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A legal victory for Obamacare

Obama healthcareIn the first ruling on the merits of a constitutional challenge to the new healthcare reform law, a federal judge in Michigan has ruled  that Congress has the power to order Americans to buy health insurance.

The case -- Thomas More Law Center et al vs. Barack Hussein Obama et al -- was brought by a Christian public interest law firm  and four uninsured Michigan residents, who contended that the tax penalties that the law would force them to pay could be used to fund abortions. They argued that the healthcare law exceeded Congress' powers under the commerce clause and constituted an illegal tax, as well as violating the 10th Amendment, the due process and equal protection clauses of the 5th Amendment, and the free exercise of religion clause of the 1st Amendment.

U.S. District Judge George Caram Steeh's ruling addressed only the commerce clause and tax claims, which also are at the heart of the two lawsuits brought by state attorneys general.  According to Steeh:

The crux of plaintiffs’ argument is that the federal government has never attempted to regulate inactivity, or a person’s mere existence within our Nation’s boundaries, under the auspices of the Commerce Clause. It is plaintiffs’ position that if the Act is found constitutional, the Commerce Clause would provide Congress with the authority to regulate every aspect of our lives, including our choice to refrain from acting.

Although the Supreme Court has ruled that Congress may regulate local economic activities  if they "substantially affect interstate commerce," Steeh concedes that the justices haven't addressed the question of whether Congress can regulate inactivity. Nevertheless, he held that there was a "rational basis" to conclude that people who choose to go without insurance drive up insurance premiums and the healthcare costs covered by taxpayers:

Far from “inactivity,” by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants....

[P]laintiffs in this case are participants in the health care services market. They are not outside the market. While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate.

He also found that the mandate was an essential part of Congress' broader effort to curb cherry-picking and other abusive practices by insurers. The centerpiece of that effort is the bill's requirement that insurers offer coverage to everyone, regardless of preexisting conditions. Without a mandate, Steeh wrote, individuals could wait until they became sick before taking advantage of the coverage guarantee. This form of adverse risk selection would be ruinous to the system:

As a result, the most costly individuals would be in the insurance system and the least costly would be outside it. In turn, this would aggravate current problems with cost-shifting and lead to even higher premiums. The prospect of driving the insurance market into extinction led Congress to find that the minimum coverage provision was essential to the larger regulatory scheme of the Act.

The plaintiffs contended that the tax penalty in the law violated the constitutional requirement that direct taxes be apportioned by population. Steeh flatly rejected this argument, saying the commerce clause gives Congress the power to impose penalties on behavior it deemed harmful to commerce.

The ruling doesn't bind the courts in other districts considering the attorney generals' lawsuits. Clearly, there will be much more ink spilled on the legal questions raised by the new healthcare law. Still, this round clearly goes to the administration.

-- Jon Healey

Photo: President Obama talks about the healthcare reform law at an event in Virginia. Credit: AP Photo / Pablo Martinez Monsivais

 

Comments () | Archives (27)

The comments to this entry are closed.

d

idiots...smacked down.

CarolASThompson

http://www.mied.uscourts.gov/News/Docs/09714485866.pdf

The judge is lying for pretending that it's merely necessary to claim that something has economic ramifications in order to be justified under the Commerce Clause. He lied by omission in the Filburn case, by leaving out the key fact that Filburn was in fact a farmer engaged in interstate commerce, who had chosen to participate in the commodity program, and the wheat in question was in addition to his allotment. His invoking of the Raich decision is ludicrous, like pretending that the government has the right to regulate people for NOT wanting to grow or buy marijuana!!!

http://www.heritage.org/Research/Reports/2009/12/Why-the-Personal-Mandate-to-Buy-Health-Insurance-Is-Unprecedented-and-
Unconstitutional

His claim that the uninsured are a burden to the insured which would magically disappear if they're forced to buy health insurance is a filthy Big Lie! The cost of insurance is even higher than the health costs they can't pay for!

"People uninsured for any part of 2008 spend about $30 billion out of pocket and receive approximately $56 billion in uncompensated care while uninsured. Government programs finance about 75 percent of uncompensated care. If all uninsured people were fully covered, their medical spending would increase by $122.6 billion. The increase represents 5 percent of current national health spending and 0.8 percent of gross domestic product." (Covering The Uninsured In 2008: Current Costs, Sources Of Payment, And Incremental Costs of Expanding Coverage. J Hadley, J Holahan, T Coughlin, D Miller. Health Affairs 2008;27(5):w399-w415.) Page 56, "Even if all private funding for uncompensated care were recouped from private insurance payments, this would still amount to only 1.7% of private insurance premiums." (Covering the Uninsured in 2008: A Detailed Examination of Current Costs and Sources of Payment, and Incremental Costs of Expanding Coverage. J Hadley, J Holahan, T Coughlin, D Miller. Kaiser Commission on Medicaid and the Uninsured, Aug. 2008.) Also in this report, it says that full-year uninsured people on average received $1,686 in health care, compared with $3,915 for insured people, and paid for a larger proportion of it out of their own pockets, page 15. The Obama plan is to force them to buy health insurance, with an average subsidy of $6,000, for those average expenses of less than $2,000! (Reid Letter, Mar. 18, 2010.) WHAT A BARGAIN - FOR THE INSURANCE COMPANIES!

http://www.kff.org/uninsured/upload/7809.pdf

Meanwhile, those with health insurance have inflicted a burden of $246 billion in lost federal tax revenues due to the exclusion of employer-provided health insurance from taxable income. This exclusion is the nation's COSTLIEST tax subsidy, and the expense of making up for these lost revenues is distributed across everyone, including the uninsured (Van de Water, 2009).

http://www.cbpp.org/cms/index.cfm?fa=view&id=2832

And, most importantly, the Supreme Court has invalidated congressional action on the ground that it employed unconstitutional means to an end that it could have constitutionally accomplished in another manner. Congress could have funded health care for those who can't pay simply by expanding existing programs. But they refused to do so, because the REAL goal of forcing people to buy health insurance is to force everyone to submit the "wellness and prevention" charlatanism, which every "approved" plan is required to include. Their ideology of "wellness" is based on deliberate, systematic scientific fraud and deceit, with no scientific criticism allowed, and is really nothing but shoving an official establishment of religion down our collective throats! So it's actually an unconstitutional means to an unconstitutional end as well!

Newport

This is good news. Obamacare is going to happen, maybe slowly, but it will happen. In time it will be looked upon as a positive move toward lowering medical costs while giving care to those who--like myself--cannot afford it.

Truth

Newport - here's an idea, get a job and get your own insurance. What makes people like you think other people should pay YOUR expenses?

Jon Healey

@Truth -- Even if you have insurance, you won't cover all your medical costs should you be badly injured, develop cancer or come down with some other expensive malady. Insurance is about spreading costs *onto other, healthier people.* If you're capable of affording to pay for every bit of care you require, more power to you. Don't get insurance.

One other point -- an analysis of bankruptcy filings in 2007 by Harvard researchers shows that medical costs are a factor in most bankruptcies, and that most of these folks *had insurance.* See http://www.businessweek.com/bwdaily/dnflash/content/jun2009/db2009064_666715.htm.

live free

As a continuation then it can be required of all citizens 16 years and older to be required to purchase auto insurance whether he/she has a license or not in the interest of lowering insurance costs to all.

MartyK

Next I'll be required to buy milk, or bread, or a hat, or anything else where universal participation will have some perceived benefit on that industry. There are so many other things that could be done to improve medicine in this country. I never thought I would see a totalitarian/capitalist system. I thought that would be reserved for communist states. You shouldn't need the government to force people to buy anything.

jb1111

A democratic judge makes a partisan ruling.

Robert

"Obamacare" is a lobbying term coined by opponents of healthcare reform. It has no place here, except when quoting a flack for the insurance companies..

Paul VanDevelder

This case and the racorous opposition to health care clearly demonstrate that a sizable portion of our citizenry simply don't understand the documents that founded this nation. Some very strange and bizzare notions of what constitutes individual freedom are floating about and becoming more toxic by the day. This should come as no surprise. After all, in a recent study of 3000 college graduates and elected politicians, 71% flunked a 'civics literacy test' - with an average score of less than 50%. Irony upon irony, this is the same test given all new immigrants applying for citizenship. This and many other cases demonstrate that we have become a (listing) ship of fools.

Leonel A Umana

Conservative and Republicans try very hard to deny government aid for the public and indivial good. They do so because it will prove that their views of "limited government" and that "government is the problem" is just a political lie and sham argument create so they could deny actions they do not like or care about. Government were invented for a reason. It has a necessary role of disallowing abuse of power and leveling the playing if and when necessary. This interfers with Republicand perceive right to impose their will on others and their perceive right to profit on others misery. This sound like harsh judgment and portrays them as nothing more than legalized organize crime. That is because that what they are becoming.

treboR

Obamacare, Obamacare, Obamacare, Obamacare, Obamacare. It's his baby.

ande1416

Yet another reason Michigan is a joke of a state, the judges can't get their heads out of the politician's ares.

Pasquino Marforio

Then this Democrat appointed judge believes that this Democrat Socialist Congress has the power to regulate — and tax — a citizen's decision not to participate in interstate commerce.

So therefore, when the Democrat Socialist congress decides, when their pet unions are in trouble, that I should buy a car from Goverment Motors, and taxes me when I don't, then it's perfectly constitutional.

When the Democrat Socialists direct armed IRS agents to come and sieze my property, to auction if off to pay the tax, for not buying a Government Motors Car, to protect their pet unions, then it's perfectly constitutional.

No. Somebody better correct this really bad decision. And fast. This Democrat Socialist Tyranny has overreached the constitution.

Mike

In respect to Employer mandates, it appears from www.BenefitsManager.net and www.AHealthInsuranceQuote.com analysis that employers nationwide will be assessed a $2,000 penalty for every employee not offered group health insurance or commonly referred to employer sponsored health insurance. Does this include part time employees that traditionally didn’t qualify or buy health insurance in the first place because of the cost vrs. Hours worked? How in the world is an employer going to absorb this cost? So if an employee doesn’t want to participate in paying their share, the employer is penalized $2,000?

Anti-sweeping-generalizations

Truth,
Here's an idea:
Don't assume everyone who needs insurance coverage is lazy and looking for a hand out. You know what they say about assumptions.. it's well, the *truth*. There are many more aspects and variables being addressed by Obamacare (which is not perfect) than that, anyway, so it's a very stupid point. Oh, and in case you didn't realize, anyone denied health insurance OR who for whatever reason can't afford it CAN still go to the ER, have hundreds of thousands spent on them out of EVERYONE'S pocket as it is. Hmm.. that sounds fair, doesn't it? But of course, money is more important than lives or whether we end up with a French revolution on our hands when people are tired of yes, working 2-3 jobs, still not being able to access that which the rich can have, all because the rich have convinced people like you to maintain your idealogy by painting other hard working folks as bad guys. (I'm no more supportive than you for people to get something for nothing- the difference is I realize that even generally speaking, this isn't what is happening, especially where health insurance is concerned.)

Pasquino Marforio

Steeh was a federal judge on the United States District Court for the Eastern District of Michigan. Steeh was nominated by President Bill Clinton on September 24, 1997, to a seat vacated by Barbara K. Hackett. He was confirmed by the United States Senate on May 13, 1998, and received his commission on May 22, 1998.

This Democrat appointed judge believes that this Democrat Socialist Congress has the power to regulate — and tax — a citizen's decision not to participate in interstate commerce.

So therefore, when the Democrat Socialist congress decides, when their pet unions are in trouble, that I should buy a car from Goverment Motors, and taxes me when I don't, then it's perfectly constitutional under this new 'precedence'.

When the Democrat Socialists direct armed IRS agents to come and sieze my property, to auction it off to pay the tax, for not buying a Government Motors Car, to protect their pet unions, then it's perfectly constitutional under this new 'precedence'.

This is, at best, a simple election cycle stunt that will be overturned quickly on appeal.

If not, it will mean a far sharper response then what these Democrat Socialists will expect.

Which is why they need this new National Security Advisor that only has domestic experience.

Max Plank

Can the government require that I buy a Chevy?

avatar666

CarolASThompson....

That was a great comment. Well reasearched and accurate. Better yet. Very well written. Wish I had your skills. Please continue commenting on these liberal rags. Who know's someone might actually think about what you've written and change their mind about voting for the block heads we have in office.

:-)

Joseph

It means nothing. Even less than nothing because it came from Michigan. In Heller vs DC the district court dismissed the gun lawsuit against DC. It was overturned. Chicago met the same fate. The 9th Circuit’s rulings accounted for more reversals this past term than all the state courts across the country combined and represented nearly half of the overturned judgments (45%) of the federal appellate courts. When a liberal judge who thinks the constitution is a living document makes a claim, it's usually overturned.

Joseph

"Nevertheless, he held that there was a "rational basis" to conclude that people who choose to go without insurance drive up insurance premiums and the healthcare costs covered by taxpayers" Gee, lets rephrase that for a second to "Nevertheless, he held that there was a "rational basis" to conclude that people who choose to go without paying taxes drive up tax costs covered by other taxpayers" Now let's look at this: "He also found that the mandate was an essential part of Congress' broader effort to curb cherry-picking and other abusive practices by insurers." change it to this: "He also found that the taxing everyone was an essential part of Congress' broader effort to curb cherry-picking voters other abusive practices by the Government. "


So, the government wants everyone to buy health insurance so others don't have to subsidize them, yet they let 50% of the country off the hook for paying taxes.

Jere Krischel

So let's have a penalty for not buying GM cars. And another penalty for not buying volcano insurance. And another penalty for not going to college. And another penalty for not buying a Segway. And another penalty for not buying a rifle. And another penalty for not going to church. And another penalty for not watching "Glee."

For all the ObamaCare boosters trolling around, they sure seem to miss the point that this precedent essentially gives the government carte blanche to regulate everything you choose and *don't choose* to do. Liberty be dammed, government knows best?

Jon Healey

@Joseph -- The "50% pay no taxes" meme has been debunked so often, I'm amazed anyone still utters that line. You'd be hard pressed to find anyone in this country who doesn't pay sales taxes or property taxes (directly or indirectly). Don't forget excise taxes on gasoline and payroll taxes withheld by employers. The most recent numbers I could find from the Tax Foundation -- http://www.taxfoundation.org/publications/show/25962.html -- showed that about 36% of federal filers reported zero *income tax* liability. But again, that's just federal income taxes.

How odd it is that folks on the right complain so often about being overtaxed, and yet they also complain that not enough people pay.

Adder

When the Cons gain control of Congress in time, we can use this law to force the liberals to pay for wars, military gear, and such things. It will bypass the entire voting system. This is a victory for militants everywhere once the judges break the Constitution.

Ann Mere

This is NOT good news. This is just the beginning of the trek to the Supreme Court. The federal government does NOT have the right to demand that all citizens buy health insurance. I'm waiting til all the facts & legal processes are in.

Silverlake Mike

Boo hoo, I can't be uninsured, go to the emergency room and make someone else pay for my treatment any more! It's not fair!

Linguist

"Obamacare" is, more accurately, "GOPCare."

After all, the mandate was originally strictly a conservative, REPUBLICAN idea, proposed by Republicans, supported by Republicans. It was loved by big insurance companies. It's pro-business. By legacy and by philosophy, it is a Republican plan.

Democrats adopted it assuming Republicans would continue to support it.

Wrong.

This isn't about whether it is constitutional or not.

It's about thwarting a Democratic president. Anything it takes.

Sorry. It's lame.

And it's time to call the GOP on its deceptive approach to opposing anything that might garner support for the opposition it so hates for having legitimately clobbered them in an election.

It may work.

But some of us have long memories.


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