The mandate falls under taxation and general welfare powers

An insurance mandate would be enforced through income tax laws, so even if a simple mandate were not a valid 'regulation,' it still could fall easily within Congress’s plenary power to tax income. For instance, anyone purchasing insurance could be given an income tax credit, and those not purchasing could be assessed an income tax penalty. The only possible constitutional restriction is an archaic provision saying that if Congress imposes anything that amounts to a 'head tax' or 'poll tax' (that is, taxing people simply as people rather than taxing their income), then it must do so uniformly (that is, the same amount per person). This technical restriction is easily avoided by using income tax laws. Purists complain that taxes should be proportional to actual income and should not be used mainly to regulate economic behaviour, but our tax code, for better or worse, is riddled with such regulatory provisions and so they are clearly constitutional. (11) In many ways, the 'mandate' could be considered a tax, but a tax which people would not have to pay if they purchased health insurance. The House bill imposes a tax of 2.5% on adjusted gross income if a taxpayer is not part of a qualified health insurance program. The Senate bill imposes what is called an “excise tax”, a tax on transactions or events, or a “penalty tax”, a tax for failing to do something (e.g., filing your tax return promptly). The tax is levied for each month that an individual fails to pay premiums into a qualified health plan. Taxing uninsured people helps to pay for the costs of the new regulations. The tax gives uninsured people a choice. If they stay out of the risk pool, they effectively raise other people’s insurance costs, and Congress taxes them to recoup some of the costs. If they join the risk pool, they do not have to pay the tax. A good analogy would be a tax on polluters who fail to install pollution-control equipment: they can pay the tax or install the equipment.(17) Health insurance mandates incentivize behaviour like many other laws. At one time, the Supreme Court restricted the ability of Congress to use its taxing power to regulate people's activities. In the early part of the 20th Century, the Court drew a distinction between taxes designed to raise revenue, which were permissible, and taxes designed to regulate behaviour, which might not be permissible. However, this distinction was jettisoned by 1937, and the taxing power is now recognized as a broad congressional power.(12) Moreover, Congress has the power to make laws which promote the general welfare. As Democratic House Majority Leader Steny Hoyer argued in November of 2009: “Well, in promoting the general welfare the Constitution obviously gives broad authority to Congress to effect that end. The end that we're trying to effect is to make health care affordable, so I think clearly this is within our constitutional responsibility." The words "general Welfare" show up in the first line of Article I, Section 8 of the US Constitution: "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.”(12) The power to promote the general welfare becomes crucial when it is considered that it is impossible to create a national health insurance system and help the current 30 million uninsured is to mandate everyone to buy health insurance. You cannot have universal health insurance without a mandate. Every country in the world that has a universal health-insurance system either requires its citizens to buy health insurance, or includes its citizens in a default insurance programme automatically and taxes them for it (which is effectively the same thing). The reasons for this are simple, and have been covered hundreds of times since the current debate over universal health insurance began during the Democratic presidential primaries in late 2007. If citizens within a state are not obliged to participate in a healthcare scheme (whether privately of publicly organised), then many young and healthy people will bet on not needing insurance, and will decline to buy it. Such behaviour will alter the composition of the risk pool,  such that it is made up of older, sicker people with higher medical costs, and thus premiums will rise. That in turn will cause more healthy people to leave the system. This is the phenomenon of "adverse selection". Ultimately you're left only with rich old sick people, and nobody else can afford insurance. This is known- somewhat histrionically- as an “insurance death spiral”. States that wish to pursue the goal of creating an affordable, universally available system of healthcare, must ensure that the majority of their citizens buy into such a scheme.(13) Because there is a compelling benefit to the "general welfare"  in instituting a national welfare program, the federal government may rely on Constitutional authority to impose a health insurance mandate. If the States were left to do this, with some instituting a mandate and some not, many would be left uninsured and the risk pool would not be adequately spread. The difference in benefits to the country clearly justifies federal action to create this individual mandate under the Constitution.