The Political Origins of Health Care Reform's Constitutional Problems

In the midst of the Supreme Court’s consideration of the constitutionality of the individual mandate to purchase health insurance within the Affordable Care Act, it is worth pausing to remember why the mandate was part of the president’s health care reform legislation in the first place.

There was, of course, widespread support for “health care reform” in the early months of the Obama administration. Yet, Democrats understood that a Bill Clinton style single-payer plan would have been a nonstarter politically. Likewise, an outright expansion of Medicare and Medicaid to cover the uninsured and uninsureable would have required substantial new taxes up front to fund new direct public expenditures. The “individual mandate” solved both of the problems. 

First, a mandate to purchase insurance would nominally allow many people to keep private insurance while providing a pretense for increasing government intervention in the health care market (including eventually offering a “public option” health plan to compete with private insurers) and, over the long run, breaking down political resistance to a single-payer system. This is what led Jacob Hacker to (approvingly) call the individual mandate a “Trojan Horse” for a single-payer system.

Second, the individual mandate to purchase insurance combined with a mandate for insurers to sell coverage to all comers allowed the government to regulate universal coverage into being without a direct public expenditure. Rather than directly paying for health care for the uninsured through Medicare, Medicaid, or some other public program and financing the program with new taxes or borrowing, the twin mandates promised to hide the cost of insuring the uninsured in everyone else’s health insurance premiums (including the premiums of those forced into the health insurance market by the mandate). This helped the ACA’s supporters create the impression that the law was less costly than it really was since much of its expense would never show up on the government’s books.

The law’s advocates, however, apparently paid little attention to the constitutional niceties of the mandate scheme. The Supreme Court may yet uphold the mandate. However, Congress could have (almost) unquestionably adopted alternative schemes for “universal health insurance” that relied directly on Congress’s power to tax and spend for the general welfare. Instead, Congress gambled on a much more dubious plan involving a claim on its Commerce Clause powers in order to obscure the nature and consequences of “reforming” health care. This cynical political choice left the door open for the Supreme Court to intervene, jeopardizing the whole scheme.