Is the health reform law constitutional

April 26, 2010
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Putting the politics aside, many constitutional law experts have said a month-old challenge to the nation’s first health reform legislation in decades doesn’t have a legal leg to stand on. A local law professor agreed with that stance and said the suit likely won’t make it to the Supreme Court.

Florida Attorney General Bill McCollum filed a lawsuit shortly after President Barack Obama signed the health insurance reform bill into law March 23. McCollum, who filed the suit in U.S. District Court for the Northern District of Florida, said the new law was unconstitutional. So far, 13 of the 49 other state attorney generals have joined the lawsuit — including Michigan Attorney General Mike Cox.

“Never before in our history have you had to buy something as the price of citizenship. This is an unprecedented overreach by Congress and the president. There are limits to what Congress can force the individual and the state to do, and this bill exceeds those limits,” said Cox.

Devin Schindler, who teaches constitutional law and health care regulation at Thomas Cooley Law School in Grand Rapids, said McCollum’s suit is based on two claims. One, the 10th Amendment to the U.S. Constitution restricts Congress from having the power to force states to essentially run a federal program. Two, Congress doesn’t have the intrinsic authority to force individuals to buy health insurance from private sources.

As for Congress, Schindler said the Constitution gives it two basic powers that play a role in the suit: to tax and spend for the general welfare and to regulate interstate commerce. He said the courts have interpreted that latter power as allowing Congress to regulate any activity that has a “substantial effect on the amount” of commerce between the states.

Contrary to McCollum’s first claim, Schindler said Congress isn’t insisting that states run a federal program. He said what Congress actually does is use its constitutional tax- and-spending power to provide funding to the states for, say, a health insurance program like Medicaid. States, though, must follow the criteria Congress includes in a program to receive those dollars. The new insurance reform law includes federal Medicaid money for the states and subsidies for middle- and lower-income residents of the states to buy insurance.

“Congress says we have given you a ton of money for health care. If you want to continue to receive this health care money, you must, say, increase the number of people covered by Medicaid to 133 percent of the poverty level, set up insurance exchanges, and those kind of things. If you don’t want to do those things, fine, but you don’t get the money,” said Schindler, who was a partner at Warner Norcross & Judd from 1986 to 2007.

“Congress can do that. I call it the golden rule of health care: Whoever has the gold makes the rules. And Congress has got the gold,” he added. “There are a whole slew of cases that talk about if you’re taking Federal government money, you have to abide by their rules. So I think that’s the first problem with (the McCollum) argument.”

In his lawsuit, McCollum wrote, “The states cannot afford the exorbitant and unfunded costs to participate under the Act but have no choice other than to participate.”

“That’s not true. They can decide not to offer Medicaid anymore,” said Schindler of a choice every state has.

“There is something to their argument, though,” he added. “They really don’t have a realistic choice. They have to provide health care as a matter of politics, or the Federal government will take over.”

As for McCollum’s second claim about Congress forcing individuals to buy health insurance or pay a “penalty” to the Internal Revenue Service, Schindler noted that the penalty is actually a “tax,” and Congress has the power to tax.

“Congress does this all the time. If I choose not to donate to charities, I get taxed for it — and I can give you 20 other examples of that,” said Schindler.

In effect, what Congress has done with the reform law is to offer those with coverage a tax credit for having insurance and taxing those who don’t — a move that is similar to allowing personal deductions for charitable contributions.

The lawsuit’s second claim appears to fall even further when the Commerce Clause of the Constitution, which gives Congress the power to regulate interstate business, is included in the argument, because the Supreme Court has consistently upheld those congressional powers for decades when it felt the amount of interstate commerce would be negatively affected.

“The majority of this case is based on tax and spend. Commerce is sort of the secondary argument here. I don’t see the Court reversing (the heath reform law). I just don’t see it,” said Schindler, who added that he didn’t think the case would make it to the Supreme Court.

But Schindler said if the courts do side with McCollum in his suit and see the law as an unwarranted financial drain on the states, that decision could lead to major changes in our society.

“It will have a huge potential impact, including on things like the civil rights law, the Title VII, no discrimination at hotels and no discrimination at restaurants and all that. Those laws are based on commerce power and are not based on the 14th Amendment. Commerce power can force an Atlanta hotel to allow an African-American because what happens at that Atlanta hotel has a substantial effect on interstate commerce,” said Schindler.

“The point is, if the Court were to say that commerce power doesn’t reach this far, there are a whole lot of programs like that, that are based on commerce power that have a potential to be in trouble.”

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