Jennifer Staman
Legislative Attorney
Cynthia Brougher
Legislative Attorney
Edward C. Liu
Legislative Attorney
Erika K. Lunder
Legislative Attorney
Kenneth R. Thomas
Legislative Attorney
As part of the Patient Protection and Affordable Care Act, P.L. 111-148, Congress enacted an “individual responsibility requirement,” a provision compelling certain individuals to have a minimum level of health insurance (i.e., an “individual mandate”). Individuals who fail to do so are subject to a monetary penalty, administered through the tax code. Although the federal government provides health coverage for many individuals through federal programs such as Medicare, it had never before required individuals to purchase health insurance. This report analyzes certain constitutional issues raised by compelling individuals to purchase health insurance. It addresses the authority of Congress to pass a law of this nature under its taxing power or its power to regulate interstate commerce. With regard to the taxing power, the requirement to purchase health insurance might be construed as a tax and upheld so long as it was found to comply with the constitutional restrictions imposed on direct and indirect taxes. In such case, a court might favorably compare it to other examples of where Congress has used its taxing authority to create financial incentives for the purchase of health insurance. On the other hand, opponents of the individual responsibility requirement may note that it differs in that it creates a financial disincentive for failing to obtain health insurance. As it is imposed conditionally and may be avoided by compliance with regulations set out in the statute, some might argue that the requirement may be more accurately described as a penalty and, therefore, the taxing power alone might not provide Congress the constitutional authority to support this provision.
In evaluating under the individual responsibility requirement under the Commerce Clause, a court may rely on Supreme Court precedent and look to several factors to determine whether the individual responsibility requirement passes constitutional muster. Among other things, a court may evaluate whether the requirement is a regulation of economic activity. One could argue that the requirement to purchase health insurance is economic in nature because it requires an individual to be a consumer in the health insurance market. On the other hand, it may be argued that the individual responsibility requirement goes beyond the bounds of the clause, because while regulation of the health insurance industry or the health care system is economic activity, regulating a choice to purchase health insurance is not. In addition, a court may look whether the requirement plays an essential role in a larger regulatory scheme. A reviewing court could consider whether the absence of this requirement would undercut the regulation of the health care system as a whole.
It has been questioned whether the requirement to have health insurance might violate certain protections found under the U.S. Constitution. This report discusses how a court might evaluate a challenge to the individual responsibility requirement on Fifth Amendment due process, takings clause, or equal protection grounds, as well as under the Tenth Amendment. This report also addresses whether the exceptions to the individual responsibility requirement to purchase health insurance satisfy First Amendment freedom of religion protections.
Among the legal challenges to the individual responsibility requirement, attorneys general in 20 states have brought an action against the Secretaries of Health and Human Services, Treasury, and Labor, seeking declaratory and injunctive relief from certain requirements of PPACA. The Virginia attorney general also filed suit based on a Virginia law stating that residents are not required to purchase health insurance. Two federal district courts have held that at least some of the plaintiffs’ claims against the individual mandate should not be dismissed, while a third has upheld the individual mandate as a constitutional exercise of the Commerce Clause.
Date of Report: October 15, 2010
Number of Pages: 30
Order Number: R40725
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Legislative Attorney
Cynthia Brougher
Legislative Attorney
Edward C. Liu
Legislative Attorney
Erika K. Lunder
Legislative Attorney
Kenneth R. Thomas
Legislative Attorney
As part of the Patient Protection and Affordable Care Act, P.L. 111-148, Congress enacted an “individual responsibility requirement,” a provision compelling certain individuals to have a minimum level of health insurance (i.e., an “individual mandate”). Individuals who fail to do so are subject to a monetary penalty, administered through the tax code. Although the federal government provides health coverage for many individuals through federal programs such as Medicare, it had never before required individuals to purchase health insurance. This report analyzes certain constitutional issues raised by compelling individuals to purchase health insurance. It addresses the authority of Congress to pass a law of this nature under its taxing power or its power to regulate interstate commerce. With regard to the taxing power, the requirement to purchase health insurance might be construed as a tax and upheld so long as it was found to comply with the constitutional restrictions imposed on direct and indirect taxes. In such case, a court might favorably compare it to other examples of where Congress has used its taxing authority to create financial incentives for the purchase of health insurance. On the other hand, opponents of the individual responsibility requirement may note that it differs in that it creates a financial disincentive for failing to obtain health insurance. As it is imposed conditionally and may be avoided by compliance with regulations set out in the statute, some might argue that the requirement may be more accurately described as a penalty and, therefore, the taxing power alone might not provide Congress the constitutional authority to support this provision.
In evaluating under the individual responsibility requirement under the Commerce Clause, a court may rely on Supreme Court precedent and look to several factors to determine whether the individual responsibility requirement passes constitutional muster. Among other things, a court may evaluate whether the requirement is a regulation of economic activity. One could argue that the requirement to purchase health insurance is economic in nature because it requires an individual to be a consumer in the health insurance market. On the other hand, it may be argued that the individual responsibility requirement goes beyond the bounds of the clause, because while regulation of the health insurance industry or the health care system is economic activity, regulating a choice to purchase health insurance is not. In addition, a court may look whether the requirement plays an essential role in a larger regulatory scheme. A reviewing court could consider whether the absence of this requirement would undercut the regulation of the health care system as a whole.
It has been questioned whether the requirement to have health insurance might violate certain protections found under the U.S. Constitution. This report discusses how a court might evaluate a challenge to the individual responsibility requirement on Fifth Amendment due process, takings clause, or equal protection grounds, as well as under the Tenth Amendment. This report also addresses whether the exceptions to the individual responsibility requirement to purchase health insurance satisfy First Amendment freedom of religion protections.
Among the legal challenges to the individual responsibility requirement, attorneys general in 20 states have brought an action against the Secretaries of Health and Human Services, Treasury, and Labor, seeking declaratory and injunctive relief from certain requirements of PPACA. The Virginia attorney general also filed suit based on a Virginia law stating that residents are not required to purchase health insurance. Two federal district courts have held that at least some of the plaintiffs’ claims against the individual mandate should not be dismissed, while a third has upheld the individual mandate as a constitutional exercise of the Commerce Clause.
Date of Report: October 15, 2010
Number of Pages: 30
Order Number: R40725
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Posts
