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Health Care and Commerce

Mar 20, 2012 • Demand, Supply, and Markets, Economic History, Government, Households, Macroeconomic Measurement, Regulation, Uncategorized • 200 Views    No Comments

How to define commerce?

In 1824, the U.S. Supreme Court was asked to decide if New York State could give a monopoly to a steamboat operator. In his decision, Chief Justice John Marshall rejected the narrow “buying and selling” definition of commerce. Instead, he said that commerce included all economic intercourse. Consequently, New York could not confer an exclusive right to travel on interstate waterways because Congress had the power to regulate interstate transport.

That 1824 decision, Gibbons v. Ogden, was only the beginning. Used to strike down New Deal legislation and to support Civil Rights law, the interpretation of the Commerce Clause has been varied. Now, starting on March 26 with 5 1/2 hours of oral arguments, again the Supreme Court will probably tell us what commerce means.

The Commerce Clause directly relates to 1 of the 2 major sections of Obama health care legislation that the Court is considering. Called the individual mandate, beginning in 2014, most of us will be required to obtain health insurance coverage or pay a penalty. Does Congress have the authority to mandate coverage? The Commerce Clause will provide an answer.

Interesting: Reflecting the importance of the issues, the Supreme Court has allocated an unusually long 5 1/2 hours to oral arguments. Also, they will make audio recordings available within hours of their presentation.

Here, econlife describes the other Affordable Care Act issues that the Supreme Court will ponder.

The Economic Lesson

Hoping to promote a single national economy, the framers of the Constitution included a “Commerce Clause” that gave the Congress the power to, “regulate Commerce with foreign nations and among the several states, and with the Indian Tribes.” In Marshall’s Gibbons v. Ogden decision, he specifically says “commerce” includes trade and transportation.

Here, in an econlife post, you can see historic definitions of the “commerce clause.”

An Economic Question: How can opponents and supporters of the Patient Protection and Affordable Care Act each use the “commerce clause” to support their position?

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