ObamaCare and the Courts

By now you’ve heard a parade of diverse (read: all far left) law school professors tell you that the lawsuits filed by the state attorneys general are “frivolous.” I guess it doesn’t take much to be a law professor these days. “Frivolous” is a legal term which basically means so obviously wrong that you’re wasting the court’s time. For a lawyer to call these suits “frivolous” is pure propaganda, and tells you more about the lawyer than the law. Let’s talk about the two major claims and what their chances of success might be.

Issue One: Individual Mandates.

The first major challenge involves the requirement that individuals obtain insurance under threat of being fined. This is, in fact, the key to making ObamaCare work (to the extent that it does). This is what allows the Democrats to claim this bill provides “universal coverage,” even though it actually “provides” no coverage, and they are relying on the fines expected to be paid by 24 million Americans to finance the bill.

ObamaCare defenders argue that this is just like requiring drivers to get car insurance. But that argument is laughable. First, the analogy is flawed, as you only need to get insurance if you intend to drive. ObamaCare, on the other hand, requires you to buy insurance no matter what. More importantly, the ObamaCare defenders are comparing apples to oranges. It is the states, not Congress, that impose the car insurance requirements. States, unlike Congress, have the power to do that because they have the power to regulate intrastate activities. Congress has no such power; it may only regulate interstate activities. The fact that states can do something that is clearly within their power cannot be used to show that Congress has that same power.

Congress’ power to regulate comes from its power to regulate interstate commerce. Congress has the power “to make all laws which shall be necessary and proper” to regulate interstate commerce.

Using this, ObamaCare supporters point to a 2005 Supreme Court ruling, Gonzales v. Raich, in which the court held 6-3, that the federal government could make it a federal crime for Californians to grow marijuana at home for their own personal, medical use. According to the court, regulating local behavior is necessary and proper when doing so is an “essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.”

But there are two problems with applying this to ObamaCare. First, while the drug trade clearly involves interstate commerce, and thus is subject to federal law, it is not at all clear that the same is true of "health care." Indeed, while parts of the health care industry are clearly engaged in interstate commerce, at its core, health care remains about patients and doctors, and that relationship does not touch upon interstate commerce. Thus, it's not clear that Raich can apply.

Secondly, even if the court finds such a connection, the situation in Raich still isn't comparable to ObamaCare. Indeed, in Raich it was obvious that allowing drug growers a safe harbor by claiming that they only sell locally, would all but wipe out Congressional efforts to stop the drug trade. But the same is not true with ObamaCare, where it’s not at all clear how one person not having insurance could in any way hurt other efforts to regulate health care?

So what the ObamaCare supporters argue is that the cumulative effects of the uninsured using emergency room facilities affect interstate commerce. But the Supreme Court rejected this very argument in U.S. v. Morrison, in 2000, where the court struck down part of the Violence Against Women Act. In U.S. v. Lopez, in 1995, the Supreme Court held that Congress could not make it a federal crime to possess a gun near a school zone, because possession of a gun near a school had nothing to do with interstate commerce. So when the Congress passed the VAWA, they specifically included findings that the cumulative effects of domestic violence are a burden on the economy and, thus, affect interstate commerce -- the same argument being advanced now. The Supreme Court rejected that argument in Morrison. There is no reason to believe the court will change its mind for ObamaCare.

Moreover, even if the court accepted this argument, ObamaCare still runs afoul of another issue that arises in constitutional law. The Supreme Court generally requires that laws be narrowly tailored to fit the harm they tend to address. In other words, if the use of the emergency room by the uninsured was the harm to be addressed, then the Supreme Court is unlikely to allow a solution that imposes broad-based requirements on all Americans, when the Congress could instead have found less invasive solutions.

Additionally, in each of the above cases, the court had serious heartburn about letting Congress regulate these activities. But ObamaCare goes even further than this: it regulates “inactivity.” I am not aware of any instance in which the court has ever allowed Congress to impose a penalty for failing to engage in interstate commerce.

So what does this mean? It’s hard to tell. Predicting how courts will decide issues, especially close issues like this one, is extremely difficult. There are dozens of side issues that could affect the outcome, and there are political considerations as well as legal considerations. Would the Supreme Court launch itself into something as far-reaching and contentious as this issue? Absolutely. Would it defer to Congress? That seems to be the default setting of the court these days, but not always.

Overall, I would say, the odds are even that this part will be overturned.

Issue Two: State Mandates.

The second major issue is the requirement that state governments expand Medicaid (the only actual extension of coverage in the bill). Most people assume Medicaid is a federal program, but that’s not entirely accurate. Medicaid is really a block grant, where the federal government gives money to the states provided that the states pass certain state laws. This is exactly like the highway bills you’ve probably heard about, where the feds agree to pay for the construction of new highways, if the state imposes a seat belt law. So in reality, the feds aren't imposing anything on the states, they are simply offering a bribe. But there is a catch.

In 1992, the Supreme Court held in New York v. United States, that the federal government can’t conscript states to act as its agents and it cannot “simply commandeer the State’s legislative processes.” What this came down to was that Congress could not cross the line from “encouragement to coercion.”

Thus, the anti-ObamaCare argument will be that Congress crossed that line from encouragement to coercion when it imposed these very high requirements (requiring states to spending billions of state tax dollars on expanding Medicaid eligibility and establishing these insurance exchanges) under threat of forcing the states to drop out of Medicaid if they refused.

I understand this argument, but I doubt the court will buy it. Unless the states can come up with evidence that they really could not drop Medicaid, i.e. that they truly had no choice, then it is unlikely that the Supreme Court will see ObamaCare as coercive.

Overall, I would say, the odds are about 10% that this part will be overturned.