//  3/23/17  //  In-Depth Analysis

On January 3, Representative Steve King (R-Iowa) introduced a bill in the House of Representatives that would bar any citation to the Supreme Court’s decision in National Federation of Independent Businesses v. Sebelius (NFIB). The bill is curious for all kinds of reasons.   Just to name one, why might a Republican legislator want courts not to cite NFIB?   When the Democratically-controlled Congress enacted the Patient Protection and Affordable Care Act (ACA), Republicans, including now-Vice-President Mike Pence, excoriated the ACA’s minimum-coverage requirement as wildly unconstitutional.  Five Justices in NFIB agreed with them that Congress lacked the power to impose a monetary penalty (as opposed to a tax) on individuals for failing to purchase health insurance.   

Having lived through this period, but barely survived it—I was clerking on the U.S. Court of Appeals for the Sixth Circuit when that court heard the challenge to the minimum-coverage requirement, and on the U.S. Supreme Court when it did—let me summarize the arguments made against the mandate:

  • (1) Congress cannot regulate “inactivity”—the failure to do something.  If Congress could regulate “inactivity,” Congress could do anything (including the ever-present existential threat that Congress could require individuals to purchase broccoli).  Individuals who do not purchase health insurance are “inactive”; they are doing nothing.  Therefore, Congress cannot regulate such individuals by imposing a monetary penalty on them for failing to purchase health insurance.
  • (2) Congress cannot impose “mandates.”  The minimum-coverage requirement is a mandate because it requires individuals to either purchase health insurance or pay a penalty to the federal government.  This mandate/requirement is a fundamental affront to individual liberty because it penalizes individuals for failing to purchase a good they do not wish to have. 

In NFIB, five Justices (the Chief Justice and the joint dissenters—Justices Scalia, Kennedy, Thomas, and Alito) endorsed these arguments. Given that NFIB agreed with the Republicans’ position on the constitutional legitimacy of the minimum-coverage requirement, why might a Republican be so eager to see his party’s belabored constitutional principle ride off into the sunset?

The events of the last few weeks provide one answer.  It was then that Paul Ryan unveiled the Republicans’ heretofore secret health care plan—their immensely superior (and obviously constitutional!) alternative to the ACA, which they call the American Health Care Act (AHCA).  Because the Republicans had fixated so much on the purported unconstitutionality of the ACA’s minimum-coverage requirement, it would have been reasonable to think that the Republican plan would lack such a requirement, or even a similar one.

But reason, it seems, has no place in the Republicans’ constitutional arguments with respect to health care. Section 133 of the American Health Care Act contains the following provision, which would replace the minimum-coverage requirement (if this is too technical, jump past it, since in the next paragraph I explain in plain English what all this statutory language means):



(1) IN GENERAL.—Notwithstanding section 2701, subject to the succeeding provisions of this section, a health insurance issuer offering health insurance coverage in the individual or small group market shall, in the case of an individual who is an applicable policyholder of such coverage with respect to an enforcement period applicable to enrollments for a plan year beginning with plan year 2019 (or, in the case of enrollments during a special enrollment period, beginning with plan year 2018), increase the monthly premium rate otherwise applicable to such individual for such coverage during each month of such period, by an amount determined under paragraph (2).

(2) AMOUNT OF PENALTY.—The amount determined under this paragraph for an applicable policyholder enrolling in health insurance coverage described in paragraph (1) for a plan year, with respect to each month during the enforcement period applicable to enrollments for such plan year, is the amount that is equal to 30 percent of the monthly premium rate otherwise applicable to such applicable policyholder for such coverage during such month.

(b) DEFINITIONS.—For purposes of this section:

(1) APPLICABLE POLICYHOLDER.—The term ‘applicable policyholder’ means, with respect to months of an enforcement period and health insurance coverage, an individual who—

(A) is a policyholder of such coverage for such months;

(B) cannot demonstrate (through presentation of certifications described in section 2704(e) or in such other manner as may be specified in regulations, such as a return or statement made under section 6055(d) or 36C of the Internal Revenue Code of 1986), during the look-back period that is with respect to such enforcement period, there was not a period of at least 63 continuous days during which the individual did not have creditable coverage (as defined in paragraph (1) of section 2704(c) and credited in accordance with paragraphs (2) and (3) of such section); and

(C) in the case of an individual who had been enrolled under dependent coverage under a group health plan or health insurance coverage by reason of section 2714 and such dependent coverage of such individual ceased because of the age of such individual, is not enrolling during the first open enrollment period following the date on which such coverage so ceased.

In plain English: This provision imposes a penalty on individuals who have not purchased health insurance the year before.  Subsection (a)(1) directs that the penalty be paid to an insurance company when an individual eventually purchases health insurance. Subsection (a)(2) establishes that the penalty be “equal to 30 percent of the monthly premium rate otherwise applicable” to that individual.

Well Sinead O’Rebellion! The Republicans, it seems, have finally come to embrace the constitutionality of imposing a monetary penalty on individuals for failing to purchase health insurance.

This is small consolation to those of us who have viewed the constitutional arguments against the minimum-coverage requirement with considerable skepticism over the years.  It is even less consolation given that at least some people still appear unwilling to admit that Republicans’ embrace of the AHCA underscores that the arguments against the minimum-coverage requirement were flimsy at best and should never have prevailed.

Instead, valiantly maintaining a straight face, these holdouts purport to distinguish the Republican-created penalty from the one enacted by a Democrat-controlled Congress and signed by a Democratic president.  For example, Josh Blackman has a series of posts, one of which is entitled “The Enduring Potency of the Liberty Argument Against the Individual Mandate.”  He quotes with approval Seth Chandler’s Forbes post, which says:

“[I]t won’t be a tax on doing nothing like the Affordable Care Act imposed—but, if people know about the penalty, it might be fairly effective and feel somewhat less coercive.”

Their argument seems to be that the AHCA penalty is perfectly constitutional because it only kicks in when an individual becomes active in the health insurance market.  The AHCA is accordingly much better, in Blackman’s words, for “liberty” and “freedom” because it applies only to individuals who choose to be active in the health insurance market.

It is true, of course, that the AHCA penalty regulates only those individuals who eventually purchase health insurance. But the AHCA does not merely regulate the purchase of health insurance, full stop.  It imposes a distinct regulation on those individuals who have not purchased insurance in the prior year.  How does the AHCA regulate those individuals?  By penalizing them for their failure to purchase health insurance—in other words, by sanctioning the very “inactivity” we were told Congress could not possibly regulate, lest our very constitutional order collapse.

The AHCA does not raise everyone’s health insurance rates to address whatever cost-shifting there is in the insurance market; the AHCA only raises insurance rates for those individuals who were previously “inactive” in the insurance market.  That is also why the AHCA imposes a higher rate on such individuals—because they did not previously purchase health insurance. Plain as day, then, the AHCA imposes a penalty on individuals for their prior inactivity—in other words, for not purchasing a product (health insurance).

Imagine, for a moment, a slightly different AHCA.  Section 133-prime, we’ll call it, also applies only to those individuals who purchase health insurance without having obtained coverage for the prior year.  Instead of establishing a higher insurance rate when such individuals purchase health insurance, section 133-prime provides that they must serve 1 year in jail.  That law still applies only to those individuals who choose to become active in the health insurance market.  But it, like the AHCA, is sanctioning them for their prior inactivity, not for their purchase of health insurance.  The AHCA does exactly the same thing—it sanctions individuals who have not previously obtained health insurance with a higher insurance rate, rather than jail time. 

The AHCA is thus a penalty “on doing nothing” (not purchasing health insurance).  The penalty is just collected from those who (eventually) decide to do something. I guess we are supposed to take from this that we have a federal government of enumerated powers after all.

The AHCA’s defenders thus lay plain the empty formalism that has always plagued the arguments against the minimum-coverage requirement. 

To get at this formalism another way, let’s consider one of the “parade of horribles” we were led to believe would occur if Congress could enact the minimum-coverage requirement:

  • If the minimum-coverage requirement were constitutional, Congress could require us to purchase broccoli in order to stimulate prices in the broccoli market. 
  • If the AHCA were constitutional, Congress could merely say “if you purchase broccoli one year without having purchased broccoli the previous year, you must pay $1 million for broccoli.” 

I feel the freedom and liberty all around me. 

The AHCA also makes equally plain the hypocrisy of this administration. Consider how now-VP Mike Pence’s arguments against the ACA’s minimum-coverage requirement stack up against the AHCA. As a congressman, Pence was among the sponsors of a bill to repeal the ACA.  And before the ACA was signed into law, Pence delivered the following speech on the House floor:

“The latest version of ObamaCare is a government takeover because it will mandate private citizens’ purchases of health care whether they need it or want it or not… Mr. President, government mandates, government-run insurance and more government control is a government takeover of health care.”

The minimum-coverage requirement was a “mandate” only in the sense that it forced individuals to choose between purchasing health insurance and paying a monetary penalty to the federal government of several hundreds of dollars.  The AHCA offers individuals a different choice—purchase health insurance now (when you might not need or want it) or purchase health insurance later at 30% higher cost.  Is that more of a choice than the ACA provided? 

At some point the conditions on future purchases of health insurance become so onerous that the only choice is to purchase health insurance now or never to purchase it at all.  That arrangement hardly seems more conducive to freedom of choice and liberty than the ACA.  Especially to someone like Mike Pence, who likened NFIB (which ultimately upheld the minimum-coverage requirement as a tax) to the September 11 terrorist attacks. Or someone like Paul Ryan, who just last week maintained that “the fatal conceit of Obamacare” is that the penalty “ma[d]e people buy something.”  Or Blackman, who continues to insist there is an “intrinsic affront to laymen of the federal government forcing them to buy health insurance.” 

I guess laymen find it less of an affront when they are confronted with the choice to buy health insurance now, or potentially be priced out of the market in the future?

This intuition also lurks behind Blackman’s claim that the AHCA somehow underscores the “enduring potency of the liberty argument” against the ACA’s minimum-coverage requirement.  Is the AHCA really so much better for liberty and freedom than the ACA?  Blackman seems to think so:  To him, it just “feel[s]” “somewhat less coercive” (emphases mine) to penalize individuals who did not previously purchase health insurance by forcing them to pay 30% more when they do obtain health insurance than it is to require everyone who does not obtain health insurance in a given year to pay a few hundred dollars as a penalty.  This “feel[s]-somewhat-less-coercive” line is supposed to distinguish constitutionally permissible forms of regulation from impermissible ones. 

I guess we are supposed to take his word that this line is better than the  line the government had proposed in NFIB to distinguish mandates that are constitutional from mandates that are unconstitutional. In NFIB, the government had argued that while mandates might not generally be constitutionally permissible, they are permissible in the health care/health insurance market given the unique features of that market. In Judge Sutton’s words, “regulating how citizens pay for what they already receive (health care), never quite know when they will need, and in the case of severe illnesses or emergencies generally will not be able to afford, has few (if any) parallels in modern life.” The distinction between the health care market and other markets seems reasonable. It doesn’t seem any less reasonable than the “feels somewhat less coercive” standard, which Blackman uses to distinguish constitutional mandates (the AHCA) from unconstitutional ones (the ACA).  The “feels somewhat less coercive” standard is certainly not more administrable, more clear, or more tied to the constitutional text than the “health care is unique” standard.   

I am also not convinced the ACHA is any less coercive than the ACA.  What if the 30%-more-expensive health insurance plan is more than the penalty exacted under the ACA?  What will happen to the person who can’t afford to pay that extra 30% more—will they be priced out of the health insurance market entirely, never able to obtain insurance?  That is an awfully steep price to pay for prior “inactivity.”

To understand the audacity of the ACA-detractors-but-AHCA-defenders, we could also take a look at what the five Justices said when they concluded that Congress could not impose a monetary penalty on individuals for their failure to purchase health insurance.  The Chief Justice, for example, stated that:

The individual mandate … does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce.

You can imagine the AHCA’s defenders saying “but the AHCA doesn’t compel individuals to purchase a product; it gives them the choice between purchasing the product now or purchasing it at a much higher rate in the future.”  True enough, but the ACA also didn’t “compel” individuals to purchase a product; it gave them the choice between purchasing the product or paying a several-hundred-dollar fine. 

You can also imagine the AHCA’s defenders saying “but the AHCA only regulates those individuals who become active in commerce!”  Sure. But the AHCA has treated certain individuals differently from every other person who is also active in commerce.  The AHCA singles out those individuals who have previously “fail[ed]” to “purchas[e] a product.”  It is imposing a regulation that uniquely targets those individuals on the basis of their prior inactivity.In the words of the joint dissenters:

“If this provision ‘regulates’ anything, it is the failure to maintain minimum essential coverage. One might argue that it regulates that failure by requiring it to be accompanied by payment of a penalty. But that failure—that abstention from commerce—is not ‘Commerce.’”

And, just for good measure:

“[T]he decision to forgo participation in an interstate market is not itself commercial activity (or indeed any activity at all) within Congress’ power to regulate.”

To wrap things up: The AHCA regulates inactivity just as much as the ACA did; it is also just as much of a mandate as the ACA was.  Instead of “coercing” healthy individuals to obtain insurance with a several-hundred-dollar-penalty, as the ACA did, the AHCA coerces them with the threat of 30% higher health insurance rates. The joint dissenters suggested this course might be permissible:  “[T]hose who did not purchase insurance could be subjected to a surcharge when they do enter the health insurance system.”  So much for not penalizing inactivity, I guess.


NB:  Chandler, unlike Blackman, had previously argued that the ACA was constitutional, and was not making a constitutional argument in his Forbes piece 

Disclosure:  As mentioned, I clerked on the U.S. Court of Appeals for the Sixth Circuit and the U.S. Supreme Court when those courts heard challenges to the ACA’s minimum-coverage requirement.  If you are curious why the ACA’s minimum-coverage requirement was perfectly constitutional then, and is perfectly constitutional now, I’d encourage you to read Justice Scalia’s concurrence in Gonzales v. Raich, Raich itself, Wickard v. Filburn, or Judge Sutton’s opinion in Thomas More Law Center v. Obama, 651 F.3d 529.) 

The Affordable Care Act Does Not Have An Inseverability Clause

11/5/20  //  In-Depth Analysis

Contrary to challengers’ claim, Congress nowhere directed the Supreme Court to strike down the entire ACA if the individual mandate is invalidated. Congress knows how to write an inseverability directive, and didn’t do it here. That, combined with Congress’s clear actions leaving the ACA intact and the settled, strong presumption in favor of severability, make this an easy case for a Court that is proud of its textualism.

Abbe R. Gluck

Yale Law School

The Real Problem with Seila

8/24/20  //  In-Depth Analysis

Seila Law LLC v. Consumer Financial Protection Bureau that tenure protection for the Director of the Consumer Financial Protection Bureau is unconstitutional. The decision’s reasoning may be more important—and worrisome—than the holding itself.

Zachary Price

U.C. Hastings College of the Law

Roberts’ Rules: How the Chief Justice Could Rein in Police Abuse of Power 

8/19/20  //  In-Depth Analysis

A theme of Chief Justice John Roberts’ opinions this past term is that courts should not employ open-ended balancing tests to protect fundamental constitutional rights. Yet there is one area of the Supreme Court’s constitutional jurisprudence that is rife with such amorphous balancing tests: policing. It is long past time for the Court to revisit this area of law.