Constitutional challenges to
healthcare reform will fail because Congress has both the right
to regulate interstate commerce and to tax those who refuse to
Now that the new healthcare bills have become law, the
political is turning legal. Immediately after President Obama
signed the first healthcare reform bill into law, more than 10
state attorneys general (and counting) filed lawsuits asserting
that the new law is unconstitutional. I know many of you are
pinning your hopes on the success of these challenges. My
I do not believe that any of the arguments advanced so far
will bear fruit, at least not in any credible court of law.
The primary argument is that requiring businesses and
individuals to purchase health insurance is not within
Congress’s power to regulate interstate commerce. The
premise is that Congress may legislate only in areas allocated
to it under the Constitution; all other legislative powers are
reserved to the states. All would agree that this is a correct
The proponents of the unconstitutionality argument then
assert that mandating insurance coverage is not tantamount to
regulating “commerce among the states” because
these activities do not “substantially affect interstate
commerce.” In evaluating this claim, two things must be
kept in mind.
First, since the mid-1930s, the Supreme Court has taken an
expansive view of the activities that may be regulated by
Congress because they “substantially affect interstate
commerce.” Two examples: In 2005 the court upheld
congressional restrictions on the growth and sale of medical
marijuana for intrastate use (this was consistent with a 1942
case allowing Congress to regulate the personal use of
homegrown wheat); and in 1964 the court upheld congressional
rules imposed on hotels and inns that catered only to
Second, the sole exceptions to this now 60-year-old line of
authority are two fairly recent cases. In 1995, in U.S. v. Lopez, the court struck down a
congressional statute criminalizing the possession of a handgun
in a school, finding that any relationship between such conduct
and the regulation of interstate commerce was too incidental to
constitute a permissible regulation of interstate commerce. For
the same reasons, in 2000 the court also struck down
congressional civil penalties imposed under the Violence
Against Women Act.
It is fitting that Virginia filed the first constitutional
challenge to the healthcare law because in an 1869 case known
as Paul v. Virginia, the
Supreme Court found that insurance was not
“commerce” and, thus, Congress had no authority to
regulate it. Unfortunately for the current Virginia attorney
general, in 1944 the Supreme Court overruled Paul v. Virginia in the now infamous South-Eastern Underwriters case.
“Perhaps no modern commercial enterprise directly affects
so many persons in all walks of life as does the insurance
business,” the court noted in South-Eastern Underwriters.
“Insurance touches the home, the family and the
occupation or the business of almost every person in the United
At some level, that’s the point here, isn’t it?
That healthcare coverage—and, more precisely, the
financing of healthcare coverage—is such a big part of
our economic system that it must be evaluated as a national
concern. That point will be difficult to overcome, especially
given that the government need not prove the point. It needs
only to demonstrate that health insurance does bear on
interstate commerce and Congress is therefore within its rights
to regulate it.
Opponents will argue that the mandates are impermissible and
unfair because they impose a purchase mandate on individuals
and businesses. But that argument is factually incorrect. If an
individual chooses not to buy insurance, he or she is subject
to a tax; if a large business chooses not to provide health
coverage to its employees, it is subject to a tax.
Congress’s power to levy taxes is broad and relatively
unfettered, and the Court has repeatedly upheld both the Social
Security Act and the Medicare Act as being permissible
exercises of that taxation power.
Those wanting to strike a blow against the new law might
take comfort in more surgical challenges. For example, under
the law, advisory boards that are not presidentially appointed
will determine whether a “preventive service” must
be offered under the minimum benefits plans. It is
constitutionally impermissible for such boards to exercise such
federal power. Although this part of the law has received scant
public attention, I believe it will become a flashpoint,
especially after the Supreme Court issues its opinion
challenging the authority of the Public Company Accounting
Oversight Board, which is expected in the next few months.
Sinder, a partner at Steptoe & Johnson, is CIAB General
Counsel. The Council is 6-0 in constitutional cases that Sinder
has brought on its behalf.