Consitutionality of the Individual Mandate Under the Commerce Clause

Consitutionality of the Individual Mandate under the Commerce Clause

The individual mandate that makes the purchase of health insurance mandatory is not constitutional under the commerce clause defined in the previous cases. Congress' regulation should be limited to those who are already active in the market but not those who are inactive. The aggregation principle should only be used in economic activities with moderate inferences. The commerce clause only grants Congress the power to regulate the existing activities.

People who are inactive in the market cannot be regulated under the commerce clause

The commerce clause only grants Congress the power to regulate the people who actively participate in commerce. The individual mandate imposes a penalty for the failure to pay for insurance monthly. Here, what Congress is regulating is not the insurance industry but people who are not willing to purchase health insurance. It must be noticed that when people choose not to buy health insurance they are being inactive, which means they cannot be regulated.

There are some key distinctions between the individual mandate and the previous cases where the commerce clause holds. In Wickard, the Court makes it clear that in order to regulate commerce, individuals have to engage in commerce. Filburn is active in the wheat production and therefore his activity can be regulated due to its effects on the price of wheat . Also, in Raich, the Court defined economic activity as "the production, distribution and consumption of the commodities. " In this case of the individual mandate, the commodity is the individual insurance. Based on some previous rulings, the people that Congress aims to regulate are obviously not producing or distributing health insurance. Also, as they do not purchase health insurance, they cannot be considered consumers. In short, these people are not in commerce and therefore should not be regulated.

The opponents may bring up the argument that the consumption of commodity is evident, as when people encounter illness they will use health insurance. Consequently, there will be a free rider problem. People who do not buy the insurance now will enjoy its benefits in the future. This argument is invalid in two ways. First, this assumption that all people who do not purchase insurance will use it in the future is too far-fetched. Second, in the Wickard and Raich where the statues hold, it is constitutional to impose penalties to actions that can impact the commerce by a small degree, because if aggregated, they can have big damage. In the case of Thomas law center v. Obama, it is cleat that Congress must wait to impose a penalty until the commission of act . This is not the case in the individual mandate. It might be constitutional to regulate the people who do not purchase health insurance but enjoy its benefits in the future. Not all people are free riders. Congress went too far beyond its power to regulate all people who choose not to buy insurance.

The substantial effect theory cannot be applied to the individual mandate.

The substantial effect theory should not work in the case of the individual mandate. The previous cases have defined where this theory can be used and where it cannot be used. The aggregation principle must have some limits, or otherwise Congress will have limitless power. If a person chooses to do one thing, that person is also making a decision not to do other things at that time. If aggregation principle can be applied here, then Congress has the power to regulate any actions of people at any point of their lives.

The direct involvement in the activity is very important to determine whether the substantial effect theory can be applied or not. In Wickard, Congress argues that it is constitutional to regulate Filburn's action because the home-grown wheat supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market, and the wheat in this sense competes with wheat in commerce . The aggregation theory holds because the farmer is directly involved in the concerned economic activity. As a participant in the wheat market, Filburn's decision will directly impact the price of wheat. The inference is that such impact can be aggregated, as other farmers will follow Filburn if such action to produce more for private use is not regulated. On contrary, in Lopez, the Court rules that the Act is unconstitutional because it piles inference over inference. The Court is afraid that Congress' power becomes unlimited and Congress begins to regulate anything it concerns about . Lopez is not directly involved in the commercial market. Congress first infers that his action to brings gun to school can discourage people from going to school, then continues to infer that people who do not go to school will make less contribution to the economy. Therefore the aggregation principle cannot hold here because too many inferences are made.

Based on the limitation of the aggregation principle defined in Lopez and Wickard, the principle should not be applied to the individual mandate because the people whom Congress intends to regulate have no direct involvement. Similar to how Congress, in Lopez, piles inference over inference to show that bringing gun to school can have a substantial effect , Congress uses too many inferences in the individual mandate. Congress first infers that an individual who is currently uninsured will certainly need health care in the future, and then continues to infer that this free-riding action, if aggregated, can harm the national insurance market.