The Health Insurance Mandate - A Tax or a Taking

The Patient Protection and Affordable Care Act requires Americans to have or buy health insurance. The Act, particularly the individual mandate, has generated enormous political controversy and constitutional litigation. The House of Representatives has voted 54 times to repeal the law, and President Obama\u27s implementation has spurred calls for his impeachment. The Act has already reached the Supreme Court twice. In National Federation of Independent Business v. Sebelius ( NFIB ), the Supreme Court held the mandate could not be sustained as an exercise of Congress\u27 power over interstate commerce, but was valid under the Tax and Spend Clause. Other constitutional challenges are winding their way through the lower courts. This article is about one such challenge-that mandated purchases, whether of insurance or other goods, may violate the Takings Clause. It is an issue that has received little attention thus far. But another recent Supreme Court case, Koontz v. St. Johns River Water Management District, has revived the notion that monetary burdens imposed by regulation can be takings. Not all exactions violate the Takings Clause. The best example is taxes. NFIB held that the penalty for failure to buy insurance was, despite the express language of the Act, a tax for purposes of Congress\u27 enumerated power. Whether the penalty can be considered a tax for other constitutional purposes remains to be seen. Some lower courts have held that it is not a tax for the Origination Clause because it was not designed to raise revenue. The same reasoning may apply to whether it is a tax exempt from the Takings Clause. This article explores these issues-an undertaking not previously found in the literature. The analysis applies not just to the Affordable Care Act, but to any consumption mandate that might be enacted to address social or fiscal problems. The takings question is much harder than it seems at first, but inevitable as the Act unfolds