On the Lawfulness of the Individual Mandate

I've never particularly entertained the notion that the individual mandate in the health care law is unconstitutional. It consists of a fine on persons who do not obtain some variety of health insurance, and opponents of the mandate argue that it constitutes a requirement that individuals enter into interstate commerce, which cannot be considered an example of regulating interstate commerce. My traditional response to this argument is that an individual mandate, "Persons not buying health care are assessed a tax of magnitude X," is structurally identical to "Persons buying health care are granted a tax rebate of magnitude X, and all persons have their taxes raised by amount X." Literally identical. Would that latter be unconstitutional? Well, the Congress can levy income taxes, and last time I checked, it can grant tax rebates for participating in interstate commerce, e.g. cash for clunkers, and I'm sure there are others. So it strikes me that this kind of conditional tax is not beyond the pale of what the Congress has had the ability to do in the past, since it is literally identical to a differently-worded policy that would clearly be constitutional.

But stipulate, for a moment, that this logic doesn't work. Suppose the simple fact that you can turn the equation on its head and make it sound acceptable is not enough to justify it. The claim is that the power to "regulate commerce...among the several states" does not include the power to compel individual to enter into that commerce. Assume that this is a true proposition, and also that the power to tax and spend to promote the general welfare does not allow the Congress to lay a tax that will promote the general welfare. I think it is still a rather easy matter to show that the individual mandate is valid; here's how.
The Congress has the power to regulate commerce among the several states. Is it to be doubted that this does not include the power to say, "Health insurance companies may not deny coverage to an individual on the grounds of a pre-existing condition"? I hold that it is not to be doubted. You would have to claim that health insurance is not a form of interstate commerce, which is a pretty absurd proposition. But now, you see, I've won the argument, because Article 1, Section 8, Clause 18 states that Congress has the power:

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

How are we to interpret this Necessary and Proper Clause, upon which, as it happens, 95% of current federal activity rests? Well, as best I can tell, the definitive explanation of the workings and meaning of the Necessary and Proper Clause comes from a very old case, one of the old cases that truly deserves the word hallowed though it was controversial at the time: McCulloch v. Maryland. In that case, in the course of examining whether the Second Bank of the United States was constitutional despite the power to incorporate being nowhere listed among Congress' enumerated powers, Chief Justice John Marshall (the most underrated important figure in American history) stated the following principle:

Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consistent with the letter and spirit of the Constitution, are constitutional.

So now we have the following question. Is the banning of discrimination in health insurance on the basis of pre-existing conditions a legitimate end within the scope of the Constitution? Plainly yes. But you could line 100 economists up in a row and they would all tell you that, if you ban pre-existing condition discrimination and do nothing else, the health insurance system will collapse under a death spiral of adverse selection. There is only one solution to this, the individual mandate. So is the individual mandate a means which is appropriate and plainly adapted to the end of banning pre-existing condition discrimination? Yes, emphatically yes. One needn't even really read the Necessary and Proper Clause as broadly as Justice Marshall does there, and as everyone has done since, because in this case it really is necessary. If you are going to create a system of universal care, including those with pre-existing conditions, based on private insurers rather than done directly by the federal government, you must create an individual mandate. It cannot work otherwise.

All that remains is to show that such an individual mandate is "not prohibited, but consistent with the letter and spirit of the Constitution." So, while the Constitution does not give the explicit power to lay such a tax, not does it expressly prohibit it, does it? I defy anyone to find that part of the Constitution that forbids this tax in so many words. Is the individual mandate's penalty any less "consistent with the letter and spirit of the Constitution" than a Bank of the United States? Nowhere does the Constitution say that a Bank may be incorporated, but no one would find that such an incorporation is directly prohibited. Similarly, under our assumptions, with an individual mandate: it is not granted as an explicit enumerated power, but since it is also not prohibited, and since it does as good a job of being necessary and proper for carrying into execution one of the forgoing powers, it must implicitly reside within the Necessary and Proper Clause. Therefore, even if neither Clause 1 nor Clause 3 of Article 1, Section 8 grants Congress the power to create an individual mandate, the Necessary and Proper Clause does. Q.E.D.