Update: CNN jumped the gun and said the individual mandate was ruled unconstitutional. After looking at it again, they realized that the entire Obamacare law was upheld by the Supreme Court. The Court basically said that, despite the muddy language in the Affordable Care Act, Congress could require individuals to purchase health insurance as a tax.
On June 28, 2012, the United States Supreme Court handed down its long-awaited decision on Obamacare. The Court said that the individual insurance mandate is unconstitutional. The following is a very general, watered-down legal analysis to make it as simple as possible for people without a law degree to understand. I will only be providing an analysis of the insurance mandate here, which is the part of Obamacare (the Affordable Care For Americans Act) that required all individuals to buy health insurance.
For starters, you need to understand the basics of the Commerce Clause. In short, it allows Congress to pass laws dealing with interstate commerce. The federal government has limited powers over U.S. citizens, with the states having all other power. So Congress uses the Commerce Clause as one source of its legal authority to pass legislation.
In the case of Obamacare, Congress and President Obama relied on the Commerce Clause as its source of legal authority to create the insurance mandate.
Congress CAN regulate insurance in general through the Commerce Clause because it DOES substantially affect interstate commerce. This cannot be denied, and Obama is correct to this extent.
The problem is the way the insurance mandate seeks to use the Commerce Clause. It is unprecedented in the respect that it requires citizens to buy medical insurance even if they don’t want it and choose not to use it. In essence, just by being alive, Obamacare seeks to force you to buy something. This has never been done by the federal government except through the imposition of normal taxes.
Obama tried to argue that the insurance mandate is a tax, not a “fine.” But it clearly is a fine under the language of the Affordable Care Act. Thus, the insurance mandate is a novel concept in that it requires you to be a customer of something even if you choose not to be a customer. The Supreme Court has now ruled that the Obamacare insurance mandate is unconstitutional.
Many people have tried to compare the Obamacare insurance mandate to things like car insurance. This is completely different because you ARE CHOOSING to drive on the public roads. Having made that choice, the government can require you to do buy insurance to help pay for accidents. These concepts are admittedly close to each other but clearly different at the same time. Once you choose to avail yourself of the public roads, then the government can require you to do what is reasonably necessary to maintain that public service.
The Obama administration does have a decent argument. It goes along the lines that everyone eventually gets sick and has to use medical services. But this ignores many facts. First of all, some people do die before ever going to the hospital. Second, some people only visit private doctors and pay with cash if they do go.
There is a way to force all citizens to contribute to medical care. The way to do that is through taxes, not a fine. These are not just semantics. For example, if a person makes a million dollars a year, he contributes a different amount to FICA tax than a citizen who makes only $25,000 per year. That is how taxes work, and the U.S. Congress and the President can do that all day long every day if they choose to have a tax-based mandatory system. But the difference is people who make no money would generally not pay or pay a small amount. And people who make a lot of money could pay more.
So the “power source” that Congress uses to pass a law is often the difference in it being constitutional and unconstitutional. In this case, Obamacare was poorly crafted legislation that used the Commerce Clause – the wrong power source. So the insurance mandate is unconstitutional.
If President Obama wants to reform health care with these kinds of Mickey Mouse plans, then he needs legislation that uses the Tax and Spend Clause. That will likely make it a constitutional exercise of U.S. Congressional power.