So far the key question in the constitutional challenge against the individual mandate has been whether or not the Commerce Clause gives Congress the power to regulate inactivity. But early in his ruling, Judge Boyce Martin actually argues that the distinction between activity and inactivity doesn't matter, because "the text of the Commerce Clause does not acknowledge a constitutional distinction between activity and inactivity, and neither does the Supreme Court."
Yet elsewhere, Martin explains that the administration is attempting to justify the mandate's constitutionality under the Supreme Court's longstanding "substantial effects" doctrine. As Jacob Sullum has detailed elsewhere, there are many problems with the substantial effects doctrine. But let's ignore those problems for a moment and look at what the doctrine actually says.
As Martin himself points out, that doctrine holds that Congress can regulate "those activities having a substantial relation to interstate commerce, . . . i.e., those activities that substantially affect interstate commerce." It is a doctrine, in other words, that specifically refers to activities and only to activities. Martin acknowledges as much noting that the judicial task at hand is "to consider whether the provision falls within Congress's power to regulate activities that substantially affect interstate commerce." [Emphasis added throughout.]
Is the specific word important? To answer that question, we might refer to another passage from Martin's opinion. In declining to accept the administration's argument that the mandate is constitutional because the penalty it imposes for not purchasing insurance is merely a tax, Martin notes that Congress specifically referred to the penalty for failing to comply as a penalty rather than a tax. "Distinct words have distinct meanings," he writes. It's worth pointing out, then, that the distinct word that both Martin and the Supreme Court use to explain the substantial effects doctrine is "activities."
Perhaps this is a meaningless quibble, though. Despite his declared belief that the distinction between activity and inactivity doesn't matter, Martin goes on to argue at length that not purchasing insurance is nonetheless still a form of activity. "Far from regulating inactivity," he writes, "the provision regulates active participation in the health care market."
In his concurrence, Judge Jeffrey Sutton seems to take the activity/inactivity distinction seriously, at least at first. He writes that "the [Commerce] Clause permits the legislature to 'regulate' commerce, not to create it. Put another way, it empowers Congress to regulate economic 'activities' and 'actions,' not inaction." But despite accepting the importance of the distinction, Sutton voted to uphold the mandate anyway.
So how did both Sutton and Martin arrive at the conclusion that the non-purchase of health insurance was an activity over which Congress has regulatory authority?
According to both judges, failing to purchase health insurance is still an economic activity, and therefore subject to Congressional mandates, because the mandate simply regulates the time at which an individual will inevitably pay for health care.
Here's Martin (quotes have been stripped of legal references):
The Act considered as a whole makes clear that Congress was concerned that individuals maintain minimum coverage not as an end in itself, but because of the economic implications on the broader health care market. Virtually everyone participates in the market for health care delivery, and they finance these services by either purchasing an insurance policy or by self-insuring….Thus, set against the Act's broader statutory scheme, the minimum coverage provision reveals itself as a regulation on the activity of participating in the national market for health care delivery, and specifically the activity of self-insuring for the cost of these services.
…By requiring individuals to maintain a certain level of coverage, the minimum coverage provision regulates the financing of health care services, and specifically the practice of self-insuring for the cost of care. The activity of foregoing health insurance and attempting to cover the cost of health care needs by self-insuring is no less economic than the activity of purchasing an insurance plan. Thus, the financing of health care services, and specifically the practice of self-insuring, is economic activity.
Here's Sutton:
What then of paying for health care or insuring to pay for it? These are two sides of the same coin. Life is filled with risks, and one of them is not having the money to pay for food, shelter, transportation and health care when you need it. Unlike most of these expenses, however, the costs of health care can vary substantially from year to year. The individual can count on incurring some healthcare costs each year (e.g., an annual check-up, insulin for a diabetic) but cannot predict others (e.g., a cancer diagnosis, a serious accident). That is why most Americans manage the risk of not having the assets to pay for health care by purchasing medical insurance.
…The basic policy idea, for better or worse (and courts must assume better), is to compel individuals with the requisite income to pay now rather than later for health care. Faced with $43 billion in uncompensated care, Congress reasonably could require all covered individuals to pay for health care now so that money would be available later to pay for all care as the need arises. Call this mandate what you will—an affront to individual autonomy or an imperative of national health care—it meets the requirement of regulating activities that substantially affect interstate commerce.
The definition of economic activity here has been stretched to the point of meaninglessness. By this definition, the non-purchase of health insurance is an economic activity regardless of whether one chose to do it, regardless of whether one made other plans, regardless of whether one did, said, or thought anything—or nothing—at all. There's no action required, no intention or choice; it applies to everyone solely by virtue of their existence. It is a strange sort of activity that does not require one to do anything at all in order to participate.
