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Obamacare's foes win another round in court

December 13, 2010 | 10:50 am

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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-- Jon Healey

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