguments, and
our
regulatory scheme enacted from the
sive economic
course
business.”
& Co.
Swift
majority
States,
concludes that
by Congress.
The
v. United
196 U.S.
(1905).
does not have the commerce
276, 49
L.Ed. 518
require
uninsured Americans to
power
approach
by
The
taken
the majority has
pay
obtain health insurance or otherwise
disregarded
powerful
also
admonitions
penalty.
majority
financial
does so
that acts of Congress are to be examined
though the
mandate was
even
heavy
presumption
with
of constitutional-
designed
regulate quintes-
and intended to
ity, that
the task at hand
ap-
must be
sentially economic conduct
in order
caution, restraint,
with
proached
great
large,
problems:
ameliorate two
national
humility,
and that we
not lightly con-
first,
shifting
the substantial cost
that oc-
clude
an act of
exceeds its
curs when uninsured individuals consume
powers.
enumerated
The circumspection
virtually
health care services—as
all of
this
requires
task
by recog-
underscored
will,
many
year
them
do each —for
nizing, in the words of
Kennedy,
Justice
and, second,
they
pay;
cannot
long
“history
judi-
difficult
unavailability of health insurance for those
struggle
cial
interpret
the Commerce
who need it most—those with pre-existing
during
Clause
the transition from the eco-
lengthy
conditions and
medical histories.
system
nomic
the Founders knew to the
process
striking
In the
down the man-
single, national market
emergent
still
date,
majority
ignored many years
has
our own era.” United States v. Lopez, 514
developed
Commerce Clause doctrine
549, 568,
131 L.Ed.2d
ignored
Court.
It has
J.,
(Kennedy,
concurring).
power Congress,
broad
in the words of
Marshall,
prescribe
Chief Justice
“to
plaintiffs and, indeed,
majority
rule
which commerce is to be gov-
conceded,
must,
have
they
that Con-
(9
Ogden,
erned.” Gibbons v.
gress
has the commerce
impose
Wheat.) 1, 196,
(1824).
by the which most of our health national care for; Congress paid private determined that costs are government approxi- to the im- insurance mandate was essential effective financed mately insurer plementation regula- spending. the Act’s 75% of health care Gov’t is, (citing non-disputed “to Br. at from creating tions—that effective health data improved insurance markets in which for Medicare and Medicaid Ser- Centers (“CMS”)). Moreover, products guaran- insurance vices ex- health coverage pressly partic- and do not exclude connected the increased teed issue ipation can be in the health market pre-existing conditions sold.” insurance 18091(a)(2)(I). it expected further found to result from the individual waiting actually supply of, uninsured “increasing until the mandate with for, regu- health health consume care services before demand care services.” 18091(a)(2)(C). effectively day them would be a late a more lating U.S.C. On basic (“[I]f level, Congress and a dollar short. See id. there also understood that mandate], many bought were no indi- insurance is for [individual “[h]ealth not its sake; bought would in- own purchase pay viduals wait to health for medical care.”); they until Br. Liberty expenses.” (citing surance needed Gov’t at 39 M. Univ., Geithner, al., F.Supp.2d Inc. v. Moshe Porat et Insurance Ver- Market (W.D.Va.2010)(“As Congress stat- sus 634-35 Insurance: The Tax-Differential Self Cost, findings, coverage ed its the individual Treatment and Its Social 58 J. Risk (1991); larger provision regu- is ‘essential’ to & Ins. S. Feld- th[e] Martin it, stein, latory scheme Loss Excess because without individu- Health Welfare Insurance, postpone in- Pol. [acquiring] als would 81 J. Econ. (“Health care, until they surance substantial Welfare insur- [hereinafter Loss] need consump- point obligate the Act ance is a final purchased would insur- for good paying ers to cover them at the same cost as tion but as means of everyone purchases else. future health ser- This would increase the stochastic vices.”)); of health also Brief Econ. Scholars cost insurance and decrease the see
1333 Supporting Congress long Amici the merce that regulated Curiae Govern- has Br.”) (“Medical (“Gov’t First, ment at 12 heavily. Econ. and regulated parties (as must) care is the set of services that make one agree they all Congress’ that healthier, in prevent or deterioration power lawfully commerce extends to the insurance is a health. Health mechanism regulation general, insurance in as the costs of spreading that medical Supreme Court more than concluded 60 time, care or over from a people across in years ago United States v. South-East
period when cost would be overwhelm- Ass’n, ern Underwriters 322 U.S. ing periods to costs are man- when more 552-53, 64 S.Ct. L.Ed. 88 1440 ageable.”). (1944). Indeed, Congress expressly relied enacting in proposition this the individ 18091(a)(3) ual 42 mandate. See U.S.C.
B. (citing South-Eastern Underwriters as a 1. Congress’ authority basis for to regulate Clause).4 insurance under the Commerce Congress’ power regulate commerce is, as Marshall us taught Chief Justice Second, in light of Congress’ undeniable years ago, power almost two hundred power under the reg- Clause to Commerce prescribe “to rule which commerce ulate the generally, business insurance all governed. power, is to be This like again dispute— follows—and there is no Congress, in complete others vested in Congress may regulate that also health itself, may be exercised its utmost ex- is, in particular, all, insurance after which tent, limitations, acknowledges no oth- subset market. insurance See er than prescribed the constitution.” Fried, Testimony Charles Written Before Gibbons, 22 precisely It is U.S. Judiciary the Senate Hearing Committee power prescribe governing this rules on “The Constitutionality of Affordable commerce that exer- lawfully (Feb. 2011), Care Act” available at enacting cised individual mandate. http://judiciary.senate.gov/pdf/ll-02-02 fact, In %20Fried%20Testimony.pdf. Con- Congress’ rule-making
It is clear that power gress extensively both the has its com- extends to health insurance exercised markets, and health regulate care areas of com- merce insur- Underwriters, response applied to South-Eastern Commerce insur- Clause — McCarran-Ferguson enacted precluded by it is ers because McCar- Act, provides regulating that state laws Act); ran-Ferguson id. at "invalidate[d], insurance will not be im- ("We reject any suggestion Congress in- law, pair[ed], supersede!)!]” by federal un- regula- cede the tended to field of insurance "specifically less the federal law relates to the Rather, States....”). tion to the the McCar- 1012(b). business of insurance.” 15 U.S.C. ran-Ferguson sought protect Act state "to way But this enactment in no or di- affects regulation primarily against feder- inadvertent holding minishes the Court’s clear in South- say, through al of a enactment fed- intrusion — Congress may, Eastern con- Underwriters activity eral statute describes affected states, currently regulate with the the busi- broad, terms, general of which the insur- ness of insurance under the Commerce happens ance business to constitute one more, Congress hardly Clause. What’s has part.” Cnty., Barnett Bank N.A. v. Marion regulating abdicated its role insurance Nelson, 25, 39, Forsyth, business. See Humana Inc. v. (1996). L.Ed.2d 237 299, 311, (holding L.Ed.2d federal grounded RICO in the statute —which itself *91 1334 em- provisions that allow coverage” tion many years, long before market for
anee receiving employer- continue passed. example, ployees For Con- Act was period for a Employee sponsored Retirement health insurance gress enacted the (“ERISA”), of 1974 Security employment Act the end of their following Income (1974), 93-406, 829 No. 88 Stat. gaps Pub.L. health insurance prevent order to legislation reg- piece 1161, is a §§ which massive And coverage. 29 U.S.C. employee benefit ulating operation Portability and in the Health Insurance plans, pension retirement plans, including (“HIPAA”), Act of Accountability 1996 health in- employer-provided and plans, (1996), 104-191, 110 Pub.L. No. Stat.1936 expressly plans. surance the Public Health Ser- amended scope of ERISA’s cover- the broad pegged provi- insurance portability vice Act to add power. Clause 29 age to its Commerce group plans— prohibit sions that health (“It 1001(b) hereby § declared to U.S.C. plans discriminat- including ERISA —from chapter protect policy of this ing against participants and ben- commerce....”); see also id. interstate status, on health that re- eficiaries based 1003(a). things, Among regu- § other to offer to small quire coverage insurers ERISA, Title I of 29 latory provisions in businesses, that limit con- pre-existing § seq., 1001 set forth “uniform U.S.C. et §§ 29 1181— dition exclusions. See U.S.C. minimum to ensure that em- standards plans benefit are established ployee power, Congress Under its commerce financially maintained a fair and sound regulated content repeatedly has also Labor, Dep’t manner.” Health See, private policies. health insurers’ Benefits, Standards, Retirement 1996, e.g., Parity Health Act of Mental Employee Bene- Compensation:
Workers’ 104-204, 2874, § 702, Pub.L. No. 110 Stat. Plans, http://www.dol.gov/compliance/ fit (1996) limits (regulating 2944 on mental (last 2011). 10, Aug. guide/erisa.htm visited benefits); health Newborns’ and Mothers’ I governs private Title of ERISA “most 1996, Act of No. Health Protection Pub.L. employee plans,” with the sector benefit (1996) 104-204, § 110 Stat. 2935 significant exceptions being “plans most maternity (requiring coverage provide by government or maintained established hospital stay); at least a 48-hour Women’s Id.; entities churches.” see also Rights Health and Cancer Act of v. F.2d Wright, Williams 105-277, Pub.L. No. 112 Stat. (11th Cir.1991) (concluding that ERISA (requiring plans certain 2681-436 regulates “plans covering only even a sin- mastectomies); offer benefits related to gle employee”). Paul and Pete Domeniei Mental Wellstone Congressional regulate efforts to health Parity Equity Health Act of Addiction did with insurance not end ERISA. Con- 2008, 110-343, 512, No. Pub.L. Stat. passed gress the Consolidated Omnibus parity be- (providing (“CO- Act of Budget Reconciliation dis- tween mental abuse healtb/substance 99-272, BRA”), Pub.L. No. Stat. medical/surgical order bene- benefits (1986), variety which a wide contains fits). provisions relating to health care and Third, Congress’ insurance, equally it is clear that health insurance. As for like- the Commerce significant under Clause the most reforms were amend- ERISA, regulation provi- added wise to the ments to “continua- extends
1335 consumption broad, extraordinarily sion and health care ser- covering any “per Indeed, many years, organization furnishes, bills, son or Congress vices. who paid is for health in care the normal substantially regulated has both health course § of business.” 45 C.F.R. 160.103.And in providers care and the commodities that 2009, Congress expanded HIPAA’s cover providers may use. As far those back as age even further to include “business asso 1946, Congress Hospital enacted the Sur- ciates” of health providers care and health (also vey and Construction Act known as insurers. See Health Information Tech Act”), 79-725, the “Hill-Burton Pub.L. No. nology for Economic and Clinical Health (1946), appropriated 60 Stat. 1040 Act, 111-5, 13401, 13404, §§ Pub.L. No. funds for the hospitals construction new 115, 260, (2009); 123 Stat. 264 45 C.F.R. post-World economy. War II § 160.103. In addition to the insurance required Hill-Burton Act hospitals receiv- portability provisions, HIPAA includes a ing federal construction or renovation privacy number of provisions that “gov provide funds to care “all persons resid- ern[ ] use and protected disclosure of ing the territorial area” and provide by health information” provid care “reasonable volume” of free care to indi- insurers, ers and health Sneed v. Pan Am. 291c(e). gent patients. § 42 See U.S.C. (11th Hosp., 47, 370 Fed.Appx. 50 Cir. requirement that hospitals provide 2010) curiam) (per (unpublished), as well strengthened free care was and broad protect privacy as of employees’ health ened, when, COBRA, part as against information by inquiries their em Emergency enacted the Medical ployers. Treat HIPAA regulates even what in (“EMTALA”). ment and Active Labor Act formation health care providers may com COBRA, 99-272, 9121, municate to one § Pub.L. No. another. See generally 100 45 (1986). 164.102-164.534; §§ C.F.R. 42 Stat. 164 EMTALA U.S.C. requires § 1320d-2. HIPAA also requires health all hospitals that receive Medicare funds to care providers to follow several adminis stabilize, screen and if possible, any pa requirements, trative including the devel tient who comes in with an “emergency opment of physical and technical privacy medical condition.” U.S.C. safeguards and employee training. See 45 1395dd(a)-(b); § see also Roberts v. Galen 164.308,164.310,164.312. §§ C.F.R. Inc., of Va., 250-51, 119 525 U.S. S.Ct. curiam). (per L.Ed.2d 648 Fourth, Congress extensively has regu- EMTALA also the ability restricts of hos lated power under its commerce the com- pitals patient to transfer a until he is sta modities used in the health care services ble or medical determination is made market, most notably drugs and medical transfer necessary. U.S.C. Food, devices. For example, Drug, 1395dd(c). provisions EMTALA’s Act, and Cosmetics Congress delegated to backed both civil private fines and a Drug Food and Administration the cause of action for those harmed authority to screen approve drugs and hospital’s failure comply. commerce, medical devices for use 1395dd(d). regulate their continued use ap- once See, proved. e.g., §§ U.S.C. regulated has also health care 355(a), 360c, 360e, 360j(e). (and, mentioned, providers health care insurers) through HIPAA. The Fifth, definition majority all parties of “health provider” care under HIPAA agree Congress’ also commerce Raich, 18-19, v. to be Gonzales price regulation to the
extends
see also
(2005);
162 L.Ed.2d
of health care
consumption
paid for
Adkins,
v.
Anthracite Coal Co.
Sunshine
pervasive
is the most
Medicare
services.
*93
381, 394,
907, 84 L.Ed.
310 U.S.
1983,
pro
the Medicare
example. Since
could
(holding
Congress
hospitals
to
pays
the fees
has set
gram
could also at-
only regulate price, but
not
system
payment
through
prospective
a
a
conditions to the flow of
tach “other
to each service
a fixed amount
assigns
id.
[commerce]”);
commodity in interstate
reimbursing hospitals
rather than
provided
(“To
...
price
for
transac-
regulate
v.
costs. See United States
for their actual
itself, and
regulate
to
commerce
tions is
(11th.
Whiteside,
1345, 1346
Cir.
F.3d
or its
alone its antecedent conditions
2002).
a feder
Congress also set
In
v.
consequences.” (quoting Carter
ultimate
schedule for Medicare
ally
fee
determined
Co.,
238, 326, 56 S.Ct.
Coal
Carter
298 U.S.
Budget
Omnibus
physicians.
to
payments
J.,
(Cardozo,
855,
power
I
to see
pressed
1162.
am hard
how
at which com
regulate
prices
the relevant “chain of events” here does
consumption
in and
modities
that commerce
dealt
not include the substantial
prices.”); accord
by
affecting
health care services
the uninsured.
practices
such
to,
price
into a
prices
directly
detailed
information
and enter
Medicaid
are not as
While
with,
level,
Secretary
agreement
rebate
regulated at the federal
has
national
ways
42 U.S.C. 1396r-8.
has
legislated in a number of
that affect the
ofHHS.
regulated prescription drug prices under
providers
thus
prices
paid
to be
to health care
companies
pro-
by requiring drug
program. Most
Medicaid
others under the Medicaid
of re-
Drug
vide discounts to states—in the form
is the Medicaid
Rebate Pro-
notable
drug purchases.
Budget
gram,
Recon-
bates—for their Medicaid
created
the Omnibus
v.
program provides
generally
Dep’t
Iowa
Human Servs.
Act
See
ciliation
of 1990.
Servs.,
that,
576 F.3d
drug companies
products
Ctrs. Medicare & Medicaid
if
want their
Cir.2009).
Medicaid,
(8th
they
provide
886-87
be covered
must
among
merce
the states is not a technical
legal conception,
practical one,
but a
assert, nevertheless,
plaintiffs
business.”);
drawn from the course of
enacting
the individual mandate Con- Wickard,
123-24,
may exemption also seek go consuming their whole lives without 5000A(d)(2). ual mandate. 26 U.S.C. go health care services or can afford to it circumstances,” pre- for “individual And as Congress’ no poses alone obstacle abili- plaintiffs mean is that a sumably what ty regulate under the Clause to Commerce fortuitously few either will individuals as a class. uninsured altogether, ill health or—more like- avoid ly health care ser- fail to consume Similarly, group of economists who —will immediately vices due to an fatal accident support filed an amicus brief in I am to draw a rele- or the like. unable plaintiffs object to the individual mandate distinction between the vant constitutional by disputing substantiality of the cost- inevitability virtual of health care con- shifting impact the mandate seeks to ad- absolute, sumption and the 100% inevita- First, they dress. claim that the individu- bility consumption. of health care There targets young healthy al mandate go is less of chance that individual will annual uncompensat- costs of through his entire life without ever con- ed care for those individuals is much less suming health care services than there is than billion. Brief for Economists See $43 will as Amici Sweepstakes Supporting he win the Irish Curiae Plaintiffs distinguishing marijuana tend between culti- individuals because be difficult to dis- tinguish elsewhere, between cost-shifters non-cost- locally marijuana grown
vated categories are fluid—a non- shifters. And and concerns about diversion into illicit chan- today may consumer or non-cost-shifter be- nels, difficulty concluding we have no tomorrow, especially come a cost-shifter if believing had a rational basis for Moreover, injury catastrophic him. befalls regulate that failure to the intrastate manufac- *99 majority Congress may reg- the concedes that possession marijuana ture and would leave ulate all of the uninsured —cost-shifters and (citation gaping hole in the CSA.” Id. and point the con- non-cost-shifters alike'—at omitted). footnote When it be difficult to Thus, sumption. Maj. Op. at 1294-95. See conduct, distinguish categories between es- Congress' majority's lights, inclu- the own fluid, pecially categories when the are Con- within the mandate's sion of non-cost-shifters Here, gress may enlarge regulated the class. create a infirmi- reach does not constitutional too, Congress may broadly regulate ty- uninsured (“Plaintiffs Br.”) 3, 10, at perverse Econ. 13. The also lead to the conclusion that it point unpersuasive, is because conflates has less regulatory power the scope of the individual mandate with larger the the national market at issue. But population event, benefits for different its relative there can no doubt mandate groups. applies The individual billion is a by any substantial amount $43 individuals, non-exempted (as all 26 U.S.C. accounting. Even the economists well 5000A(a), young and while the court) as the district recognize that the healthy may groups benefit less than other insignificant.” amount is “not Plaintiffs insurance, having from is of the 10; “[i]t Florida, Econ. Br. at accord regulation lays essence re- F.Supp.2d at 2011 WL at *26 straining hand on the self-interest of the (noting that clearly large billion “is $43 from regulated advantages the money”). connection, amount of In this I others,” regulation commonly fall to Wick- am reminded of the comment often attrib- ard, Balanc- S.Ct. 82. uted to the late Illinois Senator Everett ing groups’ competing different economic McKinley here, “A Dirksen: billion a bil- interests is not a constitutional concern for there, lion pretty you’re soon talking calibrate, the courts to but rather is “wise- money.” about real ly system left under our to resolution Relying brief, heavily on the economists’ under its more flexible and majority goes even further and sub- legislative responsible process.” Id. More- jects Congress’ findings to an analysis that over, argument that the mandate tar- startlingly looks scrutiny like strict review. that, gets young healthy majority engages in a breakdown of therefore, only this Court should look at among who responsible uninsured are impact the economic on interstate com- billion, for the presumably in order to $43 merce of those individuals is not even con- show that the mandate will not be the plaintiffs’ suggestion sistent with the own most ameliorating efficacious means of regulates that the mandate “ev- cost-shifting problem. Maj. Op. See lives, eryone every moment of their instance, 1298-1300. For majority from grave.” cradle to States Br. at 29. claims that low-income individuals and ille- suggest The economists also if even (or nonresidents) gal together aliens other whole, figure we look at the billion a $43 responsible are for around half of the total that amount is less than 1.8% overall yet shifting, exempted cost from either (which spending annual health care Con- penalty. the mandate or its Id. at 1298- trillion, gress found was or 17.6% of $2.5 terms, But majority’s even on the own economy, national U.S.C. a substantial number of cost-shifters are 18091(a)(2)(B)), and, therefore, “al- exempted from the mandate or its leged cost-shifting problem” relatively penalty, nothing and there was irrational modest justify and fails to the individual Congress’ subject about decision to to the mandate. Plaintiffs Econ. Br. at 9-10. mandate those individuals who could rea- argument unconvincing. It would sonably afford health insurance the first be novel indeed to examine whether a place. problem “substantially affects” interstate however, by comparing fundamentally,
commerce im- More as I economic see it, pact problem majority’s to the total searching inquiry size of the regulated argument throughout market. The opinion would its into whether *100 upon judge courts are not called fully prob- solves the
individual mandate
solve,
efficacy
challenged
or whether wisdom or
of the
statu-
aimed to
Congress
lems
See,
9,
tory
e.g., id. at
may have
more efficacious
scheme.
S.Ct.
there
been
(“The
however,
us,
so,
beyond
prop-
question
far
before
ways
probes
to do
not
it is wise to enforce the stat-
a court’s Commerce Clause
whether
scope
er
circumstances.”); Wickard,
any num-
in
majority suggests
ute
these
review. The
(“And
129,
legislation
to the
317 U.S.
with the
changes
ber of
Thus,
wisdom,
would,
claims,
workability,
it.
improve
]
it
for
of the
fairness[
do.”).
majority
plan
regulation
nothing
offers that
we have
example, the
it,
legislated
scalpel
put
with a finer
As Justice Cardozo
wis-
“[w]hether
should have
element
the statute
dom or unwisdom resides in the scheme of
inserting some
issue], it
“case-by-case inquiry”
say.
of each
statute at
is not for us to
calling
[the
inquiries
conduct. Id. at 1294 The answer to such
regulated individual’s
must come
omitted).
(internal
Congress,
marks
And from
not the courts.” Helver-
quotation
Davis,
619, 644,
majority
ing
would have the IRS enforce
v.
(1937);
id. at
aggressively.
the mandate more
See
1345
it”).
“by
Every
(2011),
http://www.
deregulating
tected
new
available at
Funds
proposal
way unprecedented
is
some
cms.gov/ReportsTrustFunds/downloads/tr
similarly
is
before it is tried. And to draw
line
2011.pdf. Medicaid
massive.
the
2008, approximately
against any
congressional
44.8
new
enactment
As of December
by
were covered Medicaid.
people
simply
novelty ignores
million
because of its
the
on Medicaid and
Supreme
The Kaiser Commission
in the
lessons found
Court’s
Uninsured,
in 50
Medicaid Enrollment
the
example,
Commerce Clause
For
cases.
(2010),
http://www.kff.
available at
States
squarely
the
recognized
Wickard
Court
And as
org/medicaid/upload/7606-05.pdf.
presented
unprecedented
that the case
out, Medicare and
government points
the
expansion
power
of the Commerce Clause
roughly
for
bil-
Medicaid accounted
$750
embracing
expansion.
before then
spending in 2009 alone.
lion of federal
(“Even
today,
at
before of this kind can decisive; hardly rejected it has never one either. opinion, majority of its the course Indeed, when against measured un- great significance also attaches to the sweeping changes kinds of we have seen in precedented legislation nature of the be- past, the individual mandate is far that, surely It fore us. true cataclysmic Congress’ from a expansion concluded, district court the individual power. commerce Even the briefest ex- Congress’ mandate is a novel exercise of Congress’ amination growth com- Florida, power. Commerce Clause years past merce over the makes 1283-86, F.Supp.2d WL point. Facing practical realities of novelty *20-21. But the mere fact of its highly integrated an emergent, national yield unconstitutionality. does not its See economy, USA, Court abandoned Inc., Vanguard v. Car Rental Garcia (11th Cir.2008) categorical and formalistic distinctions (up- 540 F.3d initially, that it had erected in favor of a holding, under the and Neces- Commerce pragmatic view of commerce from Clauses, drawn sary Proper the constitution- Amendment, the course of business. The had ality of the Graves 49 U.S.C. previously categories held that broad though even it was a “novel” stat- life, agriculture, insur- “relatively theory novel” economic such as employing ute ance, labor, manufacturing, mining, and pro- that the rental car market should be *102 1346 regulation from the of the “inter- power to commerce were antecedent
production
being
goods moving
as
course” of
across borders to
itself,
once viewed
which was
regulation wholly
of
conduct
of the fruits of
intrastate
limited to the movement
among
substantially affected interstate com-
activities in and
that
those antecedent
Darby,
at 119-20 &
pragmatic
a more
view merce. See
312 U.S.
the states. But
3,
Indeed,
n.
Wickard in-
by the mid-1980s. The
began to take hold
jump arguably
greater
com- volved a
far
than
earlier restrictive view of
Court’s
today.
regu-
we face
In order to
not
the New Deal-era
the one
merce did
survive
cases,
Congress
penalize
could
con-
swiftly
price,
late
where
wheat
categories
growing
all of these
within the
duct—Filburn’s
above
brought
pow-
quota
personal consump-
fixed
for his own
Congress’
lawful ambit of
commerce
See,
Steel,
any indicia that
e.g.,
Laughlin
Jones &
301 tion—absent
Filburn
er.
(“It
enter into
interstate
appar-
The historical
oí
com-
that,
power powerfully suggests
merce
C.
contrary
the arguments
advanced
The individual mandate is also a valid
plaintiffs, upholding
the individual
Necessary
Proper
means under the
mandate would be far from a cosmic ex-
regulatory
Clause to further the
end of the
pansion
boundaries
the Com-
Act’s insurance reforms.
“It has been
past expansions
merce Clause. These
accidental,
random,
long recognized
Congress
has the
have not been
or in
any way contrary
principles
pass
regulations
to first
or an
laws or
neces-
McCulloch,
addition,
preme Court
expansive defini-
It is clear under this
determining
“in
whether the Neces
validity
“necessary,”
tion of
of which
Proper
grants
sary and
Clause
recently
reaffirmed
was
particu
legislative authority to enact
Comstock,
requiring
pur-
statute,
to see whether
lar federal
we look
“convenient,”
chase of health insurance is
a means that
the statute constitutes
“useful,”
im-
effectively
or “conducive” to
implementation
related to the
rationally
regulations.
the Act’s insurer
plementing
*105
constitutionally
power.”
enumerated
guar-
that
to effectuate
As the states
tried
Comstock,
(emphasis
at
community rating
anteed issue and
re-
added);
Belfast,
v.
611 F.3d
United States
without some form of individual
forms
(11th Cir.2010).
783, 804
attest,
trying
mandate
to do the former
constitutionality of the “end”—that
The
simply
without the latter
does not work.
is,
regulations
the Act’s insurer
both See,
People
Brief for Am. Ass’n of
e.g.,
—is
unchallenged,
and
as even the district
clear
et al. as Amici
with Disabilities
Curiae
Florida,
F.Supp.2d
recognized.
court
(“Ken-
Supporting the Government
5-6
(“[T]he
285683, at
2011 WL
*32
Maine,
tucky,
Hampshire,
New
New Jer-
regulating
care insurance
end of
the health
York, Vermont,
sey,
Washington
and
New
industry (including preventing insurers
legislation
required
that
insurers
enacted
excluding
charging higher
rates to
from
all consumers in
guarantee
issue to
conditions)
pre-existing
with
is
people
market,
mini-
but did not have a
scope
clearly legitimate and within
All
coverage provision....
mum
seven
(internal
quotation
constitution.”
sky-rocketing
from
insur-
states suffered
omitted)).
marks
Once it has identified
costs, reductions in individ-
premium
ance
end, Congress
and constitutional
legitimate
coverage, and reductions in in-
uals with
choice of means. As
expansive
has
(footnote
providers.”
and
products
surance
articu-
enduringly
Justice Marshall
Chief
Wash,
omitted)); Brief for Governor of
as
come to de-
language
lated
has
“[i]n
Supporting
Amicus Curiae
Govern-
Necessary
Prop-
scope
of the
fine
(“Washington
knows firsthand
ment at
Comstock,
Clause,”
U.S. at 421. I have little doubt that the II. “proper.”
individual mandate is also
It
fundamentally,
plaintiffs
More
have
provision
violates no other
of the Constitut
that,
arguments
they say,
offered two
un-
Comstock,
ion.13
In Lopez
surrounding the
Congress’
exercise of
began
Court
to flesh out some
power.
of the out-
commerce
Lopez
In both
I,
Morrison,
surrounding
8,§
er limits
Art.
cl.
government
relied on a
Chief
Rehnquist, writing
Justice
lengthy
inferential chain of causal reason-
instances,
posited
both
ing
series of
in order to show that
the criminal
considerations,”
“significant
none of which
regulated
conduct
had a substantial effect
pose any problem in this case. See Mor-
on interstate
In Lopez
commerce.
—where
rison,
609-12,
529 U.S. at
S.Ct. 1740.
had made no factual findings
First, he observed that
regulated
con-
regarding
upon
the effects
interstate com-
*108
duct at
in Lopez
issue
and Morrison
gun possession
was merce of
in a school zone—
plainly of a noneconomic
again,
government
argue,
had to
among other
nature —
possession
handgun
of a
things,
within 1000
possession
of firearms
feet of a school in Lopez,
gender-
near schools had the natural effect of dis-
motivated felonious acts of violence in rupting the educational process, and that
610,
Morrison. See id. at
time,
120
1740
disruption,
S.Ct.
this
over
in
would
turn
(“[A] fair reading
Lopez
shows that the
lower
productivity
the economic
of our citi-
noneconomic,
zens,
criminal nature of the
causing
con-
an adverse effect on the na-
duct at issue was central to our decision in
economy.
tional
Lopez,
See
514 U.S. at
case.”). Here,
contrast,
563-64,
in sharp
ten Over the last 75 any emphatically form—in and has repeatedly care services—of it- counseled of pragmatic substantially approach affects the national econ- Commerce Clause self analysis, grounded in a “practical” omy. concep
tion
regulation,
of commercial
“drawn from
Co.,
the course of business.”
&
196
Swift
276;
Raich,
at
U.S.
accord
Moreover,
35, 125
open
this case does not
545
at
n.
2195;
U.S.
25
Lopez,
(Ken
floodgates
to an
514
unbounded Commerce
at
U.S.
S.Ct. 1624
J.,
Wickard,
power
particular
nedy,
concurring);
Clause
because the
factu-
123-24,
82;
truly
al circumstances are
unique,
Laughlin
and not
Jones &
Steel,
41-42,
susceptible
replication
elsewhere.
U.S.
This
S.Ct. 615.
Legislation enacted
uniqueness
pursuant
factual
would
Congress’
render
hold-
ing
Commerce Clause
this case limited.
I add the
cannot be evalu
unre-
vacuum,
only
ated
in light
markable
but
holding
observation that the
peculiar problems Congress
every
sought
peculiar
case
bounded
ad
fact
dress, what Congress chose to
pattern
regulate,
arising therein. See Licciardello
how
(11th
regulate,
chose to
Lovelady,
v.
and the
F.3d
1288 n. 8
Cir.2008) (“Our
connection
regulated
between the
conduct
holding,
always,
as
is limit-
problem
and the
Congress sought to re
us.”);
ed to the facts before
see also Unit-
solve.
always
Courts must
Hunter,
engage in the
ed States v.
172 F.3d
“hard work”
(11th Cir.1999)
of “identifying] objective
(Carnes, J., concurring)
markers for confining
analysis
(“The
in Com
holdings
prior
of a
decision can
Raich,
merce Clause cases.”
only
reach
far
as the facts and circum-
(O’Connor, J.,
uninsured
consume health
liorating
large
problems.
two
national
Al-
in large
yet
care services
numbers
though these economic
“are
factors
not
only
bear
a small fraction of
costs
the
formulations,
precise
the nature of
they
the services
parties
consume. The
they
be[,]
things
cannot
...
they
think
[I]
agree
pay
the uninsured fail to
for point
way
the
ato
correct decision of this
63% of the
they
health care services
re
567,
Lopez,
case.”
at
514 U.S.
ceive, and
(amounting
some 37%
to $43 1624;
see also id. at
plaintiffs
“[a]mong
also assert
v.
521
Washington
Glucksberg,
rights
702, 720,
longstanding
most
and fundamental
U.S.
117
138 L.Ed.2d
S.Ct.
(1997) (citations omitted)
being
of Americans is their freedom from
772
list the
—a
to,
give
property
forced to
their
or con- Supreme
“very
Court
been
has
reluctant
with,
private parties.”
Moore,
tract
other
Id. at
expand,”
1363
Williams,
were sacrificed.”
378 F.3d
Court uses the Due Pro
this
gone when
Glucksberg,
1239
gated to
United States
federal
ever
portion
has
invoked this
States,
tution,
by it
prohibited
nor
to the
of the
to
amendment
strike down an act of
Congress.
Instead,
respectively,
are reserved to the States
or
Supreme
Court’s
Const,
to the
U.S.
amend. X. Tenth
people.”
grappled
Amendment cases have
al
explicitly
do not
out
with
plaintiffs
exclusively
flesh
most
power
balance of
government
how the mandate violates the Tenth
between the federal
and the
plaintiffs
The state
cite the
Amendment.
states.25
claiming
generally,
Tenth Amendment
cases,
In these
the Supreme Court has
uphold
this Court were to
individ
“[i]f
[the
interpreted the Tenth Amendment’s reser-
expan
ual
and the Act’s
mandate
Medicaid
power
vation of
to the states to mean that
sion],
any pow
would
little if
there
remain
government may
the federal
not “comman-
er
...
‘reserved
the States
or
legislative processes
deer[ ] the
”
(alteration
people.’
States Br.
by directly
States
them
compelling
to en-
Const,
X).24
original) (quoting U.S.
amend.
act and
regulatory
enforce
federal
pro-
private plaintiffs suggest
And the
that the
York,
gram.”
New
U.S.
portion of
reserving
the amendment
un
(quoting
S.Ct. 2408
Va.
Hodel v.
Surface
delegated power
people
provides
Ass’n,
Mining & Reclamation
452 U.S.
their
liberty
basis for
claim.
264, 288,
101 S.Ct.
Amendment
sover
state
program.”). The Court has thus held that
eignty,
also popular sovereignty.”).
but
laws compelling
federal
governments
state
Court,
Supreme
however,
has said to
legislation
enact
providing for the dis-
precious little about the tail
waste,
York,
end
posal
radioactive
New
Tenth Amendment
that reserves
compelling
Indeed,
case,
the people.
no
agents
either from state
to conduct background checks
Court or from any lower
prospective
handgun
purchasers,
Indeed,
argument
when asked at oral
authority
if the
that federalism defines.”
Id. at
Tenth Amendment had been
words,
abandoned on
2363-64.
In other
Carol Anne Bond
appeal, counsel for the states reiterated that
standing
argu-
had
to raise federalism-based
"the
very
Tenth Amendment
still
much
challenging
constitutionality
ments
case,”
this
and that "this is both an individual
the criminal statute under which she was
*119
rights case and a Commerce Clause enumer-
indicted,
(which
prohibits
18 U.S.C. 229
the
rights
ated
case.”
knowing development, acquisition, posses-
sion,
weapons).
or use of chemical
Id. at
States, - U.S. -,
25.
In
v.
Bond United
131
true, however,
It
remains
that
the
(2011),
S.Ct.
1365 ” Reno, Printz, (quoting ment.’ v. 55 F.3d Cheffer (11th Cir.1995))); Ala. Ex- N. In so Amendment. hold- the Tenth violate (11th ICC, press, v. 971 F.2d Inc. that explained Court has ing, the Cir.1992) (“Because Tenth Amendment the imposes Amendment limits the Tenth the only already powers reserves those from come not the Congress’ power on delegated government, to the the federal text, from the but rather amendment’s only Tenth Amendment has been violated federalism, sovereign- or dual of principle goes beyond if law at [the issue] federal the Amendment embodies. Tenth ty, the Congress’ power the limits of under 156-57, York, 505 U.S. at New See Clause.”). Commerce Since the individual S.Ct. Congress’ mandate falls within commerce the lack of But because of utter Su- proper a power, its enactment is exercise court) (or any prece- other preme power “delegated the of to United States Const, dent, “people” prong pro- the amendment’s U.S. amend. the Constitution.” little, It any, support if here. vides Amendment, therefore, X. The Tenth has time the law will come to short, no independent play. role to life practical liberty into Tenth lit- plaintiffs’ breathe claims find power of to the tle support Amendment’s reservation the Constitution —whether pegged to the Fifth Amendment’s Due day yet has not arrived. people, but that Process or to Tenth Amend- Clause any precedent lack Setting aside the of power people. ment’s reservation of point, challenge on Tenth Amendment bottom, Congress rationally At conclud- individual mandate fails for addi consumption ed that of uninsured’s tional, critical, reason: when a federal services, in the aggregate, care delegated properly Congress’ within law is shifts onto others and thus enormous costs enact, po the Tenth Amendment power substantially affects interstate commerce. power. no limit the exercise of ses directly and unam- individual mandate York, See, e.g., New cost-shifting this biguously addresses (“If delegated power by regulating timing problem Constitution, in the the Tenth payment consumption means of for expressly Amendment disclaims reser fairly these also deter- services. States----”); power vation of that the mandate is an essential mined Sephardi Inc. v. Town Midrash of Surf regulation Act’s part comprehensive (11th Cir.2004) side, 1214, 1242 366 F.3d would, insurance market. I the health (“Because Religious Land Use and [the therefore, uphold the mandate as constitu- is a proper Institutionalized Persons Act] tional, this respectfully and I dissent on Congress’s under 5 of exercise point. critical Amendment, Fourteenth there is no Amendment.”); of the Tenth violation Williams, A THE 121 F.3d APPENDIX TO MAJORITY States v.
United (11th Cir.1997) (“[T]he OPINION: OVERALL STRUC- Support [Child OF NINE TITLES TURE ACT’S Recovery is a valid exercise Con Act] power under gress’s Commerce nine are: The Act’s Titles Clause, Congress’s ‘valid exercise authority to it I. Health delegated Quality, under Consti Affordable Care All Americans does Tenth Amend- tution not violate the *120 (the Programs elaims-payments II. of Public tion to their Role medical (7) ratio), 1001, 10101(f); §§ prohibi loss Quality and Effi- Improving III. waiting periods excessive tion on to obtain Health Care ciency of (8) 1251, 10103(b); §§ coverage, guaran of Chronic and IV. Prevention Disease of coverage guaranteed teed issue and re Improving Public Health (as newability §§ re V. Health Workforce Care (9) 10103(f)(1)); by § numbered prohibi Transparency Integ- and Program VI. except tion rescission on limited rity (10) 1001; § grounds, prohibition of cover Improving VII. Access to Innovative status, age denial based on health medical Therapies
Medical condition, genetic claims experience, infor mation, factors, Community or other Living VIII. health-related Assistance Supports and 1201; (11) Services “community-rated” § premi (12) ums, 1201; § prohibition of discrimi IX. Revenue Provisions1 1001, 10101(d); §§ salary, nation based on many We outline here structure and (13) development and utilization of uniform key provisions nine Titles. these coverage explanation of documents and Title I reforms business and under definitions, (14) 1001; § standardized cov writing practices companies of insurance appeals §§ erage process, 10101(g); prod and overhauls health their insurance (15) and offerings insurance for persons ucts. Title I requires private insurers 65, § who age retire before change practices their and products offer new and poli better insurance In addition to requiring insurers to offer hefty cies for consumers. Title I’s insur new, improved health products, insurance (1) ance reforms include: elimination of Title I creates new marketplaces state-run preexisting conditions chil exclusions for buy for consumers to products, those new (as §§ Act immediately, dren accompanied federal tax credits and §§ 10103(f), 10103(e));2 re-numbered I subsidies. Title establishes state-admin- (2) preexisting elimination of for conditions istered Health Exchanges Benefit where (as 2014, §§ adults in re-num both groups can, individuals and small (3) 10103(f)); by § bered elimination to, encouraged purchase health insur- benefits, annual and lifetime limits on plans through non-profits ance private 10101(a); §§ required coverage §§ 1301-1421, insurers. 10104-10105. The preventive services, 1001; (5) imme individuals, Exchanges families, allow dependent coverage diate extension of up pool small businesses to age 1001; togeth- resources imposition cap administrative on insurers’ in rela er obtain premium prices costs competitive 1. There is tenth Appendix, also a Title provide dedicated In this we citations to the opinion's sections of the Act. Although in-depth Our amendments to these nine Titles. specific provi- discussion the contents actually the amendments are in Title located sions, however, cites to sections of the X, we list the substance of the amendments now, provision U.S.Code where each being under the Title amended. be, will codified. *121 plans. monetary penalty with their federal tax employer group large those of with § 1501. I includes ex- return. Title three Exchange include: provisions § 1311. emptions excep- from the and mandate five (1) basic flexibility to establish health state penalty, together tions which ex- to the low-income individuals for programs many persons clude uninsured from (2) Medicaid, 1331; § transi- eligible for § mandate. 1501. individual program for sellers of reinsurance tional group small in the individual and insurance to publicly- Title II shifts Act’s focus (3) state, 1341; CHIP, § estab- Medicaid, markets in each programs funded such as and initiatives under the Indian Health temporary pro- risk corridor lishment Medicaid, Improvement Act. As to Care and plans for individual small gram (1) expand Title provisions: II’s Medicaid (4) markets, 1342; § refundable group 133% of federal eligibility poverty to tax credit and reduced premium-assistance (2) level, 2001; provide § Medicaid cover- enrolled cost-sharing for individuals (3) children, 2004; § for foster age former 1401-02; (5) §§ tax plans, health qualified Fund, Improvement the Medicaid rescind employee small businesses’ credits for (4) 2007; § permit hospitals pre- to make (6) 1421; expenses, § and health insurance sumptive eligibility all determinations for procedures of enrollment streamlining (5) 2202; § Medicaid-eligible populations, Medicaid, CHIP, Exchanges, through the coverage freestanding extend Medicaid to § subsidy programs, 1413. and health birth care center services and concurrent (6) children, 2301-02; §§ require to premi- employers. I Title Title next addresses recipients um for assistance Medicaid if employers imposes penalties I certain (7) 2003; § coverage, employer-sponsored any, adequate, do or an they not offer eligibility provide option a state for Medic- plan employees. their health insurance (8) services, 2303; § family planning aid provisions § I contains re- 1513. Title Community Option create a First Choice for garding “automatic enrollment” em- (9) Medicaid, 2401; § remove barriers corporations, reporting ployees large providing community-based home- and (10) informing Medicaid, 2402; § requirements, employees through of cov- services programs reauthorize Medicaid aimed options, Exchange- erage offering and out of institutions and moving beneficiaries plans through “cafete- participating community into other their own homes or plans. §§ ria” 1511-1515. Miscellaneous (11) 2403; protect § settings, and Medic- provisions transparency I include Title community- recipients aid home- equity eligible for certain government, against spousal impoverish- based services survivors, technology health information ment, § 2404. protocols, enrollment standards CHIP, discrimination on re- prohibition against provides As to Title II enhanced § funding. support federal 2101. goods fusal to furnish services or used through Sep- Act: reauthorizes CHIP 1552, 1553, §§ facilitate suicide. assisted 2015, 10203; tember from Octo- 1556, through September ber increas- mandate, I Title contains individual matching es rates for CHIP state taxpayers either requires cap, percentage points, up to 100% II Title states to main- pay requires purchase health insurance *122 tain eligibility through CHIP September Title III primarily addresses Medicare. § 2019. 2101. Title III establishes new Medicare pro (1) grams, including: pur value-based Title II also amends and extends the chasing program hospitals for links Indian Care Improvement Health Act payments Medicare to quality performance (“IHCIA”). § 10221. The Act’s IHCIA common, high-cost conditions, 3001; § amendments, (1) inter alia: make the IH- (2) a Center for Medicare & Medicaid In (2) CIA’s provisions permanent; expand novation to research and develop innova programs diseases, to address such as dia- payment tive and delivery arrangements, betes, that are prevalent among the Indian (3) 3021; § an Independent Payment (3) Ad population; provide funding and techni- visory present Board to Congress pro cal assistance for tribal epidemiology cen- (4) ters; posals to establish reduce behavioral Medicare health initia- costs and im tives, especially youth prove as to §§ Indian quality, 10320(b); (4) suicide (5) prevention; and long-term authorize program new to develop community health care and community-based home- and care teams supporting medical homes to in for the system. 10221; § Indian health see crease access to community-based, coordi S.1790,111th (2009). Cong. care, §§ nated 10321. Title III re vises the Medicare Part D prescription Title provisions II’s create, also or ex- drug program and reduces so-called pand, other publicly-funded new programs “donut hole” coverage gap prog (1) that: establish a pregnancy assistance § 3301. Title III extends a floor ram.3 fund for pregnant and parenting teens and on geographic adjustments to the Medi (2) women, 10212; § expansion fund care fee schedule to provider increase Aging State fees and Disability Resource Cen- ters, (3) § rural 2405; § areas. maternal, fund infant, early childhood visiting home pro- Other sundry provisions Medicare in Ti- grams in order reduce infant and ma- (1) tle III include: quality reporting for ternal mortality, 2951; (4) § provide for long-term hospitals, care inpatient rehabil- support, education, and research for post- itation hospitals, and hospice programs, partum (5) depression, 2952; § support (2) 3004; § permitting physician assistants personal responsibility education, 2953; § to order post-hospital extended care ser- (6) restore funding for abstinence edu- vices, 3108; (3) § exemption of certain cation, (7) 2954; § require inclusion of pharmacies from accreditation require- information about the importance of fos- ments, (4) 3109; § payment ter-care for bone den- children designating health care tests, sity 3111; (5) § attorney part them outpa- extensions of their transition planning for aging tient out of provisions, either hold-harmless the Rural foster care programs, § or other Community Hospital demonstration pro- 3. The Medicare Part D "donut hole” scription is the drug costs. See 42 U.S.C. 1395w- gap prescription drug coverage, 102(b)(3)(A), (b)(4) (2009). where ben- 2006, the do- prescription eficiaries' drug expenses exceed nut hole yearly extended to prescription drug coverage initial limit yet $2,250 but do expenses reach $3,600, between with threshold, the catastrophic coverage meaning years values for adjusted by later an annual pay beneficiaries must pre- of those percentage 100% increase. See id. hospital labeling nutrition of standard menu jeet, Medicare-dependent restaurants, 4205; items at chain 3123-24; (6) payment §§ program, *123 nursing reasonable break time for mothers 3131; care, § for home health adjustments bathroom, place, and a other than (8) 3132; (7) reform, of § revision hospice (5) used, 4207; op- § on may be research wheelchairs, power-driven for payment public health deliv- timization services (9) 3136; biologi- payment § for biosimilar (6) 4301; § and ery, employer-based CDC (10) 3139; study § an HHS products, cal 4303; (7) programs, advancing § wellness Medicare-dependent hospitals, on urban pain and for care man- research treatment (11) 3142; pro- § Part C benefit Medicare (8) 4305; § epidemiology-labora- agement, amendments, and simplification tection 4304; (9) tory capacity grants, § and fund- (12) 3202; premium § increase in and obesity ing for childhood demonstration D high-income for Medicare Part amount § projects, 4306. beneficiaries, § in- Title III also 3308. (1) improv- supply for Title V to increase the grants new seeks cludes federal (2) health care workers education 3509; through health, § health ing women’s loans, training grants, spending. and other 3501; research, § delivery system care (1) Title V: student modifies federal (3) management medication services and (2) 5201; program, § loan increases the diseases, § 3503. treatment chronic 5202; § nursing program, student loan Ti- prevention. on Title IV concentrates (3) pro- a loan repayment and establishes Prevention, National tle creates the IV pediatric subspecialists, juvenile for gram Promotion, and Public Health Health mental health and health providers, public Council, for a who ar- practice and authorizes billion underserved workers $15 (1) eas, § for: provides 5203. Title V also Public Health Fund Prevention and new development health workforce state care smoking cessation support initiatives from (2) 5102; § care grants, national health §§ Title obesity. fighting (3) commission, 5101; § nurse- workforce pro- publicly-funded authorizes new IV (4) clinics, 5208; § health work- managed (1) grams preven- an oral healthcare for (5) 5404; § diversity training grants, force (2) 4102; § campaign, education tion pediatric, and general, public annual vis- coverage Medicare for wellness (6) dentistry, 5303; § mental and behav- (3) 4103; its, de- operation § and and training grants, and ioral health education clinics, velopment of school-based health (7) 5306; § education nursing advanced (1) § Title waives Medi- IV also: (8) 5309; § grants promote grants, deduct- requirements care coinsurance and (9) 5313; workforce, § community health 4104; services, § preventive most ibles for Qualified Health Federally for spending (2) provides states with an enhanced (10) Centers, 5601; § reauthorization program if state Medicaid funds-match Emergency of the Wakefield Medical Ser- preventive certain clinical services covers program, § 5603. Title vices Children immunizations, § adult 4106. Title IV (1) of addi- addresses: the distribution V (1) cover- provides further for: Medicaid (2) 5503; § residency positions, tional comprehensive tobacco cessation age for didac- counting rules for resident time (2) women, 4107; § for pregnant services in non- scholarly activities and tic and 4201; §§ grants, settings, § 5504-05. community provider transformation Title VI creates new transparency and tion on programs referrals to at high risk (8) abuse, 6406; § waste and requirements require- anti-fraud for physician- ment of face-to-face phy- encounter before hospitals participating owned in Medicare sicians certify eligibility for home and for facilities under nursing Medicare health services or durable medical equip- or Medicaid. Title VI authorizes the HHS (9) Medicare, 6407; ment under prohibi- Secretary to monetary reduce civil pen- tion Medicaid payments to institutions alties for facilities that self-report and cor- States, entities outside the United deficiencies, 6111; rect establish *124 (10) 6505; § of the Depart- enablement a nationwide background-check program ment of Labor to issue administrative for employees long-term of certain support summary cease-and-desist orders and facilities, § service 6201. Title VI also summary seizure against plans orders in (1) provides: screening providers of and financially condition, 6605; § hazardous suppliers participating Medicare, Medic- (11) mandatory state use of the na- aid, CHIP, (2) 6401; § new tional penal- coding initiative, correct § 6507. ties for false statements on applications or Title VII expands extends and the drug contracts to participate a federal health through discounts the 340B program.4 § care program, 6408. § 7101. Title VII process establishes a for FDA licensing of biological products shown Title VI also includes the Justice Elder to be biosimilar or interchangeable with a Act, designed prevent and eliminate eld- licensed biological product. § 7002. abuse, er neglect, and exploitation. § 6703. Title VIII a establishes national volun- (1) Other Title provisions VI include: de- tary long-term care program insurance for mentia prevention and abuse training, purchasing community living assistance (2) 6121; § patient-centered outcomes re- services and support persons with func- search funded fee on $2 accident or tional § limitations. (3) health policies, 6301; § insurance fed- (1) Title IX includes: an excise tax on eral coordinating counsel for comparative high-premium employer-sponsored health research, (4) 6302; § effectiveness en- (2) plans, 9001; § increase in taxes on hanced Medicare and program Medicaid from distributions individuals’ health sav- (5) integrity provisions, 6402; § elimina- ings accounts, (3) 9004; § increases duplication tion of between the Healthcare employee portion of the FICA hospital Integrity and Protection Data Bank and tax insurance for employees with wages the National Bank, Practitioner Data over certain amounts, 9015; § threshold (6) 6403; § reduction of period maximum (4) an additional tax of on 3.8% investment for submission of Medicare claims to not income above certain thresholds to fund months, (7) more than 12 6404; § require- Medicare, 9001, 10901; §§ HCERA ment physicians provide 1402; (5) $2,500 § documenta- limitation on individu- 4. Section 340B of the Public generally, Health Service types certain enumerated of feder Act, 256b, § U.S.C. program establishes a ally serving funded health care facilities low- whereby HHS into enters contracts with man- Id.; patients. generally income see Univ. Med. ufacturers outpatient drugs certain under Shalala, Cir. S. Nev. v. 173 F.3d which the provide drugs manufacturers those (D.C.Cir.1999). prices at discounted to "covered entities”-— FIRE HARTFORD INSURANCE un- spending accounts health flexible als’ COMPANY, Plaintiff- (6) 9005; imposition § plans, cafeteria der Appellant, manufacturers and an annual fee on drugs, prescription of branded importers v. (7) 9008; the tax deduc- elimination of § STATES, Defendant-Appellee. UNITED to the expenses allocable Medicare tion for (8) 9012; subsidy, § D decrease Part No. 2010-1198. for medical ex- tax the itemized deduction (9) 9013; on § an excise tax penses, Appeals, Court of United States services, § IX tanning 10907. Title indoor Federal Circuit. cost inclusion provides
also for: Aug. coverage employer-sponsored forms, 9002; expansion of infor- W-2 9006;
mation-reporting requirements,
(3) hospitals for requirements additional designation and tax “charitable”
receive 9007; (4)
status, study report § on drug new fees on
the effect of Act’s on veterans’
manufacturers and insurers care, 9011; prohibition §
health employee com- deducting insurers’
health 9014; (6) $500,000, tax over
pensation companies fewer than 250 with
credit engaged research on
employees discoveries, 9023; therapeutic
qualifying simple establishment of cafeteria businesses, § for small 9022. Title
plans fee on health insur-
IX assesses annual apportioned companies, which is
ance
among designed insurers on a ratio based share of the net
to reflect each insurer’s in the United States
premiums written 9010, 10905; §§ care market. § 1406.
HCERA