Court Strikes Down Individual Mandate in Health Reform Law

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On Friday, a three-judge panel for the 11th Circuit Court of Appeals in Atlanta ruled that the individual mandate in the federal health reform law is unconstitutional, the first time an appellate court has ruled against any part of the law, Washington Post reports (Aizenman/Barnes, Washington Post, 8/12).

Background

The suit involves 26 states, the National Federation of Independent Business and two individuals, who have argued that the individual coverage mandate exceeds Congress' power to regulate interstate commerce.

In addition, the plaintiffs argue that a provision of the law requiring states to expand Medicaid coverage to adults with incomes up to 133% of the federal poverty level is unconstitutional and "coercive."

The appeals court took up the case after U.S. District Court Judge Roger Vinson issued a ruling in which he agreed with the plaintiffs and concluded that the mandate is "inextricably bound" to other provisions in the law, invalidating the entire law.

Lawyers for the Department of Justice have argued that residents who do not buy health insurance pass on billions of dollars in costs to taxpayers. They also have suggested that the decision to not purchase insurance is an action worthy of taxation, legitimizing the individual mandate (California Healthline, 6/9).

Latest Ruling

Although the appellate judges struck down the individual mandate in a 2-1 ruling, they left the Medicaid expansion intact.

Chief Judge Joel Dubina and Judge Frank Hull ruled against the mandate. They wrote that Congress "exceeded its commerce power in enacting its individual mandate" and that "its tax power does not provide an alternative constitutional basis for upholding this unprecedented individual mandate" (Norman, CQ HealthBeat, 8/12).

According to Politico, the ruling marks the first time a judge appointed by a Democrat has voted against the mandate. Hull was nominated by President Clinton, and Dubina was appointed by President George H.W. Bush (Haberkorn, Politico, 8/12).

Dissenting Opinion

Judge Stanley Marcus dissented, writing, "In the process of striking down the mandate, the majority has ignored many years of Commerce Clause doctrine developed by the Supreme Court."

He continued, "It has ignored the Supreme Court's expansive reading of the Commerce Clause that has provided the very foundation on which Congress already extensively regulates both health insurance and health care services. And it has ignored the long-accepted instruction that we review the constitutionality of an exercise of commerce power not through the lens of formal, categorical distinctions, but rather through a pragmatic one" (Dionne, "Post Partisan," Washington Post, 8/12).

Marcus was appointed by Clinton (Politico, 8/12).

Case Closer to Supreme Court

The Post reports that the ruling increases the likelihood that the U.S. Supreme Court will make the final decision on the individual mandate. In June, appellate judges for the Sixth U.S Circuit Court of Appeals in Cincinnati upheld a lower court ruling that the federal health reform law's individual mandate is constitutional.

The Supreme Court more readily accepts cases where lower courts are split, making the antireform lawsuits appropriate (Washington Post, 8/12).

The Obama administration has 90 days to appeal the ruling, which it is expected to do. Then, judges in three more antireform cases must weigh in before the Supreme Court will consider the case.

The first is under the purview of the Fourth Circuit Court of Appeals, which many expect to rule by the end of September. Then, a court must consider an appeal by the Thomas More Law Center, which is rebuking the Sixth Circuit decision in Cincinnati. Finally, a case in the D.C. appellate court is scheduled for oral arguments on Sept. 23.

Many analysts expect the Supreme Court to consider the case during its upcoming term, which begins in October. This means it would issue a decision no later than June 2012. However, no one is forecasting with certainty how the high court will rule on the matter (Kliff, "Ezra Klein," Washington Post, 8/12).

Court Tosses Lawsuit Filed by Pacific Justice Institute

In related news, the 9th Circuit Court of Appeals on Friday upheld a lower court ruling and dismissed a lawsuit challenging the federal health reform law, the AP/Sacramento Bee reports (AP/Sacramento Bee, 8/12).

The Pacific Justice Institute and former California Assembly member Steve Baldwin (R-El Cajon) filed the lawsuit. The plaintiffs allege that the reform law is unconstitutional because it requires the purchase of health insurance and because the law's revenue provisions did not originate in the House of Representatives.

In August 2010, District Judge Dana Sabraw dismissed the case, saying the plaintiffs had no legal right to sue because the law's individual mandate had yet to take effect and the plaintiffs had not demonstrated harm resulting from the law. Pacific Justice Institute and Baldwin appealed Sabraw's decision (California Healthline, 6/7).

The appeals court affirmed the district court's decision, ruling that the plaintiffs could not prove that they would be directly affected by the individual mandate (AP/Sacramento Bee, 8/12).

Rudy LehderRivas
I find the whole argument very interesting, one one hand I realize that the Healthcare mandate would most greatly effect Hispanics (as they are least likely to have Health Coverage). On the other hand after speaking to so many of them regarding "what if" they all say they would just pay the fine and not pay for Individual healthcare. So I see this as another way to collect a "tax/ or fine". Not really increasing Healthcare in America at all.
Clark Norwood
"The appeals court affirmed the district court's decision, ruling that the plaintiffs could not prove that they would be directly affected by the individual mandate" So I guess the cop that arrives on the scene to find a bad guy holding a gun on an old lady can't act because there is no proof that the old lady WILL be harmed by the bad guys gun. Sometimes you just need to have the balls to make a decision that you logically know will head off a harmful ending!
Ann Smith
It is interesting to read the comments on this at Robert Reich's Facebook page. Certainly this will be a hot and constant topic when it gets to the supreme court and from many respected analyses I've read thus far, it's not a slam dunk that the mandate will be defeated.

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