American Journal of Law & Medicine

The Liberty of Free Riders: The Minimum Coverage Provision, Mill's "Harm Principle," and American Social Morality

[A] direct requirement for most Americans to purchase any product or service.... certainly is an encroachment on individual liberty, but it is no more so than a command that restaurants or hotels are obliged to serve all customers regardless of race, that gravely ill individuals cannot use a substance their doctors described as the only effective palliative for excruciating pain, or that a farmer cannot grow enough wheat to support his own family. The right to be free from federal regulation is not absolute, and yields to the imperative that Congress be free to forge national solutions to national problems, no matter how local--or seemingly passive--their individual origins. (1)


The Patient Protection and Affordable Care Act (ACA) (2) requires most lawful residents of the United States to obtain a certain level of health insurance coverage (the minimum coverage provision) or pay a certain amount of money each year (the shared responsibility payment). (3) Opponents of these provisions argue, among other things, that they are beyond the scope of Congress's power to regulate interstate commerce because they regulate inactivity (declining to purchase health insurance), as opposed to regulating economic activity. One of us has argued elsewhere that the constitutionality of the minimum coverage provision does not turn on whether Congress is regulating "inactivity"--that the distinction between inactivity and activity does not even partially define the limits of the Commerce Clause. (4) Rather, as identified by the theory of collective action federalism, a better constitutional distinction is between problems whose solution requires individual action by states and problems whose solution requires collective action by states. (5) This is a structurally sound way to impose some limits on the commerce power while justifying the outcomes in the cases cited by Judge Silberman in the quotation that begins this Article. (6)

One way a collective action problem arises is when people benefit from collective action regardless of whether they contribute to it. In the language of social science, "inactive" individuals who fail to participate in collective action free ride on the contributions of others to collective action. When the effects of such free riding spill over state borders, a collective action problem involving individuals causes a collective action problem involving states. (7)

Applying this framework, the ACA's minimum coverage provision is within the scope of the Commerce Clause, either alone or in combination with the Necessary and Proper Clause. (8) This is because the subject matter it targets is economic in nature, (9) and because it addresses two problems of collective action for the states. (10) The first problem is cost-shifting in excess of forty billion dollars per year from the uninsured to other participants in the healthcare market. The effects of this cost-shifting spill over state borders. (11) The second problem is guaranteeing access to health insurance while avoiding adverse selection, which occurs when healthy people delay the purchase of health insurance until they become ill, thereby undermining the functioning of health insurance markets. Guaranteeing access to insurance regardless of place of residence in the United States facilitates labor mobility and discourages the flight of insurance companies from states that guarantee access to states that do not. Guaranteeing access also dis-incentivizes states from free riding on the more generous healthcare systems of sister states. In a regime of guaranteed access, adverse selection severely undermines the functioning of health insurance markets. (12)

In this Article, we show that these cost-shifting and adverse selection problems link the federalism dimension of the debate over the ACA to the doctrinally separate and suppressed individual rights dimension. As the scope of these free-rider problems justifies federal power to require individuals to obtain health insurance coverage, so the very existence of the free-rider problems illuminates the difficulty of arguing directly--as opposed to indirectly through the Commerce Clause--that the minimum coverage provision infringes individual liberty. The interdependence between some people's decisions to forgo insurance and the well-being of other people means that refusing insurance is far from being a purely self-regarding action. For reasons rooted in this interdependence, serious obstacles confront anyone who aims to establish that the liberty claims of free riders should be constitutionally or morally decisive.

We identify these obstacles to recognition of the claimed liberty interest with help from law, economics, and philosophy. First, we show that an economic substantive due process objection to the minimum coverage provision is doctrinally unavailable. Indeed, its unavailability explains why opponents of the provision take the less straightforward doctrinal approach of recasting the Commerce Clause in libertarian terms. Second, we invoke the long-standing tradition of argument in economics that market failures justify government regulation.

Finally, we draw from the "harm principle" of John Stuart Mill's On Liberty. (13) Mill's deep commitment to libertarianism, which reflects the same anti-authoritarian spirit that moves many libertarians today, does not condemn the minimum coverage provision. This is because Mill's criterion categorically forbids only paternalism in law-making, and the provision is justified on non-paternalistic grounds. When the regulation under consideration is not paternalistic, Mill's libertarianism points explicitly to law and social morality to resolve boundary questions about what members of a society owe one another. In our judgment, these considerations--from federal and state safety net programs to charitable hospital practices--weigh in favor of the permissibility of the minimum coverage provision.

Part II demonstrates that objections to the minimum coverage provision sound overwhelmingly in individual liberty, not constitutional federalism. Part III considers libertarian objections to the minimum coverage provision from the standpoint of legal doctrine. Parts IV and V consider those objections from the standpoint of political morality. The Conclusion summarizes the argument.


As is well-recognized now, (14) the language that activists, politicians, and some judges characteristically employ to express their opposition to the minimum coverage provision suggests that the primary constitutional concern animating such opposition is not limitless federal power. The charge, rather, is that the provision violates individual rights--namely, economic liberty. Even more specifically, the claim is that the minimum coverage provision violates an individual right to refuse to purchase insurance. Any right that could substantiate such a claim would sound in Lochner-style freedom of contract rooted in substantive due process, more precisely the Lochner Court's commitment to freedom from any involuntary contract. (15)

Many examples illustrate this point. Dick Armey and Matt Kibbe of "Freedomworks" wrote in their aptly entitled book, Give Us Liberty: A Tea Party Manifesto, that the Tea Party movement was bent on safeguarding "individual freedoms and economic liberty" because "it is all about the rights of the individual over the collective." (16) The "Contract from America" unveiled by Tea Party activists calls for efforts to "[d]efund, repeal and replace the recently passed government-run health care" as part of a more general appeal for advocacy "on behalf of individual liberty, limited government, and economic freedom." (17) The concerns expressed in the Contract regarding limited government concern government at every level--"our government"--not just the federal government. (18)

Virginia enacted its opposition to the ACA with a statute entitled the "Virginia Health Care Freedom Act." (19) The Commonwealth's Attorney General, Ken Cuccinelli, asserted that his objection (and legal challenge) to the ACA is "not about health care" but "about protecting our liberty." (20) Similarly, Attorney General Bill McCollum of Florida, who took credit for filing the first lawsuit challenging the minimum coverage provision while running for governor, characterized the states' lawsuit as defending the "liberty of our citizens." (21) Moreover, forty-nine Republican members of the United States House of Representatives signed an amicus brief declaring that "[u]pholding the individual mandate would ... place Americans' economic liberty at risk." (22) Tellingly, Mitt Romney is having a very difficult time persuading political conservatives that his support for healthcare reform in Massachusetts is reconcilable with his opposition to the ACA. (23) Romney's opposition to the ACA on grounds of constitutional federalism, not individual liberty, is going nowhere in Republican politics even as Republican politicians and conservative political forces litigate their opposition to the ACA in Romney's terms. (24)

Turning to the judiciary, one federal district court that invalidated the minimum coverage provision ostensibly on federalism grounds nonetheless asserted towards the end of its opinion that "[a]t its core, this dispute is not simply about regulating the business of insurance--or crafting a scheme of universal health insurance coverage--it's about an individual's right to choose to participate." (25) Another federal district court that invalidated the minimum coverage provision appeared explicitly and provocatively to adopt Tea Party rhetoric. "It is difficult to imagine," he wrote, "that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place." (26) In the contemporary American constitutional order, appeals to freedom, liberty, rights, choice, and non-coercion share a logic. It is the logic of individual rights, not the logic of limits on federal power. (27) On that logic, the foregoing liberty-based objections to the ACA ought to apply with equal force to the Massachusetts statute that mandates individual possession of health insurance. (28)

Instead of arguing straightforwardly that all "individual mandates" to obtain health insurance coverage violate substantive due process, opponents of the ACA appear to be enlisting the emotional force of the liberty argument without actually making it. On the one hand, they derive rhetorical power from the "just leave me alone" liberty-inflected criticism of the minimum coverage provision. This criticism has a certain common-sense appeal, particularly if one considers the matter only from the perspective of the individual (as opposed to society), and if one ignores the link between the provision and some very popular provisions of the ACA. (29) These provisions prohibit insurance companies from denying coverage based on preexisting conditions, canceling insurance absent fraud, charging higher premiums based on medical history, and imposing lifetime limits on benefits. (30) On the other hand, opponents of the ACA do not in fact claim that substanive due process protects a Lochner-style freedom from contract. Relying instead on the Commerce Clause, they need not explicitly defend their appeal to individual liberty as a matter of constitutional law.


The constitutional liberty argument is doctrinally hopeless. Because the Supreme Court long ago abandoned freedom from contract as an independent limit on government power, (31) Lochner-style substantive due process challenges to the minimum coverage provision have not survived motions to dismiss. (32) No doubt some who attack the provision on libertarian grounds believe that the Lochner Court was right to defy the popular will for as long as it did, (33) and wrong eventually to abandon economic substantive due process under great duress. (34) But few constitutional critics of the minimum coverage provision publicly attack the constitutionality of the Massachusetts mandate.

Moreover, even if the Court had not abandoned economic substantive due process, an individual rights challenge to the minimum coverage provision might still fail. Lochner-era jurisprudence itself recognized that the states' police power limits the realm of individual liberty in significant respects. (35) For example, Charles Fried has directed attention to the Court's unanimous and still governing decision in Jacobson v. Commonwealth of Massachusetts, (36) which upheld a mandatory vaccination law. (37) Decided the same year as Lochner v. New York, (38) Jacobson is highly relevant to the question whether the minimum coverage provision violates constitutional liberty. …

Log in to your account to read this article – and millions more.