Let’s look at them one by one.
1. Individual mandates requiring people to procure health insurance.
This falls under the taxing and spending clause of the Constitution, which states, in pertinent part, that “[t]he 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.” U.S. Const. Art. I, § 8, Clause 1.2. A mandate against the state, requiring additional state funds be put into Medicaid.
Even by its plain language, it is easy to see how this health insurance mandate is Constitutional, but case law still backs it up. Not since the 1918 case of Hammer v. Dagenhart has the Supreme Court found anything resembling the current issue unconstitutional. Hammer was overruled by United States v. Darby Lumber a few years later, and the rest is history.
In tax code, there are all kinds of instances when things like this happen; where Congress uses taxing authority to further general welfare. Rebates for purchases, tax deductions on home mortgages, better tax rates for married individuals versus single, etc.
The challenge against individual mandates fails.
The increased state outlay into Medicaid is matched by a large Federal outlay into Medicaid. Once again, this falls into the Constitution’s tax and spend clause. The Federal government cannot “force” the state to comply with its federal law, and it is not. The state can still choose to not contribute any additional funds to Medicaid, with the result being that they will then not receive any Federal Medicaid funding. (A common example of a similar law already in place is DUI law: states must enact the .08 DUI law or else lose Federal highway funding.)3. A second issue of a state mandate, whereby, under the statute, state insurance exchanges are to be formed.
The four-prong test to determine if a Federal statute enforced through the tax and spend clause passes Constitutional muster is that the statute must (a) be in pursuit of general welfare, (b) be unambiguous, (c) be related to the federal interest, and (d) be non-coercive.
No one can argue that the statute easily passes (a), (b), and (c). The challenges are arising on (d): the statute cannot be coercive. The state Attorneys general are arguing that the amount of money involved is so disproportionate that they cannot possibly turn it down, leaving them without the option to withhold additional state Medicaid funding. Proportionality is determined by comparing cost to benefit; to be disproportionate, the cost must significantly outweigh the benefit. In this case, however, the additional Medicaid funding is not disproportionate at all: increased funding to Medicaid (cost) results in a directly proportionate benefit (Medicaid to additional people).
The challenge against additional state funding of Medicaid fails.
The Attorneys general argue that both New York v. United States (unconstitutionality of a federal law requiring states to “take title” and assume responsibility for any nuclear waste produced within their borders) and Printz v. United States (unconstitutionality of federal law that required state police to be involved during the interim period of the Brady handgun bill) preclude the federal government from commandeering state resources by requiring states to form insurance exchanges. The Attorneys general invoke the 10th amendment, which states that “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people” to claim the unconstitutionality of the federal government making these laws.
However, unlike New York and Printz, the current health care package provides that, if the state does not set up an insurance exchange, the federal government will. The state is not forced to do anything.
Further, in Darby, the Supreme Court held that the 10th amendment was nothing but a “truism”: if Congress has the power, it does not violate the 10th Amendment; if Congress does not have the power, it violates the 10th Amendment. In other words, the 10th Amendment does not add any additional Constitutionality or unconstitutionality to something that has been deemed either Constitutional or unconstitutional by other Amendments and Articles.
Insurance has always been held to be a federal matter; it has only been regulated on a state level because Congress ceded the power to the states through, amongst other things, the McCarran Act. So, just as Congress gave states the power, it can take it away. Since health insurance falls under Federal power, the health insurance package does not violate the 10th Amendment.
The challenge against insurance exchanges fails.
