The Libertarian Challenge to Obamacare

How the constitutional challenge to Obamacare pitted liberty against power.


The challenge to Obamacare was, at its heart, a libertarian challenge. The legal arguments were fashioned by prominent libertarians, such as Georgetown law professor Randy Barnett. The law being attacked was one libertarians opposed for decades on policy and economic grounds. And, the notion of mandated health insurance is inherently anti-libertarian. But, this was not only a philosophical argument, or one of policy. As the Supreme Court's opinion demonstrated, these libertarian principles resonated strongly in the structural protections of our Constitution, which stood as bulwarks against two of Obamacare's biggest increases in federal power: the individual mandate and the Medicaid expansion.

Obamacare's individual mandate, in an effort to ensure that health care was more affordable, requires that most Americans purchase health insurance. This provision offends libertarian principles of individual autonomy and free choice. As early as July 1993, Ed Crane, president of the Cato Institute, objected to the individual mandate, which "flies in the face of the American heritage of individual liberty and individual responsibility." Further, it aggrandizes a potentially-limitless power in the hands of the federal government–the ability to force people to do something that they do not want to do. The notion that the federal government and the states have separate spheres of autonomy ensures that those closest to the people can respond to their needs more appropriately.

A less discussed, but equally bold aspect of Obamacare was the Medicaid expansion. Under this statute, in order for states to maintain the billions of dollars in Medicaid funding they already receive, they must agree to spend billions of dollars insuring many new patients above the poverty line. As the law was written, states were not free to reject the additional funding, without losing their earlier funding. This law disrupts the balance between the federal government and the states, and distorts our federalist system. The Court found that states which agreed to early, limited expansions into their sovereignty only had a false choice of whether to accept future spending, with many more strings attached. Rather than viewing this law as a choice, of whether states can, or cannot receive new funding, libertarians would view this law as a coercion of the states.

What is perhaps most striking about the resolution of the Obamacare case in National Federation of Independent Business v. Sebelius, is a majority of the Supreme Court recognized these libertarian principles, as embodied in the structural protections of our Constitution. First, for the individual mandate, the Constitution's system of enumerated powers only allows the federal government to do that which the Constitution gives it the power to do. Congress has the power to regulate commercial activities, and make all laws that are necessary and proper to effecting that aim. But, five justices held that the Obamacare mandate was not regulating any commercial activity—after all, it was a decision not to buy health insurance. Further, while the mandate may have been necessary to implementing Obamacare, it was not proper in the manner in which it was designed. Further, seven justices (including Justices Stephen Breyer and Elena Kagan) held that offering the new Medicaid funding, with many strings attached, was not truly a choice, but in fact a coercion of the states. This expansion altered the vertical federalism vision of our state and federal governments, and went too far.

There is no doubt that Obamacare offended many of the most agreed-upon libertarian sensibilities. Seizing on this point, scholars and pundits critical of the constitutional challenge to Obamacare argued that this was not really a constitutional argument at all. Rather, it was a purely liberty-based challenge (in legal lingo, a violation of the Constitution's guarantee of due process of law). Legal positions, which were ostensibly framed in terms of Congress's abilities to regulate interstate commerce, or to tax and spend, were really efforts to enforce a libertarian vision of the Constitution.

These criticisms reflect a very common divide in constitutional thought that is inherent even in the way constitutional law is taught in law schools—that there is a bold gap between the Constitution's guarantees of rights and liberties on the one hand, and its structural protections on the other. In most law school, these topics are divided into totally separate classes.

Students of constitutional law often focus on the Due Process Clauses of the Fifth and 14th Amendments as the Constitution's main fount of freedom, apart from enumerated provisions in the Bill of Rights (such as freedom of speech). Thus, the criticism goes, arguments that the individual mandate violates individual freedom must come from injecting a libertarian philosophy into the Constitution, rather than any textual provision within the charter itself.

But, in fact, it is not only the Due Process Clause that protects individual liberty. The framers of the Constitution crafted the structural protections of our Constitution as bulwarks of freedom. Remember, these provisions were written before the Bill of Rights was even ratified. In the period between 1789, when the Constitution was ratified, and 1791, when the Bill of Rights was ratified, what limits existed on the power of the federal government?

The idea that Congress can only do certain things, and that there are limits on how Congress can act with respect to the states, is just as essential to protecting freedom as guarantees of free exercise of religion or banning unreasonable searches and seizures. This structure is key. As Justice Kennedy repeated twice while delivering his opinion in NFIB v. Sebelius, "Structure means liberty. Structure means liberty" (for this point, Chief Justice Roberts was on the same page, so it likely commands five votes).

The libertarian principles evident in the Constitution became apparent when a law, such as Obamacare crashes into the Constitution's structural foundation. After the Supreme Court's opinion in NFIB v. Sebelius, this dichotomy between structure and rights makes less sense. Instead, structure and rights, according to the Court, are not isolated spigots that drip weak limits on the government, but instead are an intricately woven framework aimed at protecting individual liberty.

Of course, there were four dissenting votes in NFIB, who articulated a polar opposite vision of the Constitution's approach to protecting liberty. Under this approach, the federal government is charged with ensuring that people have certain social securities, such as affordable health insurance, so that they can enjoy their pursuit of happiness. In his recent speech on the 50th Anniversary of the March of Washington, President Barack Obama remarked that "liberty is linked to one's livelihood, that the pursuit of happiness requires the dignity of work, the skills to find work, decent pay, some measure of material security." And it is the federal government to ensure that those livelihoods are available.

These two competing conceptions of liberty, between positive and negative views of freedom, reflect a more accurate dichotomy in our constitutional order. The structural provisions of the Constitution, which limit what the federal government can do, stands in stark contrast with the positive vision of freedom, which requires the federal government to take such action.

Going forward, meandering between these two poles of security—that of the individual and that of the collective—will define the congruence between the Constitution and libertarianism.