Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis

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 (PPACA), P.L. 111-148, as amended, Congress enacted a “minimum essential coverage 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. On the other hand, opponents of the minimum essential coverage requirement may argue that since it is imposed conditionally and may be avoided by compliance with regulations set out in the statute, that the requirement may be more accurately described as a penalty. If so, the taxing power alone might not provide Congress the constitutional authority to support this provision.

In evaluating under the minimum essential coverage requirement under the Commerce Clause, a court may rely on Supreme Court precedent and look to several factors to determine whether the minimum essential coverage requirement passes constitutional muster. Among many 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 regulates how an individual participates in the health care market, through insurance or otherwise. On the other hand, it may be argued that the minimum essential coverage 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.

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 minimum essential coverage 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 minimum essential coverage requirement to purchase health insurance satisfy First Amendment freedom of religion protections.

Several lawsuits challenge the minimum essential coverage requirement on constitutional grounds. So far, two appellate courts have rendered decisions on the constitutionality of the requirement and reached opposite holdings. In Florida v. HHS, attorneys general and governors in 26 states as well as others brought an action against the Secretaries of Health and Human Services, Treasury, and Labor, seeking declaratory and injunctive relief from certain provisions of PPACA. On August 12, 2011, the Court of Appeals for the Eleventh Circuit held that the minimum essential coverage requirement is unconstitutional. Conversely, the Sixth Circuit in Thomas More Law Center v. Obama upheld the minimum essential coverage requirement as a constitutional exercise of the Commerce Clause. District courts have also been divided on this issue, and appeals to circuit courts are currently pending. It is widely expected that one or more of these cases will be heard by the Supreme Court, perhaps during its 2011-2012 term.


Date of Report: August 26, 2011
Number of Pages: 35
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.