Does Obamacare Negate Its Own Insurance?

A brief recently filed by the Institute for Justice as a friend of the court (amicus curiae) in the Obamacare case now pending before the United States Supreme Court raises a most interesting point: contracts must be entered into voluntarily to be valid and enforceable. (This is what lawyers call "hornbook law": it is fundamental to the law of contracts, and has been with us since the very beginnings of the legal system.)

A contract entered into under duress, such as threat of sanctions, retaliation or punishment, on the other hand, is unenforceable, and may be set aside in court. That is because to make a valid contract, the law requires a "meeting of the minds" -- two individuals must come freely together, and freely decide and agree on the same terms for their contract. If one of those minds is under duress, it cannot meet the other in the free and voluntary sense which the law requires to make a contract.

The so-called "individual mandate" in Obamacare requires that everyone purchase a healthcare insurance policy, under threat of fines and, eventually, imprisonment for refusal to pay the fine. A more classic case of forcing people into a contract under duress could scarcely be imagined.

For insurance is, of course, a contract. The insurance company agrees with the insured to pay certain costs of the insured's medical care, in accordance with the terms of the insurance policy ("policy" in this usage is synonymous with "contract").

The IJ amicus brief thus poses the interesting question: how can any insurance contract entered into under the threat of Obamacare's sanctions be enforceable? Here is a short video by one of the authors of the brief, Professor of Constitutional Law Elizabeth Price Foley, which explains the huge ramifications of the argument:




And here is the link to download the brief (42-page .pdf file).

What I find most interesting is that I have been following a number of legal blogs which carry arguments pro and con regarding the healthcare mandate (especially The Volokh Conspiracy), but to date I have never seen any other law professor raise this fundamental argument. That they have not done so, and that many of them can entertain even the notion that the mandate is constitutional, speaks volumes about the institutional mentality that has crept over our law schools.

Here, for example, is the link to download the Government's brief in support of Obamacare. Read it through, if you wish, and you will not find a single discussion of the mandate from the point of view of contract law. (The word "contract" itself appears only twice in the brief, on page 42.) Instead, it is all about the commerce power of Congress (and its power to tax), and the reasonableness of requiring people to purchase insurance so that the plan overall will work. In other words, Government sees itself only in terms of extending the powers it has, and of defending the "reasonableness" of each such extension.

The IJ's argument, however, is a killer. If Congress can force people to enter into a contract for insurance, then Congress could force people to contract to purchase a Chevy Volt, in the name of fuel economy.

The Supreme Court has set aside three days in late March -- six hours of argument in all -- to consider the merits of Obamacare. It is sure to be covered heavily (although, alas, the Supreme Court refuses to allow streaming video), and will be well worth following for what it says about the current makeup of the Court, about the forces backing Obamacare, and about the nature of our federal government.

(Aside: if you want your eyes opened about the kinds of forces backing Obamacare --as well as the kind of lawyers there are in training right now who see nothing wrong with demanding free contraception as an economic right -- be sure to head over to Hot Air, and read this piece by Tina Korbe. Be sure, also, to watch the embedded video of a Georgetown Law student pleading her case to Congress to mandate that her school-provided insurance pay for free, unlimited sex while she is a student, so that she doesn't go broke buying contraception on top of having to pay tuition to learn the law.)

Make no mistake -- the stakes with Obamacare are huge. In the balance hangs the future of the liberties on which this country was founded.