The Factual Bases for Constitutional Challenges to Federal Health Insurance Reform

From challenges to his citizenship to assertions about his religion, no U.S. leader has had to endure the relentless bombardment of fabrications and falsehoods that continue to stalk President Obama. The same is true for his signature domestic program, the Patient Protection and Affordable Care Act of 2010 (the “ACA” or “Affordable Care Act”). According to FactCheck.org, “We’ve seldom seen a piece of legislation so widely misrepresented, and misunderstood, as the new health care law.” Against this backdrop, it is critically important for sober-minded legal analysts to navigate carefully when moving through the minefield of factual claims on which constitutional challenges to health care reform are based. For some branches of constitutional law, social and economic facts matter little or not at all. This is not the case, however, for challenges to the Affordable Care Act, which raise four basic constitutional arguments: 1) that mandating individuals to purchase health insurance is not “necessary and proper” to regulating how insurance is sold in interstate commerce; 2) that mandating coverage regulates the merely passive decision to remain outside the health insurance market and to pay for care out-of-pocket; 3) that various regulatory provisions violate individual rights protected by the Fifth Amendment; and 4) that federal requirements “commandeer” states and therefore violate their sovereign authority. These constitutional charges depend heavily on how people and institutions behave, and how insurance markets function, under and prior to the reform law. Fortunately, the health care sector has been studied thoroughly, so a great deal of empirical information can be marshaled to evaluate the strength of constitutional attacks and defenses, avoiding the need for lengthy trials or uncertain speculation. Thus, this article aims to collect the full range of available empirical data that sheds light on the factual bases for this range of legal challenges, by documenting more accurately what the Affordable Care Act actually does, and the most credible projections of its probable impacts. The single most important fact to understand is the heavy concentration of overall medical costs in a relatively few people who have very high costs. The extreme magnitude of differential health risk explains the private insurance market’s most perplexing dynamics – ones that the Affordable Care Act aims to remedy. The ACA targets several troubling phenomena, each of which derives from the basic fact that insurers stand to gain a great deal by avoiding or appropriately pricing people with higher risks. With this baseline of understanding clearly in mind, major elements of the constitutional challenges have very weak or no factual support. Health insurance markets cannot be effectively regulated to eliminate medical underwriting without also requiring that most people purchase or obtain coverage. People who opt out of coverage are likely to use health care services they do not fully pay for, imposing additional costs on those who do purchase or fund coverage. And, states are not coerced into implementing federal reform. Instead, they retain numerous freedoms to craft market reforms to fit local market conditions, to fall back on federal default options, or even to opt out of Medicaid, if they believe that is truly in the best interests of their citizens. These and other points of fact undercut the vast majority of colorable constitutional claims that opponents have made.