A Very American Problem – Part 1

A Very American Problem – Part 1

For those of you still on a high from the Jubilee long weekend, eagerly awaiting Wimbledon and the Olympics, consider yourself lucky. While you nurse Pimm’s hangovers and regret your over-indulgence on cucumber sandwiches, spare a little thought for your friends across the pond. We are looking forward to a make-or-break Supreme Court decision on the future of healthcare. Would somebody pass me the strawberries and cream? This is going to be quite a match.

Briefly, the Affordable Care Act (ACA) was passed in 2010 and is largely considered to be the flagship policy of Obama’s term in office. In the US, unlike the UK, to receive healthcare you must pay for it directly (even if you have an employer that makes a contribution – and not all do) and it is incredibly expensive (the ‘if you can’t pay for your cancer treatment, you sell your house’ type of expensive). Thus, those who can afford to, take out insurance. Unlike the NHS, which is paid for out of general taxation and is universal, Americans pay in advance through insurance or they take the risk and pay as they get sick (through the nose).

The ACA is essentially an attempt to solve this problem politically at a federal (all of the USA) level. Instead of taking the general taxation route, which some claim was his real intention, some say Obama was forced to create legislation with ‘The Individual Mandate’ because he simply would not have got the votes in Congress. The Individual Mandate forces everyone to get private insurance. In this way it means that everyone is covered in advance of their treatment and it avoids the systemic problem that those with no insurance, and who never ultimately pay their medical bill, inflate the cost for everyone else. So why is it so contentious?

First, healthcare in America is contentious and we must start from that position. Not everyone agrees that healthcare is a right. Thus, it is a divisive and partisan issue. For those who disagree that the system needs changing, the ACA is an affront to the liberty to choose whether to purchase insurance. Some point to the dangers of the ‘European model’ of socialised (and in their view, socialist) healthcare. On the other hand, for those who wanted a system more like the UK model, it is a lousy compromise. Tough sell, then. But these are political arguments and, ultimately, the political success of ACA will be judged when Obama faces his re-election challenge in November. Legally though, this question will be answered in the next couple of days. Whether ACA stands or falls comes down to nine un-elected people: the Justices of the Supreme Court of the United States. For a non-American, it is sometimes difficult to work out how we got here.

Let’s start at the beginning, which in American law is always the Constitution. The US Constitution created three distinct branches of government: the legislative branch (Congress), the executive branch (the President) and the Judiciary (the Federal Courts, at the top of which is the Supreme Court). These powers are narrowly and strictly defined, both in relation to each other and in relation to the powers of the individual states, who have guarded their political powers jealously in the face of federal actions. In the case of Marbury v Madison (1803), the Supreme Court decided that they had the power of Judicial Review, the power to decide whether the actions of the federal government fall strictly within the bounds laid down by the Constitution. What makes this different from Judicial Review in English law is that this is primarily about legislation and not executive actions, and it gives the Supreme Court the power to strike down democratically-enacted Acts of Congress. No comeback, no additional vote. Invalid and gone.

The Obama administration claim that the ACA is constitutional because the powers given to Congress by the Constitution (‘the Enumerated Powers’) include the right for the federal government to regulate actions that impact the flow of trade across individual state lines. Healthcare, they say, is the ultimate example of a type of trade and commerce that moves between the states. In fact, it moves as much as we do; people often get sick in different states and insurance companies operate nationwide. In legal circles at least, this power, called the ‘Commerce Clause’, has quite a politically contentious past too. I am sure this is not a surprise.

The Commerce Clause is one of the broadest of the Enumerated Powers. Consider, for example, the conferral of power here: ‘Congress shall have the power … to regulate commerce … among the several states’ (Commerce Clause). Then compare it with this, ‘Congress shall have the power [t]o establish post offices and post roads’ (Postal Clause). Both are Enumerated Powers given to Congress, but there is an obvious difference. The Commerce Clause is broad. As a result it has been used (and possibly abused) by many US governments throughout history to go beyond the original grant of powers given to them by the Constitution.

In the Great Depression, the Commerce Clause was used by Congress to limit the amount of food a farmer could grow for his own consumption. During the civil rights era, it was used to ban racial segregation at restaurants and hotels on interstate highways. Then, in the 1990s, to restrict guns in school zones and later, to limit the growth of marijuana because of its ability to impact interstate commerce. Note again that the doctrine of the Separation of Powers limits the power of Congress because the ability to legislate on marijuana and guns are not expressly conferred to them. Through the Commerce Clause, however, numerous federal governments have attempted to go beyond what was previously considered to be within their powers. See what I meant about it being broad?

The Commerce Clause is one of the broadest of the Enumerated Powers.

The important thing about the Commerce Clause is not that Congress has pushed it to its outer limits to increase their power, but that sometimes the Supreme Court allows them to and sometimes they do not. When the federal government pushes the Commerce Clause to the limits of their Enumerated Powers, it is said that the composition of the Court is more decisive than the content of the legislation in determining whether the legislation stands or not.

Historically, the Court was hostile to an expansion in the Commerce Clause. In the early part of the 1930s, the Court invalidated what it considered to be over-broad use of the Commerce Clause to regulate the mining industry (Carter v Carter Coal Company). But by 1936, following threats by Franklin D. Roosevelt to overhaul the composition of the Supreme Court, their approach to the Commerce Clause was suddenly more deferential. What followed was a period of almost complete judicial deference to the federal government on Commerce Clause matters. This included compelling individual farmers to stop producing their own food and to buy other peoples’. For those constitutional scholars who believe that the ACA will be upheld, this case (Wickard v Filburn (1942)) is the most analogous to compelling individuals to purchase healthcare. Everyone eats; everyone gets sick.

What followed was 60 years of limited judicial interference in legislation under the Commerce Clause banner. Then, in 1995, Congress pushed it too far. In the case of United States v Lopez, the Court ruled that using the Commerce Clause to criminalise a student from carrying a hand-gun to class was invalid. This was followed closely by United States v Morrison, where again the Court declared that Congress had gone too far (Congress attempted to enact legislation under the Commerce Clause, on the basis that sexual assault against women was an inter-state commerce issue). The days of crying Commerce Clause were over. This is where we find ourselves today.

In another interesting twist, that only gives us 4–4 and thus the decision may rest with the swing vote, Justice Kennedy.

We will have a verdict in the next couple of days. The cynical amongst us will say that it will be political. Commentators claim that the liberal Justices will vote to uphold the Act and the conservative Justices will vote for it to be declared invalid. In another interesting twist, that only gives us 4–4 and thus the decision may rest with the swing vote, Justice Kennedy. The future of healthcare may turn on where he says the limits of the Commerce Clause lie. It could go either way. Will the Supreme Court state that the federal government has the right to regulate the insurance industry as interstate commerce and compel individuals to enter a market that they do not want to enter (following Wickard v Filburn) or will they continue the trend of rolling back the expansion of the Commerce Clause and invalidate the Act (following Lopez and Morrison)?

Check back in after the decision for a British-friendly analysis of the ruling. Until then, have a Pimm’s for me!


UPDATE: The latest piece in this series, A Very American Problem – Part 2 has now been published.

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