The Problem With the “Inactvity/Activity” Excuse for Striking Down the Mandate

As others have noted, Henry Hudson’s opinion holding that the mandate provision of the ACA was unconstitutional contained the bizarre argument that “[i]f a person’s decision not to purchase health insurance at a particular point in time does not constitute the type of economic activity subject to regulation under the Commerce Clause, then logically an attempt to enforce such provision under the Necessary and Proper Clause is equally offensive to the Constitution.” This not only contradicts nearly 200 years of precedent but is illogical on its face — if the necessary and proper clause merely gives Congress the power to do things it is authorized to do in other provisions, what is its purpose? Jason Mazzone argues that this argument becomes more coherent if you consider Scalia’s arguments about the importance of the necessary and proper clause in his Raich concurrence, which “uses the word [“activity”] 42 times.” While this makes sense of Hudson’s argument strategically, I still don’t think it makes any sense as an interpretation of the necessary and proper clause. If a regulation is necessary to a broader regulatory scheme, what difference does it make whether it is “activity” or “inactivity” that is being regulated?

Perhaps more importantly, it’s hard to see how the “activity/inactivity” distinction makes sense even when looking at the commerce clause alone. This Mark Tushnet post is brilliant:

Congress, according to Judge Hudson, has the power to regulate economic activity but not economic inactivity, that is, a failure to participate in some market such as the insurance market. This distinction seems to me unsound in principle but, more important, inconsistent with the governing precedents. The primary one is Wickard v. Filburn, which is usually described as holding that Congress has the power to regulate economic activities that, taken in themselves, have no substantial effect on interstate commerce but when aggregated do have such an impact. The economic activity in Wickard was the consumption on a person’s own farm of wheat grown on that farm.

What the farmer did, though, could just as easily — indeed, probably more easily — be described as a failure to purchase wheat in the general market. (Justice Jackson’s opinion made the point in this way: “The effect of the statute before us is to restrict the amount which may be produced for market and the extent, as well, to which one may forestall resort to the market by producing to meet his own needs” (emphasis added). Those who do not purchase health-care insurance “forestall resort to the market” by paying the full out-of-pocket costs of their medical care when they incur those costs (or at least assert that they are willing to do so) or by relying on charity to cover the costs (although I would think that in principle the person should forgo that portion of the charity care attributable to the public decision to grant tax-exempt status to charitable health care — or at least that Congress could require that the person do so).

To expand on the last point a bit, the “activity/inactivity” distinction is particularly meaningless when considered in the context of actually existing health care policy. Perhaps if we lived in a libertarian dystopia in which people without insurance were denied access to emergency rooms, the distinction would be meaningful. But given the safety net that actually exists, refusing to buy insurance is economic activity in all most the most formal sense.   It just defers economic activity to a later time and places the burden on the taxpayers, and at the same time affects the “activity” of the insurance market immediately.   Either way, if the mandate is integral to a broader regulatory scheme — and it obviously is — I think it is quite clearly constitutional under existing precedents.