Let’s assume that McCulloch had contained the iconic statement that Chief Justice Marshall later explained in his “Friend” essays was what he actually meant:

“Let the power be legitimate, let it be an enumerated power within the scope of the constitution, and all direct means and incidental powers which are appropriate, which are plainly adapted to the execution of that enumerated power, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.”

How would Obamacare have fared under McCulloch properly construed in this way?

The first question would be whether the Obamacare statute was an exercise of the Commerce Power by what Marshall regarded as “direct” means.  The answer here is clearly “no” because the Affordable Care Act is not actually a regulation of interstate commerce, but rather new set of rules governing intrastate sales of health insurance.

Indeed, we have a Balkanized state system of health insurance regulation that precludes interstate sales of health insurance policies.  Congress could have enacted a direct regulation of interstate commerce that struck down these intrastate regulations to create a genuine interstate health insurance market, but it chose not to do so.  Instead, it sought indirect change of the interstate healthcare market by promoting intrastate sales of health insurance through the “guaranteed issue” and “community rating” provisions.  These provisions cannot be direct means of exercising the Commerce Power because they do not implement any regulation of interstate commerce.

This leads to a second question, namely whether the “guaranteed issue” and “community rating” provisions are justified as incidental powers under the Necessary & Proper Clause.  Again the answer must be “no” because again they are not supporting or perfecting any regulation that executes the Commerce Power by direct means.  Thus, they are not “necessary” in either the restrictive (“indispensable”) or expansive (“convenient”) sense because they are not tethered to any actual exercise of the Commerce Power.  The issue of whether they are also “proper” does not even come up.

The only justification for the “guaranteed issue” and “community rating” requirements is that they are rationally related to the permissible goal of expanding health insurance coverage.  This would be a legitimate “object” within the scope of the Preamble, but not the type of legitimate “end” that Marshall was talking about in McCulloch because expanding health insurance coverage is not itself the exercise of an enumerated power, only a goal to be achieved through an enumerated power.

To be sure, ever since the New Deal, Congress has been able to regulate intrastate activities that have a substantial effect on interstate commerce, and my revision of Marshall’s iconic statement above would not undermine this doctrine when the intrastate regulation is needed as an incidental power for supporting or perfecting the interstate regulation.  Indeed, the Substantial Effects Doctrine can be viewed legitimately as a method of construing the Necessary & Proper Clause to determine if the intrastate regulation is in fact supporting or perfecting the interstate regulation.

But you still need a specific interstate commerce regulation, not just some amorphous goal involving interstate commerce, before asking whether it is necessary and proper to regulate intrastate activity that has a substantial effect on interstate commerce.  Congress, for example, could have passed a statute that directly prohibited the interstate sale of health insurance policies that lack “guaranteed issue” and “community rating” provisions.  Under United States v. Darby, which proscribed the interstate shipment of lumber manufactured by workers lacking certain minimum wages and maximum hours, Congress would have a plausible precedent for further prohibiting the sale of intrastate health insurance policies lacking “guaranteed issue” and “community rating” provisions.

The issue then would have been whether the prohibition on such intrastate policies was a necessary and proper means for supporting or perfecting the direct prohibition on such interstate policies.  If we had an existing interstate market for health insurance policies, then the intrastate prohibition would likely be upheld under Darby as a proper exercise of an incidental power for enforcing the interstate prohibition.  The fact that no such interstate market exists, however, would expose the intrastate prohibition as a mere pretext for regulating intrastate activity.

By this analysis the “guaranteed issue” and “community rating” requirements of Obamacare are themselves unconstitutional even without resorting to the individual mandate.  The individual mandate is just one more step removed from the Commerce Power in that it is not itself a direct regulation of interstate commerce or an incidental power for executing such a regulation.

At best the individual mandate is a secondary incidental power for perfecting other incidental powers (“guaranteed issue” and “community rating”) that are not themselves means for executing an enumerated power. This is Jefferson’s proverbial “House that Jack Built” – piling necessities upon necessities – made worse by the fact that one of the “necessities” of Obamacare, namely preventing the adverse selection caused by the “guaranteed issue” and “community rating” requirements, was created by the Obamacare statute itself.

Of course, under modern Commerce Clause jurisprudence, one no longer has to show how an incidental power is needed to execute an enumerated power; it is enough if the incidental power regulates an intrastate activity that substantially affects interstate commerce, and the incidental power is rationally related to one of the goals found in the Preamble.

Nonetheless, I would argue that this construction of the Necessary & Proper Clause constitutes a improper judicial amendment of the Constitution (at least as applied in interstate commerce cases), and I think it can be attributed in large measure to the linguistic sleight of hand whereby Marshall’s legitimate “end” is no longer an enumerated power, but any of the Preamble’s “objects.”  In any event, this linguistic sleight of hand is what has made Obamacare possible thus far, and we can only hope that the Supreme Court will strike down this House that Jack Built and force Congress to start over.

Copyright © 2012 Anthony W. Hawks. All rights reserved.