Affordable Care Act Arguments: Minimum Coverage Provision

by Ice Miller LLP

March 29, 2012

Gregory Pemberton, Paul Hogan

Perhaps the most significant, and most contentious, of the provisions of the Patient Protection and Affordable Care Act of 2010's (the Act) is the so-called "individual mandate." The individual mandate requires virtually every individual in the United States to maintain "minimum essential coverage" (i.e. health insurance or other recognized form of health care coverage providing cost coverage for, at a minimum, certain prescribed benefits) beginning in 2014. For any month in which this minimum essential coverage is not maintained, a penalty is assessed against such individual based on the individual's household income subject to both a minimum and maximum penalty (the penalty).

On March 27, 2012, the Supreme Court of the United States (the Court) heard an astounding two hours of oral arguments from the interested parties over a challenge to the constitutionality of the individual mandate from 26 states (collectively, the states) and some individual parties (collectively, the individuals). In order for an act of Congress to be constitutional, the act must be a valid exercise of one or more of the powers specifically granted to Congress under Article I, Section 8 of the U.S. Constitution. In response to the constitutional challenge, the federal government has defended the individual mandate as valid exercises of its powers to:

1.regulate interstate commerce;

2.lay and collect taxes; and

3.make laws necessary and proper in connection with points one and two.

This article briefly sets for the oral argument attendant to each of the three defenses (and challenges) to the constitutionality of the individual mandate.


Congress has the power to "regulate Commerce…among the several States…" The federal government defends the individual mandate as a valid exercise of this power by focusing on the interconnectedness between the markets for health insurance and health care, claiming that "[the individual mandate] is a necessary component of a broader scheme of interstate commerce [i.e. health care]" and by noting that "[the individual mandate] itself regulates economic conduct with a substantial effect on interstate commerce [i.e. the financing of health care]" either one of which, individually, would be permissible under the power. The states and the individuals, on the other hand, focus their challenge on the distinction between health care and health insurance, claiming that the power of the federal government to regulate one interstate market (i.e. the market for health care) does not imply a separate power to require individual citizens to enter into an entirely separate market (i.e. the market for health insurance) prior to the point of health care consumption.

The vast majority of the allotted two hours was spent by attorneys for the various parties addressing questions from the justices dealing with the constitutionality of the individual mandate as an exercise of the commerce power. Justice Kennedy stated what, based on the various questions posed, appeared to be the primary concern of the Court with the federal government's position:

"[H]ere the government is saying that the federal government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the federal government to the individual in a very fundamental way."

In other words, as Justice Scalia put it, "[i]f the government can [impose the individual mandate], what else can it not do?" Ultimately, the decision of the Court as to the constitutionality of the individual mandate is likely to hinge on whether or not the federal government was able to convince the justices that upholding the individual mandate as a legitimate exercise of Congress' power to regulate interstate commerce will not lead down a slippery slope to a federal government with unlimited power to regulate individual conduct, or, as many pundits have posited, a federal government that can require everyone to eat broccoli.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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