Is Obamacare Constitutional?

The attorney generals in several states are mounting a constitutional attack on Obamacare. The focus of that attack is the claim that the Commerce Clause in the Constitution cannot be stretched to mandate that individuals be required to purchase health insurance.

Article 1, Section 8, of the U.S. Constitution reads that “the Congress shall have power … to regulate commerce … among the several states” and appears to provide broad regulatory powers to the federal government. Yet many Republicans, libertarians, and Tea Party advocates hold that the Founders intended a “free-enterprise” system here with only a very limited role for government regulation.

Yet regulation of “commerce” has always existed in the U.S., even during the Colonial period. That trend accelerated in the late 19th Century with the Interstate Commerce Commission and the Sherman Antitrust Act and expanded immensely during World War I.

Some wartime economic regulation was abandoned in the 1920s but regulation grew exponentially during the New Deal and World War II. Today, many hundreds of industries face many thousands of rules and regulations propagated by many dozens of governmental agencies concerning just about anything. The massive Obamacare legislation (2,400 pages) that is being court challenged is only the latest example in a long regulatory trend line.

Although most constitutional challenges fail, there are a few instances where the courts have struck down (state) government regulation. Most of these occurred prior to the New Deal era when the courts took seriously the admonition (Article 1, Section 10) that “no state shall [impair] the obligation of contracts.” This principle allowed the courts to void some state laws that attempted to fix maximum hours of work or set minimum wages.

At the federal level, a traditionally conservative Supreme Court in 1935 struck down both the National Industrial Recovery Act (NRA) and the Agricultural Adjustment Act (AAA), dealing a major blow to Roosevelt’s original New Deal program. (The farm program, without the offending “processor tax”, was re-legislated and became perfectly constitutional).

Recently in U.S. v. Lopez (1995), the high court accepted a slightly narrow reading of the Commerce Clause when it struck down a regulation that forbade gun possession in close proximity to schools. Yet these cases are clearly the exception to the general rule that “almost all federal regulation is ‘legal.’”

To find that the federal insurance mandates and regulations in Obamacare are illegal would require a radical rethinking of the intent and meaning of the Commerce Clause.

Such a rethinking should start by noting that the original intent of that provision in the Constitution was likely an attempt to prevent the individual states from placing taxes and duties on interstate commerce, which had been their habit prior to the Constitution.

Moreover, the expression “to regulate” can mean “to make regular” and was likely an attempt by the Founders to normalize trade between consumers and businesses in different states, surely not any plan to have Congress “command and control” the economy. Yet few sitting jurists (Supreme Court Justice Clarence Thomas may be the exception) appear willing to rethink and challenge precedent in this important area of the law.

Finally, the Congress and the courts would have to come to grips with a massive amount of empirical evidence that demonstrates that economic regulation (including healthcare regulation) is costly and counter-productive and actually harms consumers.

Obamacare is an egregious overreach of federal power, an economic boondoggle, and a gross violation of individual rights. Yet it may well be “constitutional” unless the Supreme Court is ready to think and rule outside the box.