In response to my post on Dan Coenen's "The Originalist Case for the Individual Mandate" and Larry Solum's comment that "one of the key questions for originalists [should] be whether insurance contracts constitute 'commerce,'" Brett Bellmore writes:
I would have thought that the key question would, instead, be whether insurance contracts, (Let alone the decision not to enter into them!) constitute interstate commerce.
Two comments: (1) In Paul v. Virginia, Justice Field said that insurance contracts, in addition to being not commerce, also weren't interstate:
[Insurance contracts] like other personal contracts between parties which are completed by their signature and the transfer of the consideration. Such contracts are not interstate transactions, though the parties may be domiciled in different States. The policies do not take effect — are not executed contracts — until delivered by the agent in [the state of the insured's residence]. They are, then, local transactions, and are governed by the local law. They do not constitute a part of the commerce between the States any more than a contract for the purchase and sale of goods in Virginia by a citizen of New York whilst in Virginia would constitute a portion of such commerce.
Like many things Justice Field wrote, I find this unpersuasive. An insurance contract isn't like a local purchase-and-sale because it's an on-going obligation (like a loan), and when entered into by parties in different states the continuing obligation crosses state lines. Thus it's interstate, as I think cross-border loans were always understood as interstate. So it's right that this is an important question to ask, but I think the answer favors the individual mandate.
(2) I agree with Mr. Bellmore's implication that the decision not to enter into an insurance contract isn't commerce nor is it interstate. Indeed, I don't really see a plausible counterargument. But that's not the end of the discussion, because Congress' necessary-and-proper power could potentially reach a non-interstate non-commercial (in)activity. Thus the difficult question is whether the mandate is necessary (and proper!) to regulation of the interstate insurance market.
Posted at 3:00 PM