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Obamacare's foes win another round in court

A federal judge in Richmond, Va. ruled Monday that the Patient Protection and Affordable Care Act (known derisively as Obamacare) violated the Constitution by requiring all American adults to obtain health insurance. U.S. District Judge Henry E. Hudson had tipped his hand on this point in his previous ruling to let the case move forward when he asserted that the mandate was unprecedented. In Monday's ruling he articulated a clear limit on Congress' vast power over interstate commerce: It only extends to what people do, not what they choose not to do.

The case was brought by Virginia's Republican attorney general, Ken Cuccinelli, who sought an injunction blocking the law from going into effect. Hudson didn't grant the injunction, nor did he rule the entire law unconstitutional based on the problems he found with the mandate. Nevertheless, he laid out an argument against the mandate that the Supreme Court may find appealing when it considers the healthcare law, as it inevitably will.

Here's the money graf, minus the citations:

The power of Congress to regulate a class of activities that in the aggregate has a substantial and direct effect on interstate commerce is well settled. This even extends to noneconomic activity closely connected to the intended market. But these regulatory powers are triggered by some type of self-initiated action. Neither the Supreme Court nor any federal circuit court of appeals has extended the Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of the Minimum Essential Coverage Provision exceeds the Commerce Clause powers vested in Congress under Article I.

That's a handy way to narrow the reach of the Commerce Clause, whose expansiveness has troubled conservative legal scholars. It also contrasts sharply with the decision two months ago by U.S. District Judge George Caram Steeh in Michigan that upheld the constitutionality of the mandate.

One of the main differences in the two judges' analyses is the way they defined the market people were participating in. Steeh saw Congress regulating the market for healthcare, where everyone is a participant. Under that framework, the individual mandate simply affects the way people pay for the medical services they consume. Hudson, however, saw Congress regulating the market for health insurance, with the mandate forcing people to participate in it whether they wanted to or not.

Hudson also characterized the mandate as an attempt by Congress to bring down the cost of insurance by requiring more people to buy policies. That's not the central rationale for the requirement that people obtain insurance, however. To the bill's sponsors, the requirement is an essential part of the reforms that require insurers to cover everyone who applies for a policy, with no penalties for pre-existing conditions. Without a mandate, healthy people would game the system by obtaining insurance only when they needed expensive treatment -- a phenomenon known as "adverse risk selection."

I'm no lawyer, but I thought that the most persuasive argument for the mandate was its role in protecting the system against that kind of gamesmanship. That seems to dovetail well with previous Commerce Clause rulings, such as the one in Gonzalez vs. Raich. Hudson ignored that argument; Steeh did not.

One other point in dispute is whether the mandate and the tax penalty used to enforce it were constitutional under Congress' broad powers to impose taxes. Hudson rejected the administration's argument on that point too, saying it wasn't a tax.

Several other courts are still considering challenges to the Affordable Care Act, including a case brought by attorneys general from about 20 other states. The administration will undoubtedly appeal, and the debate will go on.

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Obamacare

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-- Jon Healey

 

Comments () | Archives (3)

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Pasquino Marforio

No word yet from Vice-President Biden on whether or not this is a big effin deal.’

Pasquino Marforio

Arguments and Outcomes

There were two basic arguments in this case.

First, Virginia argued that the individual mandate was beyond the power of Congress and the President to impose under the Constitution. Specifically, Congress claimed that their regulatory power under the Commerce Clause allowed them to order you to buy their government-approved health insurance, even if you decide not to buy health insurance.

The judge ruled that the federal government does not have the power to compel you to buy health insurance as part of its attempt to regulate the entire field of health care and health insurance. Thus, Virginia won this argument.

Second, the federal government advanced a 'fallback' argument in case it lost on its commerce clause argument. The feds' fallback. argument was that the financial penalty you have to pay if you don't buy the government mandated health insurance is a tax.

This may sound like an odd argument from a political standpoint - usually they say everything is NOT a tax (in fact, they argued the penalty was not a tax while they were trying to get the bill passed); however, they changed position after the bill became law to try and save the bill. What they were trying to do was to get the courts to agree that because the penalty would presumably raise some revenue, it was therefore a 'tax' under the taxing and spending for the General Welfare Clause of the Constitution.

No judge in the country has bought this argument, and Judge Hudson was no exception. He ruled that the taxing power of Congress does not save the bill, because the penalty for not buying the mandated health insurance is not a tax.
The federal government only had to win on either of these two arguments, while Virginia needed to win both to prevail, and we won both!


What's Next?


Certainly the federal government will appeal their loss in the district court to the 4th circuit court of appeals within the next 30 days. And whichever side loses in the 4th circuit will certainly appeal to the Supreme Court. And no one has any serious doubts that ultimately the constitutionality of the individual mandate will be decided by the U.S. Supreme Court.


That could take approximately (very rough approximation) two years. Ken Cuccinelli, the Attorney General of VA, is discussing with the Department of Justice accelerating the case, and those discussions have been very cordial thus far.

Mitchell Young

"That's a handy way to narrow the reach of the Commerce Clause"

Yeah, if this stands we will have the right to, quite literally, do nothing -- and only that right. That's not so much 'narrowing' the 80 years of abuse of the Commerce Clause as carving out a small sphere of personal autonomy.


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