Under the interstate commerce clause of Article I, activities whose effects are confined within a given state are to be regulated by that state government, or simply left unregulated. But the federal government is specifically empowered to address matters that have significant spillover effects across state lines or international borders.
Federal regulation makes obvious sense if the interstate or international issue involves trade or navigation. But the founders authorized Congress to act even in situations that did not involve explicit markets, so long as the activities truly crossed state lines or national borders. Today, that power properly extends to regulating such things as air pollution that wafts across state lines or endangered species that migrate across borders. In line with this broad understanding, George Washington signed a law preventing Americans from committing even non-economic crimes on Indian lands because such activities did indeed involve “commerce . . . with the Indian tribes.”
The healthcare bill clearly addresses activities that cross state lines. These activities are often economic in nature. Currently, workers with preexisting medical conditions may be unable to accept job offers originating in another state — a reality that clogs the free interstate flow of goods and services. Other Americans relocate to states with better public health benefits, creating interstate races to the bottom as states worry about becoming “welfare magnets.” Some grandparents now refrain from visiting their out-of-state grandchildren because of anxieties about out-of-network healthcare delivery systems. Obamacare addresses all of these matters of interstate commerce.