It's a load of crap, but proponents argue that Congress derives the authority to mandate that people purchase health insurance from its constitutional power to regulate interstate commerce. Medical school, medicines, medical equipment, everything involved in health care is derived from interstate commerce in one way or another.
In the words of the greatly esteemed and revered Nancy Pelosi:
"Congress has broad power to regulate activities that have an effect on interstate commerce. Congress has used this authority to regulate many aspects of American life, from labor relations to education to health care to agricultural production.”
“On the shared responsibility requirement in the House health insurance reform bill, which operates like auto insurance in most states, individuals must either purchase coverage (and non-exempt employers must purchase coverage for their workers)—or pay a modest penalty for not doing so. The bill uses the tax code to provide a strong incentive for Americans to have insurance coverage and not pass their emergency health costs onto other Americans—but it allows them a way to pay their way out of that obligation. There is no constitutional problem with these provisions.”
The auto insurance correlation is likewise a load of crap. Yes, if you drive an automobile you have to have insurance, or pay a fine of you fail to obtain insurance. But that's a condition of driving an automobile, not one of simply living here and being a citizen. Those who do not own or drive a motor vehicle are not subject to these costs and fines, but everyone who want to live and breath, as a condition of doing so, will have to buy insurance, or be subject to fines.
In the words of the Congressional Budget Office (in response to Clinton's 1994 attempt at mandating that people buy insurance):
“The government has never required people to buy any good or service as a condition of lawful residence in the United States. An individual mandate would have two features that, in combination, would make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government.”
It's a nasty business, and sneaking it in via the interstate commerce clause is a pretty childish way to go about it. A better move would be to have this pounded out and ratified just like any other Constitutional Amendment, since universal health care reform will affect each and every one of us on a fundamental level, the same as a Constitutional Amendment would. A ratified Amendment would ensure that a vast majority of the people were behind it, unlike the crap that's being shoved down the vast majority currently.