As regular VC readers know, I believe a central issue in the individual mandate regulation is properly defining the class of activities regulated by the mandate. (See, e.g., here and here.) This is important because this determination is central to the question of whether the mandate represents a permissible exercise of the commerce power. Among other things, the class must be identified before all instances of the regulated activity can be aggregated (as under Wickard).
For this reason, I was particularly interested to see how the Eleventh Circuit addressed this question. Focusing on the actual text and application of the mandate, the court concluded that the class of activity subject to regulation is substantially broader than asserted by the federal government in the litigation, and extends beyond economic activity. The relevant portions of the opinion are reproduced below the jump.
the individual mandate’s attempt to reduce the number of the uninsured and correct the cost-shifting problem is woefully overinclusive. The language of the mandate is not tied to those who do not pay for a portion of their health care (i.e., the cost-shifters). It is not even tied to those who consume health care. Rather, the language of the mandate is unlimited, and covers even those who do not enter the health care market at all. Although overinclusiveness may not be fatal for constitutional purposes, the Supreme Court has indicated that it is a factor to be added to the constitutional equation. For example, in Lopez the vast majority of the regulated behavior (firearm possession) did possess an interstate character. However, the Supreme Court ultimately found this fact insufficient to save the statute. Rather, the Supreme Court commented that an interstate-tying element in the statute itself “would ensure, through case-by-case inquiry, that the [activity] in question affects interstate commerce.”
Here, the decision to forego insurance similarly lacks an established interstate tie or any “case-by-case inquiry.” See id. Aside from the categories of exempted individuals, the individual mandate is applied across-the-board without regard to whether the regulated individuals receive, or have ever received, uncompensated care—or, indeed, seek any care at all, either now or in the future. Thus, the Act contains no language “which might limit its reach to a discrete set of [activities] that additionally have an explicit connection with or effect on interstate commerce.” . . .
the language of the individual mandate does not truly regulate “how and when health care is paid for.” 42 U.S.C. § 18091(a)(2)(A). It does not even require those who consume health care to pay for it with insurance when doing so. Instead, the language of the individual mandate in fact regulates a related, but different, subject matter: “when health insurance is purchased.” Id. If an individual’s participation in the health care market is uncertain, their participation in the insurance market is even more so.
In sum, the individual mandate is breathtaking in its expansive scope. It regulates those who have not entered the health care market at all. It regulates those who have entered the health care market, but have not entered the insurance market (and have no intention of doing so). It is overinclusive in when it regulates: it conflates those who presently consume health care with those who will not consume health care for many years into the future. The government’s position amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress’s enumerated power.
This issue also resurfaces when the court addresses the federal government’s effort to identify limits on federal power and distinguish the mandate from other hypothetical regulations that could be adopted, e.g. mandates to purchase other goods or services.
The first problem with the government’s proposed limiting factors is their lack of constitutional relevance. These five factual criteria comprising the government’s “uniqueness” argument are not limiting principles rooted in any constitutional understanding of the commerce power. Rather, they are ad hoc factors that—fortuitously—happen to apply to the health insurance and health care industries. They speak more to the complexity of the problem being regulated than the regulated decision’s relation to interstate commerce. They are not limiting principles, but limiting circumstances. . . .
Under the government’s proposed limiting principles, there is no reason why Congress could not similarly compel Americans to insure against any number of unforeseeable but serious risks. High costs and cost-shifting in premiums are simply not limited to hospital care, but occur when individuals are disabled, cannot work, experience an accident, need nursing care, die, and myriad other insurance-related contingencies. . . .
At root, the government’s uniqueness argument relies upon a convenient sleight of hand to deflect attention from the central issue in the case: what is the nature of the conduct being regulated by the individual mandate, and may Congress reach it? Because an individual’s decision to forego purchasing a product is so incongruent with the “activities” previously reached by Congress’s commerce power, the government attempts to limit the individual mandate’s far-reaching implications. Accordingly, the government adroitly and narrowly redefines the regulated activity as the uninsured’s health care consumption and attendant cost-shifting, or the timing and method of payment for such consumption.
The government’s reluctance to define the conduct being regulated as the decision to forego insurance is understandable. After all, if the decision to forego purchasing a product is deemed “economic activity” (merely because it is inevitable that an individual in the future will consume in a related market), then decisions not to purchase a product would be subject to the sweeping doctrine of aggregation, and such no-purchase decisions of all Americans would fall within the federal commerce power. Consequently, the government could no longer fall back on “uniqueness” as a limiting factor, since Congress could enact purchase mandates no matter how pedestrian the relevant product market.