Requiring Individuals to Obtain Health Insurance: A Constitutional Analysis

Jennifer Staman
Legislative Attorney

Cynthia Brougher
Legislative Attorney

Edward C. Liu
Attorney Adviser (General)

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 may be subject to a monetary penalty, administered through the tax code. Although the federal government provides health coverage for 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. While some cases are currently pending, two appellate courts’ decisions on the constitutionality of the requirement have 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 relief from certain provisions of PPACA. On August 12, 2011, 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. Other courts, such as the Fourth Circuit in Virginia v. Sebelius and Liberty University v. Geithner, dismissed these challenges, not based on the merits of the case, but for procedural reasons. Several petitions for Supreme Court review were filed, and on November 14, 2011, the Supreme Court agreed to hear the appeal in the Florida case. Oral arguments in this case are expected to take place in March 2012.


Date of Report: November 15, 2011
Number of Pages: 36
Order Number: R40725
Price: $29.95

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