Did The Founding Fathers Back Health Insurance Mandates? (Updated)

-Submitted by David Drumm (Nal), Guest Blogger

Harvard Law School professor Einer Elhauge writes that the very first Congress, in 1790, passed a law that included a mandate that ship owners buy medical insurance, but not hospital insurance, for their seamen. That Congress included 20 framers and was signed by another framer: President George Washington. In 1792, Washington signed another bill, passed by a Congress with 17 framers, requiring that all able-bodied men buy firearms. In 1798, Congress, with 5 framers, passed a federal law that required seamen to buy hospital insurance for themselves.

Why weren’t these examples cited by the Solicitor General during his oral argument?

Randy Barnett, looks at the example of ship owners required to provide health insurance for their seamen. Barnett sees no substantive difference between the purchase of insurance and a regulation requiring the purchase of life preservers or life boats. Ship owners are in the business of commerce and this law regulates how that commerce is conducted.

However, ship owners are not in the business of shipping seamen. Ship owners are in the business of shipping cargo, which sometimes includes passengers. Life preservers and life boats are directly concerned with the shipping business. A regulation requiring that seamen be able to perform their duties would be tied directly to the shipping business. A regulation benefiting those seamen unable to do their work, is not.

Barnett also looks at the Militia Act that required persons to provide their own firearms and notes that this is not a “purchase mandate” since the guns could be gifts or borrowed or inherited.

However, the insurance mandate doesn’t exclude insurance that comes as a benefit from a employer, or insurance that is provided under a parent’s policy.

Two years ago, David Kopel points out that the 1798 law imposed a 20 cents per month withholding tax on a seaman’s wages. This revenue was to be turned over to the Treasury Department and used to support sick and injured seamen. Kopel notes that the 1798 law is a good precedent for programs such as Medicare.

Although Elhauge’s examples are not without problems, the arguments against the first two examples also have their problems.

While a single-payer system would have circumvented the constitutional issues, it would have never made it through Congress.

UPDATE:

Einer Elhauge Replies

Professor Randy Barnett is a good friend who deserves enormous credit for coming up with a creative constitutional argument that has commanded such attention.  But I don’t ultimately find his distinctions persuasive, and it isn’t because I like the health insurance mandate.  I am on public record calling it bad policy.  But that of course does not make it unconstitutional.

Although Barnett acknowledges that the early medical insurance mandates were exercises of Congress’ commerce clause power, he distinguishes them on the ground that they were imposed on actors who were in commerce, namely on shipowners and (in a third example he omits) seamen.  His distinction thus means that he admits that these precedents show that if one is engaged in commerce in market A – here the shipping market or the seamen labor market – then Congress has the power to impose a mandate to purchase in market B – here the medical insurance market – even though markets A and B are totally unrelated.  This concession conflicts with the argument of the challengers, which claimed that widespread activity in the health care market did not permit a purchase mandate even in the highly related health insurance market.  Indeed, this concession seems to make the whole action/inaction distinction collapse because the fact that no relation between the markets is required means that commercial activity in any market – say, the market for employment or food or housing – would permit the Obamacare mandate.  Because the Obamacare mandate applies only to those who have income that subjects them to income tax, it is necessarily limited to people who are active in some commercial market and thus his test would be satisfied.

On the gun mandate, Barnett offers two arguments.  First, he says it was different because it did not require individuals to buy guns if they got them from someone else.  But the Obamacare mandate similarly just requires you to have health insurance; you don’t have to buy it if someone else provides it for you, which is true for many who get their health insurance from the government or their employer, spouse, or parent.  Plus, the gun mandate required the self-provision of consumables like ammunition and gunpowder that required purchasing more than one was already going to use.

Second, Barnett says the gun mandate was different because it was an exercise of the militia power rather than the commerce clause power.  But I still think this misses the point.  As Judge Silberman held, the text giving Congress the power to “regulate commerce” on its face includes a power to mandate purchases given 1780s dictionary definitions of “regulate.”  To rebut this, the challengers have relied heavily on the notion that the unprecedented nature of purchase mandates allows us to infer the framers were against them.  This example shows there was no such unspoken understanding.  Nor does the text of the militia clause give much basis for a greater power to mandate purchases.  To the contrary, the relevant portion of the militia clause gives Congress the power “To provide for… arming ….the Militia,” that is the power to provide the militia with arms, which seems the opposite of forcing individuals to self-provide those arms.  If that text can be flexibly read to allow a purchase mandate, then such a reading is even more plausible under the Commerce Clause.

Moreover, even if the challengers do win on the Commerce Clause, the mandate must still be sustained if it is authorized under the necessary and proper clause.  Given that the challengers admit the constitutionality of the provisions that ban insurer discrimination against the sick and argue that those provisions cannot be severed from the mandate, it seems undisputed that the mandate was necessary to exercise Congress’ commerce clause power to ban such discrimination.  The challengers’ argument on the necessary and proper clause thus boils down to their assertion that purchase mandates are not “proper” – and these historic examples refute the notion that the framers thought there was anything improper about purchase mandates.

Finally, Barnett asserts that these are the only examples of federal purchase mandates.   Even if that were the case, they seem pretty telling given their framer involvement and they rebut the claim such mandates were unprecedented.  But in fact there are many other examples of federal purchase mandates. One federal mandate requires corporations to hire independent auditors. Another requires that unions buy bonds to insure against officer fraud.  Such mandates fit the mold of allowing activity in one market to trigger a mandate in a totally different market, and as noted above, if that is constitutional, then so is Obamacare’s individual mandate.

H/T: LGF, Eugene Volokh.

625 thoughts on “Did The Founding Fathers Back Health Insurance Mandates? (Updated)”

  1. pbh – I didn’t know following the constitution was a reactionary response. Unless, of course, you happen to be from the left of the aisle. You know, l,ike how did 5 Supreme Court Judges find a WALL between Church and State when the President they got that comment from actually went to church services in the US House of Representatives and held religious activities at the US Capital? Geez taxing people IF THEY DON’T carry health insurance ISN’T a mandate to carry health insurance. I get your point about National Health Insurance. Nice try.

  2. Sorry if this has already been mentiond. And you can thank Aldous Huxley for this one. Regarding requiring ship owners to provide health insurance for seamen, Congress had the constitutional authority do so under Article I, Section 8, Clause 17 of the Constitution. Look for dock-yards.

  3. Gene H. – Health Insurance in America hasn’t been around since the Civil War. I believe that is what Mr. Rowan is saying. The 20 cent fee was a tax on healthcare, not insurance and it was collected and sent to the US Treasury. I think we have problems with words here. In 1798 Congress passed a law for health CARE not insurance and that is where we are getting confused. That is were the professor is trying to cross people up. It was not insurance, it was healthcare.

  4. Read an extremely interesting article from a Constitutional Scholar. It stated that the seaman’s insurance was done because all the ports were under Federal Control. It was Constitutional. Where 1790 or 1798. If a seaman got sick in Nova Scotia or England the company was responsible for that persons healthcare payments, just as if an Englishman got sick in an American port. Since these ports were Federally controlled the Federal Gov’t ruled that the Companies should supply healthcare to the employees by a 20 cent charge which would be turned over to the Federal Gov’t. This was a Federal Mandate for Federally owned property. It was as if the seamen were military (marines). No different than the servicemen today who get VA benefits. This is not a mandate for NATIONAL HEALTH INSURANCE nor private citizens. This article was unbelievably interesting as it shot holes in just about every thing the most liberal professor from Havard gave. It went point by point about the Federal Control of and mandate ability of the Federal Gov’t. As for the ability of the Federal Gov’t to tax that is another matter completely as we have seen throughout history. Should this fall under the Commerce Clause? I don’t believe so, but I don’t wear a robe nor am I a liberal.

    1. glenn

      “This is not a mandate for NATIONAL HEALTH INSURANCE”

      While I have a lot of doubts about the Roberts decision, not the least being his assertion of his ability to redefine words, ie: penalty=tax, there is no doubt that Congress enjoys the power to tax.

      You may not be a “liberal” and the services that you prefer to fund may not be the same services that I prefer to fund, but the power to collect funds on behalf of the provider of those several services is not in dispute.

      The feeble, weak, fearful Democrats who passed the ACA tried as best they could to disguise their financing of the ACA by calling a thing a no-thing. Roberts has called them out on that ruse.

      In doing so he has snatched a larger opportunity that you, from your apparently reactionary stance, should consider a great victory.

      pbh

  5. Actually the idea of insurance is very old. The ancient Greeks had trade societies that would care for survivors and pay burial expenses of members. The First Persian Empire (c. 550–330 BCE, a.k.a. the Achaemenid Persian Empire) had a form of insurance by registering gifts to the monarch with notaries and issuing coins that could later be used for imperial favors to aid in recouping financial loses or in dispute resolution. Before that, Chinese traders would limit their risk by distributing high value trade items among various warehouses and trade routes to insure losses were never total. Discrete insurance – i.e. insurance not attached to gifts to the court or contracts or guild membership – was maritime insurance first offered in the 14th Century CE in Genoa.

    There is nothing wrong with David’s history.

  6. This guy needs to re-check history. The first insurance plans didnt even start till the Civil War (1861-1865). The earliest ones only offered coverage against accidents related from travel by rail or steamboat. The plans did, however, pave the way more comprehensive plans covering all illnesses and injuries. The first group policy giving comprehensive benefits was offered by Massachusetts Health Insurance of Boston in 1847. Insurance companies issued the first individual disability and illness policies in about 1890.

  7. Blouise

    “could you word it differently so that I might understand what you mean by “reaches to the minimum of citizenship”?”

    I’ve been thinking about how to reply to your question and I have concluded that the best way to begin is to say that my statement is something of an overreach.

    Which is to say that not every American citizen of the United States would agree that they owe a debt to every other American citizen, or to ANY other American citizen.

    There is, however, another view of citizenship, which includes self respect. And the Golden Rule.

    So, maybe that last line of my previous post was an over statement. It is also an aspiration.

    pbh

  8. “But it is not unconstituional. Because it reaches to the minimum of citizenship.” (pbh)

    I don’t understand that last sentence … could you word it differently so that I might understand what you mean by “reaches to the minimum of citizenship”?

  9. Bob, Esq.

    “Mere existence cannot be a condition precedent for invoking the commerce clause else the entire architecture of the document becomes null and void.”

    This is why I am sugesting that health care is a special case.

    We both agree on the need for reform, but we disagree on the means.

    Your response is toss the bathwater, the bassinet, the nursery and that baby. My thought is, not so fast.

    Can we come up with a line in the sand that says this far and no farther? I think we can.

    And the separation is that health care is unavoidable. Other commerce is by choice.

    Voting is by choice. Firing a gun is by choice. Believing in God is by choice.

    Sex is (mostly) by choice. Sexual affliation, however, is not.

    If we can draw a Constitutional line for sexual affiliation, why not for health care? Neither one can be avoided.

    Mandating insurance coverage is a work around in a bad political environment. Granted. But it is not unconstituional. Because it reaches to the minimum of citizenship.

    You think the mandate will be twisted all out of shape into all sorts of other “mandates”, such as voting Republican. Not gonna happen.

    pbh

  10. Bob,

    I am anxiously awaiting pbh’s response to the commerce post.

  11. Pbh: “(in fact, Bob and I spent about two years arguing over this and, while I am sure he remains unconvinced of my assessment, he is unfortunately wrong)”

    Pbh,

    The problem here is merely one of perception. For example, ask your average citizen if George W. Bush committed any crimes during his presidency for which he should be prosecuted and what response do you think you’d probably get? One based on fact or one based on mere favored form of perception that’s willing to overlook any contradictory facts so as to preserve said perception?

    You’ve already stated that you agree with Bugliosi’s arguments; yet there’s no prosecution much less any discussion in the media. It’s completely ignored. Why?

    Likewise, when I point to a glaring contradictory fact like the existence of molten metal for months at the bases of all three buildings, how is it that NIST actively chose to completely ignore it and deny its existence?

    I may have adopted the Ralph Cramden philosophy of life

    to wit

    Norton: “Hey Ralph, mind if I smoke?”

    Ralph: “I don’t care if ya burn!”

    but that doesn’t mean I have to lie to myself.

  12. Pbh: “So, if you want to draw a bright line between health care and other forms of commerce, you merely have to note that health care is ubiquitous and unavoidable. That is not so of any other form of commerce.”

    Pbh,

    If it is truly ubiquitous then we cannot call it ‘commerce’ without decimating the doctrine of specifically enumerated powers and federalism. Mere existence cannot be a condition precedent for invoking the commerce clause else the entire architecture of the document becomes null and void.

    The omnipresent problem of health care must be dealt with through the equally ubiquitous power of the general tax rolls–just as we fund all the other ‘ubiquitous

  13. pbh,

    Our former President and his Administration were only capable of political usage … it was part of the bad things that continued to happen. I believe History will take the same offense as you.

    It is a sad fact that there are those who solicit applause even for their greatest failures.

  14. Blouise

    “Never, no matter how hard I might try, would I be able to place myself in your shoes on that day.”

    Bad things happen all the time. I make no claim because I happened to be on the Island that day. I merely take offense at those, such as our former President, who attempt to use that event for political purposes.

    pbh

  15. “And I watched tower # 7 collapse outside my window after I walked all the way downtown from my midtown office to return to my home.” (pbh)

    Never, no matter how hard I might try, would I be able to place myself in your shoes on that day.

Comments are closed.