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The New Health Dialogue

A Blog from New America's Health Policy Program

HEALTH REFORM: Within the Four Corners of the Constitution

Published:  September 3, 2010
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This continues our series of posts on the various constitutional challenges to the individual mandate, by Tony Cardona, an attorney who is doing some work with New America's health policy program. Read his post about federal authority and taxation here.

“The Congress shall have Power . . . To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution . . .” (U.S. Const., Art. 1, sec. 8, cl. 18)

In their required Contracts courses, first year law students learn “the four corners rule.” It simply means that the language inside the four corners of the contracted document will be the primary source for resolving a dispute. When our Founding Fathers drafted the Constitution, they created a contract with every generation of Americans. The Supreme Court, the interpreters of this contract, look within the four corners of the Constitution to decides whether a federal law -- such as the individual mandate to purchase health insurance -- exceeds the contract’s scope.  A federal action -- such as regulating the health insurance market -- doesn’t have to be mentioned specifically in the Constitution, but it does have to relate to a power enumerated in the Constitution.

For example, wheat grown in excess of a federal quota can be taxed since Congress under the Commerce Clause has the constitutional power to control activities affecting the interstate wheat market. Congress can also regulate a local activity that is not commercial and does not directly affect interstate commerce. In these cases, the power does not come from the Commerce Clause but the Necessary and Proper Clause cited above. This post will explain that power. Keep in mind though, the power is largely a legal technicality. At the end of the day, if the Commerce Clause or General Welfare Clause arguments don’t work to defend the mandate, this one won’t on its own either.

To understand just how generous an offer this “Necessary and Proper” clause contains, think of the parent-teenager relationship. The Framers are the parents, Congress, the teenager. The parents just purchased a new car for their teen. With this clause, they are then giving their excited youth the credit card with instructions to use it not only for gas and an oil change, but anything “necessary and proper” for one of the car’s numerous functions. The teenager’s eyes get big; a convenient parking space, an iPod, and new sunglasses quickly become necessary and proper.

How this limitless credit card extends to the Commerce Clause is a little arduous legally, but pretty straight forward practically. First, in order for the Necessary and Proper Clause to work, the quintessential case McCulloch v. Maryland, states that, “[the] end must be legitimate, and within the scope of the Constitution, all the means which are appropriate, which are plainly adapted to that end, and which are not prohibited, may constitutionally be employed to carry it into effect.” The Supreme Court later ruled, in Perez v. UnitedStates, that Congress has the constitutional authority to control interstate commerce under three categories: (1) the channels of interstate commerce; (2) the instrumentalities of interstate commerce, and persons or things in interstate commerce; and (3) activities that substantially affect interstate commerce.  It’s that third one -- not necessarily a commercial activity and most likely local -- that is most relevant to the health mandate debate and the source of Necessary and Proper Clause.

In the current lawsuit by the Commonwealth of Virginia challenging the individual mandate, the Obama Administration argues that the mandate “is a reasonable means to accomplish Congress’s goal of ensuring access to affordable coverage for all Americans. It is therefore necessary and proper to the valid exercise of Congress’ Commerce Clause power...” Under the minimum coverage provision, all able citizens must purchase health insurance or pay a penalty tax. The Administration supports this mandate, stating that “the minimum coverage provision is an ‘essential’ part of the Act’s larger regulatory scheme for the interstate health care market.” The Administration is arguing that without the individual mandate, reform’s goal of regulating the interstate market for health insurance would be undermined. The new rules, such as requiring insurers to cover people with pre-existing conditions, would only send costs of insurance skyrocketing if people could forgo insurance until they needed it. In other words, mandating that individuals purchase health insurance is necessary and proper for that larger scheme to function.

As I mentioned initially, the Necessary and Proper Clause is dependent on an existing constitutional power. The Administration’s argument that the individual mandate is necessary and proper succeeds only if it can demonstrate that the minimum coverage provision is a valid use of the Commerce Clause power. If a Court determines that Congress has no constitutional authority under the Commerce Clause (or General Welfare Clause) to impose the individual mandate, then logically, any effort at enforcing the individual mandate under the Necessary and Proper Clause would fail. Subsequently, the Commonwealth of Virginia’s argument against the Necessary and Proper Clause is part of its challenge that the Administration’s use of the commerce and taxing powers is unconstitutional -- if the ends are not “within the scope of the Constitution,” then the means are prohibited.   

The individual mandate does not begin until 2014. Until then, the challenges against the mandate will continue and it will be interesting to see what each Court decides before it possibly ends up before the Supreme Court. Though the law swings slightly in the Administration’s favor, they have a long road ahead and will need both hands on the wheel.

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