PERSPECTIVE: THE CONSTITUTIONALITY OF THE INDIVIDUAL MANDATE

The Patient Protection and Affordable Care Act (ACA) was designed to increase access to health care. The main objectives of the ACA are to decrease the cost of health care by expanding the scope of Medicaid and providing access to affordable health insurance. The law has been met with much resistance and challenged in the Supreme Court as evidenced in National Federation of Independent Business v. Sebelius. The individual mandate of the ACA is currently being challenged. This provision establishes a requirement to maintain minimum essential coverage by purchasing health insurance if not provided by another health plan.

In NFIB v. Sebelius, the majority opinion of the Supreme Court, delivered by Chief Justice Roberts, concluded that the individual mandate imposed by the ACA was not a valid exercise of Congress’ Commerce Power. Article I, §8 of the Constitution grants Congress the power to regulate commerce. The Court reasoned the power to regulate commerce presupposes existing commercial activity to be regulated; “[t]he individual mandate, however, 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 [1].”

The Supreme Court in NFIB v. Sebelius determined the Commerce power was not a proper exercise of Congress’s power to enforce the individual mandate. The Court further analyzed the shared responsibility penalty payment under Congress’ power to “lay and collect Taxes” to construe every reasonable interpretation of the government’s enactment of this provision. The Court reasoned that in applying the Taxing Clause, the penalty payment would be enforceable because “such analysis suggests that the shared responsibility may for constitutional purposes be considered a tax [2].”

Congress has the power to raise revenue for the general welfare according to the Taxing and Spending Clause. A tax by the federal government is invalid if used to solely punish or regulate the conduct of those subject to the tax. Under the General Welfare Clause, Congress may enact regulations to modify one’s conduct if the tax intended to raise revenue or the effect of the tax results in revenue being raised. The government describes the payment as a penalty, a form of punishment, assessed for not complying with the individual mandate, not as a means of raising revenue. As such, this analysis would suggest against classifying the payment as a tax. Notwithstanding the intent of Congress, the Court reasoned the effect results in revenue being raised, thus supporting the application of the penalty payment by way of the Taxing Clause.

A recent Circuit Court case, Texas v U.S., addressed whether the individual mandate, §5000A(a), as defined by the ACA and argued in NFIB v. Sebelius is constitutional? As of January 1, 2019, the shared responsibility penalty payment for noncompliance with the individual mandate has been reduced to zero. The plaintiff argues the individual mandate can no longer be supported by Congress’s Taxing Power and because it is still impermissible under the Commerce Clause, the mandate is unconstitutional. The plaintiff further argued the individual mandate is inseverable from the ACA, making the ACA unconstitutional. In analyzing this issue this court made a noteworthy distinction between the individual mandate as described in §5000A(a) of the ACA and the penalty to be applied as a ‘tax’ for noncompliance of the mandate as described in 5000A(b) of the ACA. This court argues Congress intended the mandate and penalty to be distinct “just as the 2010 Congress subjected some individuals to the individual mandate but no shared responsibility payment, the 2017 Congress subjected all applicable individuals to the individual mandate but no shared responsibility payment. Congress never intended the two things to be one. [3].”

This court reasons that because the individual mandate no longer ‘triggers a tax’ the provision can no longer be reinforced under Congress’ Tax Power, thus unconstitutional. Notwithstanding this conclusion by this court, the individual mandate is still an applicable provision of the ACA. Whether the individual mandate as interpreted in Texas v U.S is unconstitutional is not binding by the decision of this court, but will ultimately be argued and decided by the Supreme Court.

[1] National Federation of Independent Business v. Sebelius, 567 U.S. (2012).

[2] Id.

[3] Texas v. United States, No. 4:18-cf-00167-O (5^th Cir. 2019).